Supply Chain Risk Management Blog

Does not compute

Changing customer demands, high levels of risk in global markets and globally dispersed partners are among the key risks facing manufacturers, according to a survey by pollsters YouGov for GTNexus.

The results, published earlier this month, show four in ten manufacturers have experienced a supply chain disruption impacting their business in the last 12 months – whether external, such as from weather or strikes, or internal, from technology problems or shortages of talent, for example. As the report notes, the findings potentially underplay the issue, with other studies showing up to three quarters of businesses experiencing a disruption each year.

“Virtually no business involved in producing or selling products is immune to supply chain disruption. Events such as natural disasters that impact supply chains are unavoidable, and a host of other disruptions – everything from supplier shortfalls to product transport challenges to labour strikes, terrorism and social unrest – occur with surprising frequency,” it reads.

Despite this, three quarters of manufacturers operate without a Chief Supply Chain Officer, the survey found. Instead, the findings suggest manufacturers will be increasingly reliant on technology to ensure effective supply chains. Among the top level findings, the survey reports that advanced analytics and the Internet of Things are expected to prove key technologies in boosting supply chain performance.

People or processors?
It’s difficult to fault this: the complexity of modern supply chains increasingly means a technological solution is essential for a coherent view.

As the report notes: “Having visibility across the supply chain and its involved business partners is the single most important way to proactively sense and respond to disruptions, and thus mitigate their impact. You can only control what you can see.”

The report authors are also far from alone in recognising the importance and potential of the Internet of things in enhancing visibility across the supply chain. Moreover, the challenge of achieving visibility and the potential benefits technology could bring are not unique to manufacturing. Similar lessons are just as applicable to sectors such as healthcare and pharmaceuticals.

Yet it’s also obvious that technology alone cannot answer the challenges facing businesses’ supply chains.

First, firms need the right people with the insight and expertise to seek and apply the technology available effectively. Second, businesses need commitment at the top to address issues of supply chain resilience to begin with.

Unfortunately, that commitment is not always as solid as it should be: Another recent survey of pharma and healthcare firms found that, despite unplanned events having a major impact on them, 40% of supply chain decision makers in these sectors still didn’t rank contingency planning as a critical area for investment.

Without a commitment to address that problem, technology will only ever be able to do so much.

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