Technology is the cushion against supply chain foul-ups

IN today's globalised economy, supply chains can be likened to the lifeblood that keeps our world pumping. However, recent disruptions raise worries about whether this vital supply chain network is robust and agile enough to cope with the world's rapidly growing needs.

The six-day Suez Canal blockage in March resulted in losses of up to US$1 billion per week, and left companies across the globe facing more setbacks. Recently, congestions at the port of Yantian caused backlogs for multiple large markets like Europe, North America, Latin America and Oceania. The latter disruption came on top of an already brittle logistics system that is currently grappling with several unprecedented challenges, including equipment shortages and decreased schedule reliability.

Despite these events, recent research revealed 60 per cent of supply chain leaders admitted that their supply chains were not designed for resilience, but rather engineered primarily for speed and cost-efficiency. What then can these leaders do as they continue to be plagued by such issues?

The solution may be to switch from the pursuit of efficiency to resilience and self-reliance, and technology offers the industry its best shot.

With global disruptions to the supply chain projected to occur every 3.7 years, vulnerabilities of the industry must be addressed sooner rather than later. Pre-existing issues such as lack of complete visibility of how offshore manufacturers are managed and manual processes remain overlooked even today, pushing an already-taxed system to a breaking point.

Even before the pandemic, businesses were heavily dependent on the offshoring-outsourcing of manufacturers and suppliers in their efforts to bridge the supply-chain network. With multiple suppliers spread across the globe, enterprises could quickly lose visibility and control over their shipments when the global supply chain goes awry. To make things worse, manual processes such as delivery-order management via e-mail and phone conversations prevent companies from recovering fully from these setbacks.

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Data provides "x-ray" visibility into a complex system and helps companies better manage the flow of goods, anticipate potential bottlenecks, and proactively support contingency planning. Global logistics hubs such as Singapore have also recognised the value of data in end-to-end supply chain visibility - with the recent launch of the Singapore Trade Data Exchange (SGTraDex). The new exchange aims to speed up the processing of customs clearance and enhance visibility of container logistics.

When working with multiple partners in the supply chain line, incidents such as delays and bottlenecks may be impossible to avoid, but how businesses respond to a crisis can help leaders stay ahead of these disruptions. For instance, data in logistics enables unique demand projections and forecasting ahead of traditional peak periods, allowing companies to minimise over-ordering of raw materials while ensuring adequate supply.

INTERNAL AND GLOBAL FACTORS

Together with data consolidated by analysing internal and global factors, business leaders can shift and adjust each supply chain node accordingly and quickly so they can mitigate future disruptions caused by unpredictable market forces. Businesses can also leverage technology such as all-in-one logistics platforms - which allow for visibility into all of the sources of information about their global supply chain in one place. These platforms can also help businesses make intelligent decisions in regard to their shipping needs, alongside disaster-recovery support in times of disruptions.

Business leaders can tap into automation to empower their people. No longer will employees be encumbered by manual and repetitive tasks such as tracking the number of shipments that enter the port today. Rather, with automation, people can reclaim the bandwidth they need to generate higher value for the organisation.

Automating the supply chain offers several benefits, such as increasing productivity, efficiency, and accuracy. Today, automated order-management systems have the advantage of agility - they can streamline orders from multiple channels and customers quickly and efficiently. On the contrary, supply chain networks that still depend on manual processes are susceptible to repeatable and error-prone process-oriented tasks such as stocking mistakes and documentation errors.

Implementing automated processes helps organisations to schedule deliveries seamlessly, highlight potential delays that need immediate attention, and empower people with the insights and freedom needed to work smarter and grow the organisation.

To pivot for the future, modern supply chain leaders need to go digital. Real-time insights can help organisations avoid bottlenecks and shipment delays during peak logistics seasons, alongside future disruptions. While it is not possible to fully immunise supply chains against disruptions around the world, technology built by and for supply-chain experts can significantly soften the impact on the industry. By embracing resilience and self-reliance, technology will become the enabler to help businesses achieve these goals.

Businesses can then enjoy greater protection and immunity during uncertain times as it helps supply chains to regenerate and rebuild a more resilient body - one that will lift global logistics into a new future.

• The writer is vice-president for Asia at CH Robinson.