Supply chains carry a lot of risk, as there are many moving pieces across the world. Especially for bigger supply chains, there is plenty that can go wrong before a business knows what happened. Forbes contributor Natalie Burg wrote that technology, such as inventory control systems, can be a good way to remove much of the risk from the supply chain and make it easier to work with.
A recent report from Deloitte found that supply chains are starting to get riskier, as disruptions are now more frequently happening and more costly than before. Sudden changes in the market, product flow disruption, quality failure and margin erosion are big concerns, as many companies are failing to utilize technologies which could help them keep these things under control. Only 36 percent of business currently use predictive modeling and 29 percent employ data tools that can predict when risk is coming.
Burg said there are many tools organizations could use to mitigate risk, including software that connects the business to the manufacturing supply chain on a more advanced level. Technology professional Kilara Le said businesses should have a central hub of product information that can increase connectivity and visibility, as well as help keep a handle on costs, logistic and compliance.
"Supply chain and design are becoming more connected," Le said. "Many industries that are trying to shorten time-to-market are able use [technology] to get teams on the same page looking at the same information. This access to real-time, up-to-date information helps them to make better decisions and react quickly to issues that arise."
Business Case Must Come First
Before adopting any kind of supply chain technology or software tools, SuppyChain247 said there must be thought given to the business case that would be made for adoption. How the technology will improve business and make it better should be core to what the company does, the website said, and long-time supply chain educator and software analyst Larry Lapide added that the benefits need to address asset utilization, customer response and efficiency, above all other things.
With efficiency, companies need to focus on cost of good savings, operating cost reductions and improvements in productivity. Asset utilization is often overlooked, Lapide said, as this can include increased plant and warehouse usage, faster turn of inventory and better facility utilization. Software for customer response will be critical for order fulfillment, improved cycle time and enhanced service quality.
Burg spoke with software professional Steve Banker, who works with one large chemical company that utilizes software to help them stay ahead of compliance and quality control violations before it is too late.
"Event management software is critical in assuring that ... personnel or supply chain partners are not overwhelmed with data," Banker told Forbes. "This is necessary partly because of the large number of different things that can generate alerts."
Management Tools Essential to Solving Problems
Tools for inventory management should also be heavily considered by organizations, as Burg said it can help save a lot of time and cut down on margins of error in ordering goods.
Industry Week pointed out just how important these tools can be, as it reported on a large salmonella outbreak that recently impacted one for the country's largest suppliers of organic peanuts. The company was forced to recall all of their jars of peanut products. With an inventory management system in place, executives were able to determine where the contaminated peanuts were shipped from, when it happened and target recall efforts.
"In this industry, we need to be sure that whenever you buy food, you have the confidence of knowing how it was produced and that it is safe," this food company's CEO Charlie Sweat told the news source, adding that the organization was able to recall long before anyone got sick.
By having real-time traceability and a system that allowed it to identify where its products were across the supply chain, the company enjoyed increased visibility other firms may lack. Every detail "from farm to fork," he said, was able to be sorted out and fixed in a timely manner. Companies with inventory management tools can help themselves avoid some for the mess that other organizations may fall into more easily.