Tag: smart supply chain

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AI in Supply Chain Management: Top 4 Reasons Procurement Companies Should invest in AI in 2019

Just as artificial intelligence (AI) has made its way into finance and healthcare, it is now creating a fourth industrial revolution in supply chain management. The use of AI in supply chain management has brought about operational improvements for companies across the globe. It has made it possible to discover patterns in supply chain data by relying on algorithms that quickly pinpoint the most important factors behind the success of supply networks. Key factors influencing supplier quality, inventory levels, demand forecasting, order-to-cash, procure-to-pay, transportation management, production planning, and more are becoming known for the first time with the aid of AI in supply chain management. This is making supply chains more efficient and result-oriented. In this article, we have discussed some of the significant benefits of AI in supply chain management for 2019.

Benefits of AI in Supply Chain Management

#1. Helps in analyzing large data sets with maximum accuracy

For supply chain management, one of the most challenging aspects is predicting future demands for production. Before any solution of demand management is implemented, the master data needs to be cleaned up. This process of normalizing and cleaning the data costs more, takes far longer, and requires an ongoing effort. The use of AI in supply chain management can help simplify this process and improve the accuracy of demand forecasting.

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#2. Improves supplier delivery performance

AI in supply chain management helps in improving supplier delivery performance, reducing freight costs, and minimizing supplier risks. These are some of the significant benefits artificial intelligence is providing in collaborative networks of the supply chain. Today, AI in supply chain management can be used to identify horizontal collaboration synergies between multiple networks of shippers.

#3. Provide better insights into improving supply chain management

Artificial intelligence helps uncover new information to improve supply chain performance.  By combining the strengths of supervised learning, unsupervised learning, and reinforcement learrequest proposalning, artificial intelligence is rapidly becoming an effective technology that continually seeks to find important factors affecting the performance of the supply chain.

#4. Helps in maintaining physical assets across the entire network of supply chain

AI in supply chain helps at visual pattern recognition, opening up several potential applications in the maintenance of physical assets and physical inspection across the entire network of the supply chain. The use of AI in supply chain is also proving to be very effective at automating inbound quality inspection throughout logistics hubs, isolating product shipments with wear and damage.


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IR39

What does the Future of Digital Supply Chain Look Like?

Digitalization has been the talk of the town in any business function ranging from marketing, finance, operations to procurement and supply chain. Industry 4.0 has been the most significant driver for digitalization in organizations that augment the management’s capabilities to improve efficiency and productivity. Industry 4.0 incorporates various game-changing technologies ranging from Internet of Things (IoT), cloud-based systems, and data analytics. The advent of such technologies has changed the way how supply chain and logistics department functions. It has also contributed to saving time for operations professionals by automating mundane tasks. The future looks bright for supply chain digitalization with ideas from the automated warehouse and robotics to drone delivery looming around. So how is technology unfolding in the area of digital supply chain and what trends are set to gain traction in theSE_Demo2 coming years?

Network-focused visibility

Traditionally, procurement and supply chain information existed in silos and managers from one department had less transparency of other departments. The digital supply chain will be marked by the ability to understand activities and events of multiple players. Digital supply chains will augment to such a level that transparency will increase not only for internal stakeholders but also for external supply chain partners. One day, the technology will advance to enable global trading network or global commerce hubs.

Advanced analytics

A typical supply chain generates a huge amount of data, and with so much data available, advanced analytics seems to be the perfect candidate for in-depth analysis. The advancement in data storage and processing technologies has enabled companies to crunch mountains of data within minutes and not months. The power of such advanced analytics can be utilized in areas such as making buying decisions, inventory planning, supplier network optimization, and supplier collaboration. It will significantly help companies in improving productivity and reducing the cost.

AI and robotic automation

The world of the supply chain may see personal assistant such as Alexa and Siri on the consumer-facing side. Such an AI personal assistant will be able to give instant information into the company’s supply chain and help managers track the progress of their operations. Additionally, AI and automation systems can enhance workforce productivity by performing repetitive tasks such as supplier on-boarding, assisting with invoice compliance, and processing help-desk orders. Such automated digital supply chain will shorten lead times, eliminate errors, and improves stakeholder experiences.

Cloud TMS

Transportation management system (TMS) is one of the crucial parts of any logistics network. Cloud TMS can provide remote monitoring to logistics professionals and the ability to track progress along the supply chain. Cloud TMS also eliminates the troubles of on-premise deployment and breaks silos to create an interconnected network of 3PL providers, carriers, and matching providers. Cloud TMS has the ability to develop into a central marketplace which offers a connection to all stakeholders in a supply chain.

Mobile robotics

Apart from technologies like IoT and data analytics, which evolves from the software part, technologies like mobile robotics can also significantly improve workforce productivity. It will allow warehouses to reduce labor requirements and help DCs keep pace with the current e-commerce growth. The use of mobile robotics may not be limited to material handling but also in automated guided vehicles (AGVs). Mobile robotics/smart AGVs that can carry or pull materials to workstations, or function as smart, driverless lift trucks which would alleviate the manpower needs at the DC level, and allow for DC automation which is quicker to install and reconfigure.

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Supply Chain, Logistics and Procurement News Roundup of 2017

As the year comes to a close, we take a look back at the news and events that have shaken the world of the supply chain, logistics, and procurement. At a time when the pace of innovation is advancing rapidly, supply chain managers are having a hard time adjusting to new technologies. However, the changes are here for good, with companies being able to realize a multi-fold increase in efficiency and gains with new technologies and strategies. Apart from such technological innovations, various other factors have had a significantSE_Demo2 impact on the supply chain; some brought about by the people themselves such as the appointment of Donald Trump as the president of USA and others out of their control like hurricane Harvey.

Supply Chain, Logistics, and Procurement News Making the Headlines in 2017

Nike cuts Lead Time from 60 Days to 10

When it comes to improving supply chain efficiency, most notable changes that make the news report marginal gains or improvement of few percentage. But what Nike did with its logistics network by cutting down lead time from 60 days to 10 is just phenomenal. The sports goods manufacturer redesigned its logistics network, nearshored from more facilities, invested in automation, and invested in contract manufacturer relationships. Two years back Nike set up a 125,000 sq.ft. Innovation center which found a way to produce footwear uppers using 50% less labor and 30% fewer steps. They also made a strategic change to their sourcing model by adopting consumer on-demand model by digitizing their end-to-end supply chain. It enables the company to deliver exactly what consumers want with shorter lead times to deliver.

Policy Changes Under Trump Administration

The trump administration won the presidential election even after making conflicting claims and promises. However, it also promised increased employment opportunity, affordable healthcare, federal and corporate tax cuts, and decreasing dependency on China. The policy changes would widely affect the organization’s supply chain functions. For instance, in a bid to promote Made in USA, slapping a border adjustment tax (BAT) of 20% inevitably increases the cost of procuring goods from outside USA. Also, procurement and supply chain managers had to rethink their offshoring strategy, when Trump proposed a 20% reduction in the corporate tax rate.

Hurricane Harvey Sweeping Away the Ethylene Production

The Hurricane Harvey was the costliest tropical cyclone on record causing economic damages of about $200 billion and affecting 132 petrochemical sites located along the Houston Ship Channel. The hurricane resulted in chemical spills which released a large number of pollutants into the nearby ecosystem and also caused around half of the chemical facilities to go offline. The hurricane-induced chemical plant explosion caused an ethylene production setback of about 50,000 tons per day. Limitation in the ethylene supply also affected other industries along the supply chain such as plastics and natural gas. For instance, after the fall in ethylene supply, the majority of the polyethylene plastic manufacturing plant had to shut down.

The Brexit Referendum

Procurement management across the world could not have ignored the impact of Brexit on their procurement function keeping in mind the interconnectedness of the global trade. The effect was felt soon after the Brexit announcement as the value of pound sterling dropped by over 10% over the Euro, affecting the import and export of goods and services. Laws and regulations would impose increased tariff levels, and the UK would lose some of the free trade benefits they were enjoying. Additionally, it also impacted the labor market as it limited the availability of low-skilled migrant labor. Businesses across the UK will suddenly have a smaller pool of candidates to consider for filling their procurement positions.

China’s Greenest Supply Chain: Apple

The Chinese NGO Institute of Public and Environmental Affairs (IPE) named Apple the greenest supply chain in China after measuring environmental performance in the supply chain across 250 brands. Apple received a rating of 82.5 out of 100 with Dell following with a score of 81. The evaluation takes into consideration responsiveness and transparency, energy conservation and emissions reduction, and compliance and corrective actions of the companies.

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Rethink Your Supply Chain with Crowdsourcing

The term crowdsourcing is an extended version of the proverb “the more, the merrier.” The idea of soliciting ideas, services, or information from a large pool of people has been there for quite some time. Traditional companies function within their closed boundaries with few people in the chair making a decision based on what they think would be good for the company. However, the more customer-centric companies involve multiple people in the ideation process, collecting feedback from a large group of people toSE_Demo2 deliver a truly great product. The advent of the internet era has made the crowdsourcing process even more easier. Procurement and supply chain professionals are now turning their focus towards crowdsourcing to bring such valuable inputs for their supply chain.

Why are supply chain professionals emphasizing on Crowdsourcing?

On-time, Cost-Effective Delivery

If there is ever a company that provides on-time, cost-effective delivery delighting the customer, Amazon would be the top name in people’s mind. Their delivery services are so impressive that even after choosing standard 4-5 business days delivery, they show up on your doorstep the next day, or sometimes even the same day. They are able to do this because of the vast distribution network and independent delivery fleet. Part of this success can be credited to their effort to crowdsource their delivery to service providers such as Cargomatic, who connects local shippers with carrier companies having extra space in their trucks. Delivery companies are also trying to solve the last-mile connectivity problems by crowdsourcing traffic apps, which help drivers find the most efficient routes with data from other real-time drivers.

Supports Risk Management

Most companies put in proactive risk management strategies to limit the damage and be adaptive in case of unavoidable circumstances like a natural disaster or geopolitical turmoil. In order to be prepared for situations like this and avoid manufacturing and transportation breakdown, companies are resorting to crowdsourcing. For instance, a project called zeean, enlists public feedback to collect data on economic responses to extreme weather. The company uses such data to improve supply chain responsiveness and resiliency. Additionally, crowdsourcing technology can enable companies to communicate and collaborate with their suppliers in real-time in order to mitigate supply chain risks.

Product Innovation

The advent of social media platforms has allowed brands to communicate and engage with their customers and gain valuable inputs on product development. For instance, Lego has a dedicated site for their fans and customers who can contribute design ideas for the new product. Additionally, users can vote for their favorite idea and state how much they are willing to pay for it. In case the idea gets support from more than 10,000 people, the official Lego board will decide for its production. Companies not only crowdsource ideas for the product but also for marketing and communication as Oreo did by devising the brand positioning for new Mini-Oreo cookies. The company received more than 500 ideas from over 42 countries and was able to identify ten potential ideas for their brand positioning.

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AI Technology – Redefining the Wheel in Supply Chain Planning

Each decade we are blessed with technology that can transform the way the world operates ranging from the wheel, electricity, telecommunications, and internet, to smartphones. Artificial intelligence (AI) can be touted as the next big thing along the line which can simulate human thinking process and which enables the machine to process large data sets and provide accurate decision-outcome. A majority of the companies believe AI to be the next step in the industrial revolution which has a huge potential for complete automation with minimal errors. Businesses have realized the power of AI in improving their efficiency and profitability, as a result of which they have started using AI in the field of robotics by automating tasks from production to delivery. However, businesses are exploring ways to leverage AI into their supply chain planning process including demand forecasting, production planning, and logistics planning.

Here are some ways AI can improve the efficiency of supply chain planning:SE_Demo2

Streamlined Process in Supply Chain Planning
The businesses relying on mechanical ways of handling their supply chain planning process are facing consequences of a tedious distribution management systems that handles multiple operations prone to human error. The process of manually identifying stock levels, estimating optimal replenishment cycle, and fulfilling orders are highly erroneous and inaccurate. AI systems would be able to scan through colossal amounts of historical data to streamline every aspect of supply chain planning from demand to inventory to supply.

Handle Supply Chain Disruptions
Supply chain professionals are humans after all, and humans tend to stick to things that are familiar to them. On the contrary, AI would not be bogged down with any pre-conceived notion, and act purely on the basis of data available to them and past-outcomes of decisions. For instance, IBM recently launched Watson Supply Chain, which considers infinite sources of information including social media, weather forecasts, historical data, and newsfeeds, and uses cognitive technology to track and predict supply chain disruptions to suggest the best course of action.

Logistics Optimization
Apart from forecasting and scheduling functions of supply chain planning, companies are looking to incorporate AI into technologies such as driverless cars to optimize the process of logistics planning. The advent of autonomous vehicles could significantly improve accuracy, decrease lead times, reduce transportation costs, and save human labor costs. For instance, AI technology of TransVoyant is able to collect data from satellites, radars, sensors, and smartphones to track real-time movement of goods and estimate the time of arrival by factoring in weather conditions, port congestion, and natural disasters.

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Procurement Research Report on the Global Financial Reporting Software Market Now Available from SpendEdge

North America and Europe are the largest markets for financial reporting software due to the presence of global banks, financial institutions, MNCs with high reporting requirements, stringent regulatory framework, and excellent data protection and privacy laws.

LONDON: The procurement research report on the financial reporting software market is an indispensable part of SpendEdge’s IT category portfolio and offers an in-depth assessment of the crucial factors influencing the supply market, strategic procurement and sourcing decisions, pricing models, and procurement best practices. Furthermore, it also offers detailed insights into the supply chain management, key market developments, and demand-supply shifts to help sourcing and procurement experts make smart procurement decisions.

The banking and financial services industry is the major buyer of the financial reporting software market. The increase in regulatory requirements due to major financial debacles around the world has also played a crucial role in the growth of this market.

“Businesses must assess the strength of the cloud security provided by the supplier by using a cloud controls matrix,” says Bhuvaneshwari Udayakumar, an IT industry procurement research specialist at SpendEdge.

One of the major challenge faced by procurement managers in procuring financial reporting software is the data security and privacy. The storage of data in public cloud, which is shared by multiple clients, exposes the businesses to the risk of data manipulation and exploitation by competitors.

 

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This procurement report on the financial reporting software market offers insights on:

  • Supply markets, growth drivers, trends, and imminent restraints
  • Key suppliers and assessment of their capabilities
  • Procurement best practices
  • Negotiation strategies and cost-saving opportunities
  • Pricing models and category innovations
  • For a comprehensive, detailed list, view our full report

 

 

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Why are SCM Professionals Rooting for Agile Supply Chain Practices over Lean Practices?

Companies have focused their procurement practices around lean supply chain for many decades. In today’s competitive business scenario, where the consumer is highly demanding and the environmental factors largely volatile, following lean supply chain practices just isn’t enough. The shifting focus from cost reduction to increasing consumer satisfaction has made the modern supply chain increasingly complex. Today, digitization, augmented reality, IoT, and artificial intelligence are transforming how a supply chain functions and companies that are unable to keep up with the pace are losing out on lucrative opportunities. As a result, companies are considering agile supply chain, which is highly flexible and able to adapt quickly to changing conditions. Here are some of the reasons why supply chain professionals should consider an agile supply chain practices:SE_Demo2

Ability to Respond to Change
Adopting agile supply chain practices enables the company to handle the market volatility, changes in the economy, changes in technology and equipment, and changes in other variables in a better way. The organizations can rapidly adjust to changing market conditions by helping the manufacturers to produce the correct amount of goods on a daily basis, rather than relying on monthly or quarterly forecasts.

Mass Customization
There has been a drastic shift in consumer preferences from the time of Henry Ford, where mass-produced, low-cost products were preferred, to the present time where you can find your name on a bottle of Coke. In order to implement customization on an economically feasible scale, companies have to adopt agile supply chain practices to respond to changing customer preferences quickly.

Ability to Operate with Low Inventory
Procurement professionals are well aware of maintaining high levels of inventory; not only is there a risk of stock obsolescence and spoilage, it also freezes the company’s much-needed capital base. One industry where the dangers of keeping high inventory is imminent is in the fashion industry, where the summer collection gets outdated by the spring itself, forcing the company to sell the inventory at heavy discount. Zara, by adopting agile supply chain practices, has been able to maintain low inventory and replenish the stock fortnightly.

Agile supply chain practices can significantly improve performance in industries compared to lean supply chain where the market is volatile and unpredictable, the customer demand is ever-changing, or if there is a high level of innovation.

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Challenges in Managing the Cold Chain Logistics of Perishable Goods

The expansion of global trade and optimization of the supply chain has made it possible for perishable goods to travel long distances to reach the final consumer. Products such as flowers, vegetables, fruits, meat, and bakery items decay or deteriorate in quality when exposed to environmental conditions such as humidity or moisture. The transportation of such perishable goods is done with the help of temperature controlled cold chain logistics. Transporting such temperature-sensitive goods across thousands of miles poses some procurement challenge for cold chain logistics. Here are some of the major procurement pain points for cold chain logistics:

Lack of Traceability Across Supply Chain

Perishable goods may damage or decay when proper conditions are not met, and it is hard for the end consumer to identify where the break occurred in the transportation process. The break in cold chain logistics may take place during loading/unloading process, at freight forwarders place, or in unrefrigerated containers. The advent of RFID and GPS technology along with traceability standards in the cold chain logistics ensure the food safety.

Request Free SampleLack of Technical Expertise

Unlike the logistics of regular goods, different perishable goods have specific ranges of temperature that needs to be maintained. For instance, an ice cream needs to be kept at a temperature of -25°C; whereas, a temperature of 0-4°C will suffice for milk products. The staff may not be aware of such technicalities and may damage the product in-transit. As a result, it is essential for the buyers to engage with the suppliers to conduct training and offer technical expertise.

Lack of Communication Between Service Providers and Buyers

At present, IoT systems have not developed to a level where it can facilitate seamless communication between the service providers and buyers. Such a communication problem can cause delays in transportation and cause other problems as the goods are passed through multiple channel members across vast geographies. In the future, when IoT systems are widely used, buyers and sellers can communicate easily to clarify timeframes, delays, or variations in the transit period.

Read more about procurement pain points in the cold chain logistics and perishable goods transportation market along with supply market landscape, pricing, and procurement insights in SpendEdge’s upcoming procurement report on the perishable goods transportation market.

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Connected Devices and IoT are Paving the Path for a Smart Supply Chain

Organizations across the globe are striving to revamp and re-design their supply chain in a bid to make it smarter than ever before. Automated warehouses, shipment containers, distribution centers, factory floors and delivery systems, what do these have in common? They are all part of the great supply chain, which as we all know, is a network between the suppliers and the business which includes all the processes right from sourcing to manufacturing and delivering the final product to the target consumer.

Today, not a single business function has been left untouched by the wave of digital transformation. This transformation has enabled businesses to take strategic decisions aided by data and insights. The Internet of things or IoT is the much discussed topic all around the globe because of the wide array of ‘smart, connected products’ such as cars, devices, robots, washing machines, air-conditioner, etc. that have in-built sensors and connectivity to the ubiquitous internet to help generate tremendous volumes of data. This data is essential for the business to understand consumer habits and make several crucial and timely business decisions. And, what better way to enter the business other than the great old supply chain, thereby connecting devices that will not only generate high volumes of data but also transform operations. What connectivity holds in store for supply chains, you ask? Here’s what it has to offer.

Real Time Visibility with Improved Customer Service and Other Benefits

IoT eliminates the most time intensive challenges of the supply chain, by providing real time visibility of issues across all departments and at every step. This allows for quick problem solving or preventing it altogether. Additionally, it also improves customer service, making customers happy by providing on-time delivery while providing real time information and delivery tracking, thereby satisfying the consumers’ appetite for convenience and instant gratification.

Besides these, IoT will enable automated monitoring, control and optimization of processes with the help of analytics to drive decisions. It will facilitate in detecting overload conditions, forecast demand patterns, identify gaps between actual and expected performance standards, leverage IT support, using GPS and RFID to enable tracking information, adjusting pricing strategies by managing inventories, controlling spoilage and delay related issues. Thereby streamlining operations, reducing costs, better management of assets, reducing time-to-market, enable forecasting and mitigating risks to eventually drive customer satisfaction.

At SpendEdge, our experienced team of procurement experts will drive unprecedented efficiency by assisting you to collate, organize, cleanse, categorize and analyze data so as to derive actionable insights that will help you in becoming a true market disruptor.

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