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OP-ED. Supply Shain Crisis: The Catalyst For A Profound Transformation

OP-ED. Supply Shain Crisis: The Catalyst For A Profound Transformation
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Until recently, the supply chain was unthought. Then the COVID-19 pandemic came along and we realized that if the shops were full, if orders were being delivered as a result of online purchases, it was because there was an infrastructure working in the background. But the disruptions in the supply chain (factory closures, container shortages, etc.) made its weaknesses obvious.

By Faki Saadi, Sales director France and Benelux at SOTI

These weaknesses are multiple. The first is the lack of visibility, with the difficulty of knowing where goods are, the amount of inventory, or the available capacity in containers. This problem has been magnified by the unavailability of a number of factories in China due to the covid, but also in Taiwan due to a tsunami, which pushes companies to multiply their supplies. Finally, the shortage of containers is not only significantly extending delivery times, but also driving up shipping costs, with rates up to four times higher than before the pandemic.

The Future of the Supply Chain

To address these various shortcomings, the post-pandemic supply chain will be more diverse and resilient. Until recently, many supply chains resembled a chain with a beginning, an end, and one link after another. But the crisis has dismantled what held these links together, and products no longer move from source to consumer.

The multiple disruptions in the supply chain are pushing companies to diversify their sources and modes of transport. So if a factory or a ship is down, there will be an alternative and the disruption will be minimized. Diversification of the supply chain makes it more complex to operate, with multiple stakeholders, but it has the advantage of being a source of resilience for the company.

This raises a new question: how can companies manage this added complexity?

Technologies for Managing Complex Supply Chains

The digital transformation of supply chains has been underway for several years. It did not wait for the disruptions related to covid, but these disruptions have had an accelerating role in this transformation. Here are some examples.

New technologies will improve forecasting capabilities. We all remember the temporary shortages of toilet paper and pasta in supermarkets. The peak in demand was unpredictable based on historical data, but artificial intelligence coupled with machine learning can help companies better manage their inventory.

Technology, and in particular connected objects, are increasingly able to provide information such as tire pressure, temperature and fuel consumption. This type of information can help optimize energy consumption and lower the carbon footprint of the supply chain.

Another technology is application builders. This type of tool allows you to create an application (which can capture data, automatically transmit it, scan barcodes, receive relevant alerts, etc.) by drag and drop. This means that there will be more and more enterprise applications with minimal development costs. This will lead to new uses for connected objects and give access to a high degree of visibility over the entire supply chain. From there, its automation will be possible.

The crisis has pushed companies to find solutions to reduce the impact of disruptions in their supply chain. These technologies are being developed and implemented to improve visibility across the supply chain and better manage the complexity of multiple supply sources as the chain becomes networked. With these new technologies, which aim to automate the supply chain, companies are becoming more resilient.

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