Jan. 12 2023 11:49 AM

Pandemic(s), wildfires, hurricanes and other cataclysmic disruptions push supply chains to go digital

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Global supply chains have largely been ignored by content and process technology vendors. Despite strategic investments in supply chain management (SCM) software, companies still rely heavily on hard copy documentation and manual processes to undergird and work around enterprise software, creating a gap between what SCM applications and manual processes can do. Few businesses can truly track, trace and analyze — much less adapt, optimize and improve — their supply chains.

Painful disruptions highlight the need for business continuity and mitigating against market disruptions. Post-crisis, enterprises will accelerate investments in technologies that bridge information and process gaps within the supply chain, including process automation, robotic process automation (RPA), Internet of Things (IoT), blockchain, cloud, collaboration and information management. Technologies will flow into the supply chain to overhaul outdated processes and mitigate the risk of future market shocks.

Today’s Challenge

Immediately, enterprises urgently need to build more transparency, efficiency, integration and agility into supply chains by bridging the gaps between ERP, SCM and manual processes. Crucial areas for improvement include:
  • Digitizing labor-intensive, inefficient, paper-based processes
  • Leveraging business insight from data analysis and process intelligence
  • Bridging key collaborative elements within supply chains
IMMEDIATE ATTENTION REQUIRED
Three key areas to focus on are:
  1. Digitizing paper-based processes. The supply chain’s paper burden is immense, with dozens if not hundreds of hard copy documents used in transportation, quality assurance and billing. For example, managing the movement of agricultural products is often slow, paper-intensive, expensive and riddled with errors. Despite technology, most of these documents, from bills of lading to invoices, are hard copy.
  2. Leveraging data analysis and process intelligence. Supply chains produce thousands of data points. With the increased use of IoT for tracking and tracing, these data points will increase exponentially. Supply chain data is information-rich, yet despite big data, machine learning, analytics and AI, it is often poorly managed and unleveraged.
  3. Bridging collaboration within supply chains. Supply chains are interconnected links between suppliers and third-party agencies, including producers, storage, transportation, wholesalers and retailers. Using automation to bridge gaps between links, share information and collaborate to ensure the smooth flow of goods and services is essential. Yet, unless trust is integral to the system, an organization may question the data. For example, though an IT system may say that X amount of inventory is in stock, without relationships in place, most parties will verify the situation manually. (“Intelligent Process Automation – Transform the Customer Experience by Tackling the Dreaded Handoff Syndrome,” Deep Analysis)

Moving Forward

Business leaders can take quick actions to alleviate pain points during a crisis. Recommendations include:
  • Use process mining to reduce friction. Uncover real-time issues through process mining tools that analyze core processes for root causes — seeking insights into deviations, the causes for delays and factors driving costs higher. Process mining can increase business agility by streamlining work processes going through CRM, ERP and digital process automation systems. (“Process Mining & the Lost Art of Continuous Improvement,” Deep Analysis)
  • Get a “SWAT” team to identify wasteful work activities. Unautomated activities, once tolerated or ignored, now strain the virtual workforce. This includes dependence on paper forms, physical mail, and manual workarounds. Put your Six Sigma black belts and Lean practitioners to work on increasing agility and eliminating bottlenecks. (“Digital Transformation – Bridge The Skills Abyss,” Deep Analysis)
  • Use agile to quickly implement case management (including document management, digital decisioning, and digital process automation). Focus on automating or eliminating manual steps, activities, and processes — while also eliminating physical documents that clog the system. Target case management at dynamic process instances that take different paths to completion. (“State of the Digital Process Automation Market – Trends 2020-2025,” and “State of the Digital Process Automation Market – Current Assessment 2019,” Deep Analysis)
  • Use RPA to automate time-consuming, wasteful activities surrounding ERP, SCM and CRM. Automating tasks with RPA may only be temporary, but even that short-term approach can help to bridge performance gaps during extreme disruption to supply chains and other processes.
  • Explore blockchain to create shared and trusted networks. Enterprise blockchains provide the means to distribute a single version of the truth and ensure the need for only a single shared copy of an invoice, bill of lading, delivery note or manifest throughout the chain. Consortiums and government bodies are actively working to build standards and procedures leveraging blockchain to reduce errors and to speed up slow and costly activities like customs clearance in import/export.
  • Digitize paper to capture, share and secure paper documents and to provide anywhere, anytime, any device access to those documents. Focus on mobile-friendly cloud-based services and intelligent capture to speed the input of high volumes.
  • Contextualize collaboration. Too many organizations toss collaboration and document-sharing tools into the workforce and expect employees to adapt them to their work styles, tasks and activities. Instead, contextualize these tools by integrating them into the supply chain. Make sure employees can readily use these tools from home or other remote locations.
  • Get your brightest leaders working on “disruptive” change management. For years, adaptive change management has been embraced by leaders during uncertain times—although now replaced by disruptive. Aligning leadership vision and managerial competence to guide the workforce through massive disruptions is crucial for the new “normal.”
  • Consider using machine learning/AI. Though the popular press positions AI as a big, scary thing, in the real world most enterprise AI is small, low-cost and easy to deploy. Look for pre-packaged products that can (for example) automatically read documents with remarkable accuracy and extract information and data. (“AI/ML in Digital Process Automation: It's Complicated,” Deep Analysis)
  • Take another look at the IoT. In reality, IoT sensors that can track light, humidity, location, barometric pressure and movement within the same device are a commodity. Some of the most advanced sensors cost under $10 a piece, includes RFID, and can deliver extremely deep, accurate and relevant information.
  • Don’t rip and replace. Never immediately overhaul by ripping and replacing existing systems and procedures. The results can be disastrous. Instead, start small but think big. Look for incremental fixes to existing supply chain activities, experiment locally and see what works and what doesn’t. Think big, create a longer-term strategy for automation and optimization, and work step-by-step toward achieving that goal.

CALL TO ACTION

Many SCM systems still rely on paper-based processes, making it extremely difficult to respond quickly during crises. Ironically, the enterprises are unencumbered by complex legacy applications and workflows, making them ideal candidates for transformation. View today’s challenges and disruptions as opportunities to improve, update and digitize using technologies that fill the gaps.

Connie Moore is the Vice President and Principal Analyst at Deep Analysis, a research advisory firm focused on emerging technologies. Connie is a widely recognized and respected analyst throughout the world for her groundbreaking research in business process management and information management. Her research encompasses business transformation, process management, customer experience management, information management, and organizational change management. Previously, she led the business process and content/collaboration research teams at Forrester for over 20 years. She also received the highly coveted Marvin L. Manheim Award from the Workflow and Reengineering Association (WARIA). 
 
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