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Supply Chain Management

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Supply Chain Management

 

For any kind of business, it is essential that their production flow handling of their goods or services would be in top order, starting from the acquisition, handling, and processing of raw components/materials to products, goods or services up until to the delivery of either one of those to the customer themselves. This is where the “Supply Chain Management” practice comes in, to handle the said production flow.

 

Supply chain management is usually composed of a network of suppliers (which are the “links” of the supply chain) that provides raw materials to the organizations/companies linked to the supply chain. The management aspect of this is composed of six major components, which are listed below:

 

  • Planning
  • Sourcing
  • Making
  • Delivering/Logistics
  • Returning
  • Enabling

 

Supply Chain Management Evolution

 

This type of management has evolved over the years since it was implemented by previous companies and organizations decades before. Modern supply chain management usually revolves around data management, services and products bundling to solutions, which in turn affect product and service quality, deliveries, costs, customer service, and profitability.

 

Also, it usually takes advantage of generated data by the chain process, which are then curated by each company’s analytical experts and data scientists. Most data curated are analyzed in real-time to ensure efficient data feedback while maintaining minimal latency.

 

Importance of Supply Chain Management

 

Minimizing overall costs, wastes, and time used in the production cycle are the benefits of effective supply chain management. However, it is not completely perfect, and it is usually a stopgap by retailers and stores of companies in avoiding empty store shelves due to a shortage of supply.

 

Due to this, further improvements are being implemented in this system to achieve better benefits from this kind of management, by doing the following:

 

  • Identifying potential problems.
  • Optimizing price dynamically.
  • “Available to promise” inventory allocation improvements.

 

Right Software For Digital Supply Chain Management

 

Due to the constant evolution of the supply chain management, various organizations have taken the management practice digitally, aside from keeping its physical counterpart active, and resulted in the birth of various software that can manage supply chains via digital network akin to a physical network.

 

This digital version usually handles the supply information being curated to the monitoring of sales that will be the basis for most manufacturers on what to ship to their partnered organizations’ store shelves, reducing unnecessary additional costs for overstocking unneeded inventory.

 

Supply Chain Management’s Key Features

 

An effective supply chain management results in good business, with highly profitable returns and very satisfied customers and consumers alike.

 

The key features of an effective supply chain management are known as the “Five Cs” which are listed below:

 

  • Connected
  • Collaborative
  • Cyber-aware
  • Cognitively-enabled
  • Comprehensive

 

Those features are essential to the digital aspect of supply chain management due to it being connected via cloud-based commerce, which in turn connects to the physical side of supply chain management resulting in a complex and continuous system that handles organizational supply inventory for their partnered stores and retailer branches.

 

The Future of Headhunting in Supply-Chain Management

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The Future of Headhunting in Supply-Chain Management

The industrial revolution was a major revelation to the whole world back in the 19th century. It changed people’s perspectives of the working industry holistically. The fast-paced revolution was sort of like an eye-opener to the public. It was a race to the future, and no one saw it passing so fast.

In 2019, the game is different in all aspects. Machines and modern equipment are not new. Technology, with a brisk run, has caught up with the lives of all the people, and they are dependent on it. There are tribal hamlets without big changes in villages and forests still, but technology is surely catching up. It won’t be long before you get mobile signals inside all dense forests.

Where is business heading then? The global research and advisory firm Gartner predict that within a year, at least 50% of major business systems will have IoT in it, in one way or the other. IoT is the internet connectivity extended into physical devices and everyday objects, and we would already know how big a role IoT plays already in our daily lives. To see a person not using Google maps for navigation in a major city would indeed be a sight of rarity.

If you think this is the pinnacle of technological advancement, then count it only as the beginning.  We are about to witness some more action. Gartner also predicts that up to 36 million inter-connected smart devices will be installed in a decade and that it would generate over $300 million in revenue. This means IoT will have a huge role to play in how the supply chain operates for business enterprises.

SCM Revolution

Supply-chain management is the effective management of the flow of goods and services, involving movement, storage and delivery of finished goods and services from the point of origin to the point of consumption.  SCM calls for an integrated approach in design, planning, execution, control, and monitoring of supply-chain activities. IoT has a big role to play here.

Many global firms recognize the transformation role played by the IoT in the manufacturing, retail, and service sectors. Most of the organizations depend on IoT solutions for locating objects, containers, and personnel. Smart mailboxes are used by postal services in some remote areas to find out if the boxes are empty. This saves unwanted journeys. Some pharmaceutical companies use sensors to monitor their temperature-sensitive products. When you order a product online, you get an online tracker to monitor its delivery. All these setups increase the productivity of the organizations. This is business intelligence in its higher echelons.

The IoT devices have revolutionized the supply-chain systems.  It is much easier to know the whereabouts of the products/goods in storage or movement. It also helps the companies to stay competitive in the market. Let’s talk about some of the major operational efficiencies of IoT, and you will know about the main advantages in the field because of it.

 

 

 

Asset Tracking: Bar codes and tracking numbers were usually used to manage the goods in the supply chain.  However, IoT has changed the entire game plan. The old methods are no longer the best. There are plenty of methods using which the whole process can be expedited.  RFID (Radio Frequency Identification) is used nowadays as the main method of communication.  RFID and GPS sensors can be used to track the products. It’s not just a matter of simple tracking here. These sensors can be used to calculate and arrange a wide array of data. Fetching granular data like the temperature of storage is an example. The amount of time spent by cargo and the exact location of the goods and products is priceless information. This way, the companies can use the data as leverage to minimize the flaws next time. The labor and time can be easily managed. In business, excessive time and headcount mean money lost, and through IoT, the companies get to save a lot of it.  In a nutshell, the organizations have a wide array of data that they can use to improve and take their business to the next level. Quality control, on-time deliveries and product forecast – It all becomes easier and much better.

Vendor Relations: When we talk about healthy relations with vendors, it doesn’t mean a friendly handshake or how good you are in talking them into a good deal. It is much bigger than that. Data shows that over 60% of the value of a company is derived from its suppliers. It’s a huge share and that is exactly why it is important to have healthy vendor relationships. The information available through IoT plays a crucial role here. When asset tracking improves, the companies get a good chance to tweak their production schedules and charts to improve their overall productivity. This way, it’s easy to zero in on poor vendor relationships that cost the company money. How are the vendors handling the supplies they are sending you? How are they handling them once the product is made? The quality of products is important, and it reciprocates as good relationships with customers, helping in customer retention as well.

Forecast and inventory: When data gets messier, the whole system crumbles. When there is an expert way to handle data, then there is more clarity. The accuracy of IoT in handling inventories is commendable. The speed and accuracy of the operations are better than any human who can do the same tasks at his prime. Instead of a human, when there is a robot to scan the QR codes or handle the data, then the speed increases manifold. This is already a custom in most of the multi-national companies like Amazon who are experts in Supply Chain Management. The inventory can be tracked easily, and the supplies for stock and future can be managed much more productively. Who wouldn’t want error-free efficiency and preciseness in handling data?

Connected Fleets: People used to wait for ages for a mail to come and fall on their doorsteps. But gone are those days. It’s faster, and forget predictions and hope, you can easily pinpoint the exact time of delivery and location of a product. It is imperative in supply chain management to have a connected network of containers, trucks, vans, or any vehicle in that case used for the transportation of goods. Nothing is lost and all information is just within the reach of your fingertip. Where are the containers? How long will it take to reach the destination? What are the possible contingencies and how can it be handled without losing time and manpower? There are questions aplenty, but a connected fleet with IoT is the answer to most of these questions. Data is the key, and there is an improvement in every step forward. Manufacturers, vendors, retailers, customers and all elements in the operational structure can reap benefits using IoT.

Maintenance: A faulty system or machine costs a lot for companies when it’s supply chain they are dealing with. For this reason, it is important for the companies/manufacturers to constantly keep an eye on maintenance. Smart sensors through IoT have the power to keep everything inter-connected and intact. This prevents downtimes and blackouts. Prevention is better than cure, and that’s exactly what scheduled maintenance through IoT can do to your network.

Why is IoT a Game-Changer? Let’s Summarise

  • It’s reassuring that goods can be precisely located, both in rest and motion
  • Problems with the goods lost, or delay in delivery can be easily identified and rectified
  • Stakeholders get to know when they can expect to receive and process goods
  • Real-time shipment and tracking
  • Visibility and transparency of stock/inventory
  • Quality management and optimization
  • Efficiency in storage and distribution of goods and products
  • Time-management
  • Healthy vendor-relationships

Impact on Recruitment

All these developments act as a precursor to a new generation where all the activities and operations will be aligned using a technological handle that’s both easier to manage and good for business. The future is coming quicker than we can anticipate. An inventory on a ruled A4-sized notebook – those days are history. We need more skills and in another decade the market will be filled with millions of jobs that we have absolutely no clue about. It is kind of scary, but it can also be exciting if you are ready to adapt and change according to the evolving environments all around you.

When there is a technological improvement or new methodologies of actions in place in a company, it will surely call for a better scale of operation and the employees should be well aware of it. The skills required and key roles will change invariably.

Cyber Security is one such area that will play a huge role in the effective handling of all these companies. With most of the data and information controlled and managed through the inter-connected IoT, it is easy for a rival to use the same as a scourge to create a huge ruckus. As technology finds its way higher up the ladder, there will be hackers aiming to bring it down as well. Security is a big issue, and all data should be safe. Count this as a synonymous industry that’s growing with IoT.

 

When it comes to supply chain management, most of the transactions happen online nowadays. Social Selling isn’t new, but it is really important for recruiters. Sales professionals will have to research their leads and candidates to build a good rapport with the system.  Like social selling, there are many foreseeable changes and things that can never be predicted galloping towards us.

 

The Future of Jobs in SCM

IoT, 3D printing and big analytics are already playing a key role in changing the dynamics of the Supply Chain Market. In the wake of ever-changing patterns in the market, what jobs can we expect?

The future of demand planning: It could be all about cloud-based planning systems. The real-time drill could be different from how they are before. Online transactions and algorithms will change the entire mechanics of demand planning. The demand planner can become a business creator.  At the transaction level, the executive will be able to prioritize, analyze and solve supply-demand balancing problems. The commercial impact will play a huge role.

Production Planning: A production planner of the yesteryear will have to collaborate with robots than be programmed in the wink of an eye. Thousand of working pathways can be simulated and all the permutations and combinations can be tested within seconds. The IoT equipped machinery is from the future and just being able to push a button or turn the handle or knob on time, are the skills that wouldn’t matter to anyone.  The production planner has to be an expert craftsman. There is no need to manufacture long runs of low unit costs, and it can effectively improve business and increase the company’s profit.

Logistics Management: To a large extent, it will all be about dealing with customer satisfaction. The options for planning on building a load, making a route map and checking customer’s availability will be quite easy. There will be plenty of options available, and analytics and automation will ensure that it happens on time. Logistics could become the next uber-cool thing of the future. Custom-packing, drones, and pods will change the entire landscape of the delivery of the goods. Customer satisfaction and directing these automated machines in the right course will be the future of logistics management. Numbers and combinations won’t be a problem. It’s all about becoming a Logistics director.

Resource utilization: It’s all about sustainability. Optimal consumption of the resources and sustainability are the marks of the future. The executives will require machine learning for optimal resource utilization. The Supply Chain leaders of the future will have to reinvent themselves.

All the Skills Needed:

  • Strategic Planning and Big Thinking incorporating IoT and AI
  • Technological expertise and ability to adapt and apply Analytics, Artificial Intelligence, Robotics and the IoT in the supply chain
  • Collaboration, networking and relationship management
  • Control Tower leadership and single-point management skills
  • Ability to learn, adapt and use technological resources
  • Risk management and mitigation
  • Data analytics and high-level decision making
  • The ability to work seamlessly across all boundaries of culture, geography, and trends
  • Ability to quickly improvise and read the current trends
  • Lean and business process re-engineering
  • Machine-learning

Role of Headhunters

Due to the tectonic shift in the market, there is an increased need to educate and constantly be aware of the technological advancements. Big Data, Telematics, Warehouse and Workforce Management, IoT, AI, and Robotics – there is quite a lot that’s happening and changing in the supply chain industry. To effectively be able to select candidates who are aware and knowledgeable of these changes can be a daunting task.

Specialist recruitment services can make a big difference here. For functions like IoT, IIOT 4.0, Connected Devices, Telematics, Warehouse Management Software, and Workforce Management Software, there are headhunters who can get the right manpower with adequate knowledge.

Role of Headhunters for Supply Chain

  • To find the right candidates who are aware of the growing changes in the market
  • To find manpower who are adept and equipped with machine learning
  • To spot the right talent according to the changing environments in the industry
  • Hire the right candidates according to varying requirements
  • Educating the candidates about the requirements of the company
  • Assess, monitor and prepare a talent pool
  • Increase in productivity for the company by right placement
  • Act as a resourceful bridge for the candidate and client

It can be a daunting task to have a set of people working and get them to learn the alphabets from A to Z. Instead of that, the headhunters help in readying the right talent for all jobs in the chain. No second thoughts whatsoever! Headhunters play the role of talent agents for corporate companies.

The changing Course

It is always about adapting to the conditions that keep on changing all around us. Someone with decades of experience won’t be able to survive if he is unaware of the technological shifts around him. Someone good at his job will not survive if he is not ready to learn. IoT and AI are going to take over the operational cycles, and as much as it is good for profit-making and error-free operations, it also calls for high levels of flexibility and adaptive approach from the employees. The world is changing fast and it is imperative to keep on running.

Headhunters play a major role without any doubt. It helps the candidates and employees get what they deserve, and act as a mediator. It directs both the parties in the right direction. For corporate clients, it’s about a painless selection process. For candidates, it’s about the right job! They act as a bridge. In a way, you can call them game-changers.

 

The Future of Headhunting in Supply-Chain Management

Supply Chain Recruiter

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Supply Chain Recruiter

 The supply chain management is the heart and soul of any company. Be it manufacturing or packaging or retail industry, supply chain is a critical component of every business. Every supply chain is a network of multiple related channels of operations like purchase, production, transport, warehouse, inventory, etc.

With ecommerce taking the market by storm, supply chain management is experiencing a shortage of skilled, talented manpower at all levels.The demand for supply chain managementexecutives is growing but specialised and experienced professionals are hard to find. In short, there is a dearth of accomplished and competent manpower in the supply chain management sector. To fill this gap it is essential that a proficient supply chain recruiter is engaged to hire such manpower.

Supply chain recruiters are not just head-hunters, they are analysts too. Supply chain recruiter must predict the supply chain market developments and source candidates matching the profile. Talent supply chain management recruiters must have a sound knowledge of the supply chain management process. They must be active, responsive and must possess thorough knowledge of the supply chain management process.

Requirements of a supply chain recruiter

  1. Process knowledge: A supply chain management recruiter must know the supply chain process on his backhand. Every supply chain is different. They differ in size, complexity and execution. Different supply chains require different proficiency of operations. A supply chain recruiter must recruit candidates not only on the basis of skills and qualifications but also on the basis of job quantum that the candidate has handled. For this, it is essential that the recruiter is well aware of the entire supply chain cycle and related channels associated with the supply chain.

 

  1. Assortment: Supply chain management requires manpower at all levels. From entry level workers to managerial positions, a single supply chain needs discrete individuals for carrying out different work. The man force at different levels need specific skills to run the supply chain smoothly. The supply chain recruiter must be able to source candidates at all levels from junior to senior ranks.

 

  1. Industry updates: With everything getting automated and majority of the tasks carried out by artificial intelligence or with the internet of things, it is necessary that the recruiters keep themselves abreast with the supply chain market developments. They should hire manpower that are tech savvy and trained in the latest technologies being used in the supply chain industry.

 

  1. Cost efficient: Supply chain costs can be a real burden on the business if the system is not strategically aligned. The recruiter must not only be efficient but he must also be cost effective. Due to scarcity of subject matter experts in the supply chain domain, the recruitment cost can upsurge if the jobplanning and allocation is not done properly. The supply chain recruiter must be able to identify the areas in the supply chain which require full time employees and which require part time employees and also areas that can be outsourced to a third party agency to reduce expenses.

 

The supply chain plays a decisive role in meeting the market demands and delivering the goods on time to the user in the right condition. The right candidate at the right place at the right time can make the right difference for your business. So, choose your supply chain recruiter wisely.

Digitization in supply chain management

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Digitization in supply chain management

Industries nowadays are becoming more transparent with regards to how their management is run and the supply chain is no exception.  Customers are also becoming more demanding for efficient delivery processes and are becoming choosy about the mode of accessing products. The advancement of digital technology has really been the driving force for these changes.

How to make a supply chain system more efficient?

It is quite a difficult task for companies to develop an efficient supply chain system. It is quite impossible for companies to develop a supply chain without a clear idea of the process and applications and a certain amount of strategic planning. The company should try to improve its systems based on their current business situation and also on the basis of evolving business ideas. These new and improved ideas should be implemented in all spheres of their business operations including (but not limited to) the below-mentioned avenues-

  1. Processes– The company need to implement these new and improved methodologies to connects the suppliers and the customers in a better manner. This will help in proper coordination and collaboration between these two important stakeholders.
  2. Performance management system– The company should necessarily set up some specific rules and regulations to enhance the performance of those who have the responsibility to manage the entire supply chain. All the important performance indicators should be measured timely to ensure better results and make the supply chain system more efficient.
  3. Developing the organizational skillsets– the company needs to understand various skills that are required to enhance the performance of the entire supply chain. These may include the skills of problem-solving by optimizing or managing the entire supply chain. This may require strong organisational support to promote relevant communication across different organisational user groups or programs. However, for extracting maximum benefits from such activities, the company has to develop its in-house talent and experiences. Then only it can ensure continuous development of new supply chain applications and processes.
  4. Enhancing stakeholder capabilities– In addition to enhancing the capabilities of their in-house resources, the company also needs to develop the capabilities of its partners and stakeholders. The supply chain just cannot achieve their set objectives of developing a well-oiled system without the help of their partners or the stakeholders such as suppliers, technology providers or even the distributors.
  5. In leveraging advanced technology– as already discussed, the company has to develop a road map for effective implementation of the new and advanced technologies into the supply chain. A few such operations include the integration of the information layer, analytics capabilities the database and the cloud.

 

When it comes to the supply chain industry, most of the companies are delivering their products to their customers through a standardised process. The marketing branch of the company places orders and the ordered products are prepared for distribution. At the same time, the respective customers are given the requisite information regarding their product and its shipment. It is necessary for the operation to take place smoothly so that the customers can expect their shipment on time. But, it does not happen as smoothly as desired, all the time and inadequate information is the ‘culprit’ for the same. For example, at times, the necessary data which is necessary for forecasting may remain insufficient. In some of the cases, the manufacturing branch of the company may not get sufficient help from the suppliers or other relative partners due to lack of timely information in critical links of the supply chain and there arises a gap between the operation process and the requirement. The whole supply chain is interrupted this way.

How can digitization help?

There can be many concrete examples of benefits brought about by digitization into a supply chain system. Enhancing productivity and growth of work are two broad benefits of digitizing the supply chain.

Given below are a few of the benefits digitization can bring to the supply chain management-

  1. In the process of capturing data-

The Internet of Things (IoT) is a boon of modern technology that is capable of making data available in a more transparent manner. Thanks to IoT, manufacturers are now able to gather data with the help of sensors. These data are essential for monitoring important supply chain assets. This results in lower downtime in data capturing and helps the company to manufacture products so as to meet the demands of their customers.

Data captured so efficiently brings transparency to transportation and logistics as well. Barcoded products manufactured by a company can be tracked by both the company and the customers alike. Moreover, internet of things has also enabled new tracker facility that can track not only the location but also can capture data regarding the temperature, orientation, humidity and other such variables that can cause a positive impact on the entire delivery system.

  1. In analysing data–

Digital concepts such as e-commerce are providing big data and it helps in the improvement of process management, product customization, market trend predictions, quality levels and customer personalization. For example, this new-found process of analysing data can help in providing new data routes for freshly observed patterns which, in turn, can identify more routes with fewer shortcomings.

  1. In integrating data–

The most significant contribution of digitization to supply chain is perhaps achieving higher levels of clarity at all stages of the process. Data is contained in different ‘blocks’. It is necessary to capture the required data, integrate them and then analyse them effectively in certain specified steps. The method of integration may involve the following steps depending upon conditions-

  • systems involved in integrated planning and its execution
  • advanced analytics
  • logistics visibility
  • smart procurement and the warehousing

Advanced features of digitization are employed in all these stages to bring the much-needed transparency into the supply chain.

  1. In accessing data–

The integrated units of any supply chain management depend on data accessed. These data need be transferred eventually to the end-customers. With the advent of digital technology, the data transferring process has also become quite easier. Now, the customers can keep track of their shipping experiences from their own comfort, thanks to features of digitization.

  1. In interpreting data–

If real-time data can be obtained, it proves to be very useful for any supply chain management. But, one of the major drawbacks here is the achieving of the desired accuracy level and reliability of data. Digitization has been of tremendous help here as it has offered the facility of correcting the data automatically and even enhancing reliability in supply chain technology.

  1. Comprehensive integration of solutions involved in the supply chain– as the supply chain is a vast territory, companies nowadays often vary in the planning or reporting of production related data. Digitizing the process of the supply chain is a great approach that removes many hurdles faced in all SCM systems down the line. But it requires a strategic approach for the digitization plan to be executed properly. If such a strategy is executed properly, there can be many benefits for the company and many inherent faults can be eliminated, which, if not eliminated, have the potential to deviate the processes from reaching the organisational goal. Digitization helps in setting certain benchmarks and fixing of organisational goals properly. Such integration helps the works to be accomplished in a proper manner. But, it is very important for the companies to keep a track on such integrated solutions and measure the performance at every stage, in order to avoid eventual failures.
  2. Helps in better handling of data- The Internet of things has reached its greater heights with time and, in recent times, has become an integral part of supply chain management. Better solutions to perennial supply chain issues have been possible now, thanks to IOT. Now, the supply chain can be digitized involving operations such as collecting of data, sorting and finally evaluating the data. As a result, it helps the managers or the planners of the company to make more effective planning ideas. Effective methods of data connection are also helping the managers or planners to deal with circumstances which used to plague the management a lot in earlier times. The IoT based technologies employed to supply chain involves a lot more detailing, and hence can save the management from critical situations happened earlier due to lack of attention to such details. Now, IoT based data handling methods enables the management to deal with all such issues and complex datasets in a more efficient manner.
  3. Helps in enhancing collaboration– Digitizing the entire supply chain may not prove to be an easy task at all. Of course, it involves hurdles and complexities while implementing it across the organisational spheres. But, it is more than worth doing so as through digitization, the planners can share the data within themselves and within the supply chain stream to ensure smooth functioning of the operational cycle. Digitization facilitates more interactions and such a collaborative approach can save the organisation from breakdowns or disruptions. A digitized supply chain actually works a kind of central hub that includes a lot of data which can be accessed through multiple nodes. Unlike the traditional system, no one has to wait for days or months to collect or gather the requisite data. Results can be obtained much faster, rather than waiting for months. Thus supply chain digitization can deliver proven benefits for the supply chain companies.

Steps or phases involved in digitizing the supply chain process-

One of the important ideas involved in digitizing a supply chain is to be clear about its sustained benefits and whether the existing SCM processes in the company are capable enough for implementing and integrating changes likely to facilitate by digitization. Therefore, any supply chain company may go through the following five major stages in the process of digitization-

  1. It should understand the present position of itself– the company should be able to assess its current position and the level of maturity it has attained with time. It should also be able to identify the areas that need further improvement and maturity.
  2. It should be able to define its strategies properly– The company should be able to set a target for the supply chain management well before the implementation of digitization starts. It should also envisage the possible strategies and planning involved in the process of digitization.
  3. It should develop a proper road-map – The company should be able to define the necessary steps required for digitization and sketch a detailed road map accordingly.
  4. It should develop small pilot applications with end to end scope– A company may devise some small pilot applications that can be helpful in digitizing the entire supply chain in due course. These pilots should be able to carry out the necessary steps within its scope, however small they may be. Such a pilot application will help in assessing the capabilities of the company for digitization. But, the company needs to keep in mind that such pilots should be used in integrating the digitization in supply chain only, rather than for fixing other organisational goals.
  5. The company should do rollouts and monitor their development– After successfully developing pilots, the company should do a few rollouts in certain segments. Then it should monitor the progress of these rollouts and assess which segments are benefitted the most from the digitization. This rollout can even be extended either to some important regions or particular customer segments as desired by the company management.

 

Assessment of maturity in the supply chain-

Most of the supply chain companies in the present day have successfully implemented certain levels of digitization in their operations. Before extending higher levels of digitization, it is very important for the companies to study its current maturity level in order to devise a specific plan for the next level of supply chain digitization. The maturity of a supply chain can be witnessed in four stages as discussed below-

  1. Digital novice– It indicates an immediate need for improvement to sustain in the business. Companies at this stage need to proceed further to the next level of supply chain digitization at the earliest.
  2. Vertical integrator– At this stage of digital maturity, the companies manage to integrate various processes of supply chain digitization into different departments or functions within their spheres of operations.
  3. Horizontal collaborator– The companies, at this stage of their maturity, have gathered required information that can help their supply chain partners to set up their goals and objectives. Such expertise and control help all stakeholders to carry out their processes easily and to bring the much-needed transparency into the entire supply chain operations.
  4. Digital champion– At this stage, the company has achieved the greatest level of digital expertise possible in association with its partners and has managed to be more transparent in their operations as well. This has been done by developing some beneficial digital processes and techniques and implementing them seamlessly in the entire supply chain management.

 

Some examples where digital technology has been helpful

A wide range of ideas of various technologies are mentioned below, which are integral parts of digitization. These have come to immense help to the industries.

 

  1. 3D printing – 3D printing is used in widely used in manufacturing these days. The scope of 3D printing in the field of pharmaceutical and healthcare logistics has enforced a dramatic change to the supply chain strategy involved therein. Many production industries like Johnson and Johnson, Invisalign etc have leveraged 3D printing technology into good effect and have excelled to greater heights of late. Other companies are also following suit and the concept is 3D printing is expected to grow even more in a foreseeable future.
  2. The fast growth of ‘Uberization’– When Uber first came into the market with its unique concept, it was not able to penetrate that much into the existing market share. But, with time, Uber has been able to leverage the technology disruptions to good effect and made distinct changes into their operations, to accommodate modern technology. It helped their operations so much that, in two years, the worldwide market share of Uber rose from 8% to 27 %.
  3. Internet of Things and machine learning – These technologies are among the most evolving technologies in modern times. These are being leveraged in the SCM industry to fulfil the needs of the digital supply chain for the future. These technologies offer various advantages related to costs, operational efficiency etc to the supply chain companies.
  4. Advantages of cloud computing– Cloud computing came to prominence after 2016. A cloud provides distinct advantages when a supply chain organisation wants to set a benchmark in its data acceptance level. It is because cloud computing enhances the computing power and application systems of a supply chain. A cloud computing framework also increases the efficiency of the software systems. But, its development requires a lot more time.

 

Digitization is nothing short of a revolution nowadays. Transforming everything to digital is challenging indeed. There are many avenues of digitization that may find a place in supply chain systems.  Advanced robotics, 3D printing, drones, internet of things etc fall under this category. But, it would have been better, if such technologies can be customised to some extent. Also, the capital involved in the maintenance of these technologies is still a concern for the companies.

Digitization in supply chain management

Top 10 Future Trends in Supply Chain and Logistics

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Top 10 Future Trends in Supply Chain and Logistics

From the first wheel in the Neolithic age to the modern automated driver less automobiles, the logistics segment is ever evolving. Wheel was definitely one of the greatest invention made by men after the invention of fire.  The invention of the wheel evolved transportation and has given rise to the modern day logistics industries and to the ever growing dimension of the supply chain management. Advanced technologies, globalisationand digitalisation of processes has resulted in immense metamorphosis of the supply chain cycle. Today, we shall discuss 10 future trends that will definitely make an impact on the supply chain segment in the coming years.

  1. Customer segmentation:Logistics industries have shifted from the traditional approach of segmenting customers on the basis of age, gender and occupations. The trends predict that customers must be now segmented on the basis of their purchasing and delivery needs and requirements.
  2. Risk Management: Reduction and mitigation of risks will remain a top priority for Supply chain managers. Legal requirements, risk screening and elevated diligence by interested parties have created immense pressure on the supply chain industry to prioritize risk management.
  3. Digitalization: The application of digital gadgets to redesign the supply chain management operations will remain a popular trend in the logistics industry. Reliability on automated digital applications minimises human intervention and error.
  4. Robotics: Widespread adaptation of advanced technologies, artificial intelligence and robotics will increase across the supply chain cycle. Robotic process automation or Artificial Intelligence allows the logistics companies to cut down on costs, eliminate errors and relieve the workforce from strenuous and repetitive physical tasks.
  5. Reverse Logistics: The supply chain industry has shifted from a linear supply chain to a circular supply chain. Used products are now sent back to the supplier for re-use via reverse logistics. This has brought about higher sustainability and increased customer loyalty in the supply chain industry.
  6. Real time inventory management: Sensors and POS machines can capture inventory at real time. This streamlines the supply chain process and reduces inventory hold time. When everything is tracked through internet sensors, it also minimises loss of products.
  7. Visibility and transparency: Futuristic supply chain leaders can incorporate better visibility into their supply chain process and create transparency to enhance the customer delivery experience. Transparency provides strategic foresight to the business and allows innovation with the suppliers.
  8. Real time tracking: Real time tracking of the cargo and transportation enables the manufacturing plant, warehouse and supplier to work in collaboration and plan their business needs accordingly.
  9. Block chain technology: With the ever expanding global economy, there is bound to be a resource scarcity at many levels. Logistics companies will utilisedecentralised block chain technology as an advanced alternative to substitute for the same. Block chain technology can be used to store records, manage expense statements and verifycustomers at the receiving end by storing their IDs through block chain technology.
  10. Data driven approach: Demand anticipation is now done on the basis of data analysis and not just market prediction. Predictive analysis backed up with data captured from the current buying trends in the market will provide deeper insights into the market demand and supply ratio.

The supply chain industry is highly competitive and fast paced. The wheel has to keep moving forward. Business leaders must plan in advance and apply these trends to keep ahead in the global market.

Top 10 Future Trends in Supply Chain and Logistics

Understanding the Relationship between Human Resource Management (HRM) on Supply Chain Management (SCM)

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Understanding the Relationship between Human Resource Management (HRM) on Supply Chain Management (SCM)

While supply chains have been playing a crucial role in several industries for many years, it is only in the past few years that supply chain management (SCM) has been treated as a separate strategic branch which can be improved to benefit businesses.

As soon as SCM started receiving its due importance, there began a search for the factors that affect supply chain and its functioning. While factors like inventory control, product design, industry standards, procedure costs, and distribution strategies were some of the few that were initially discovered to abundantly impact SCM, human resource management (HRM) is the latest to join the list.

While there have been a few studies done in the past to understand the impact of HRM on SCM, the research by the Department of Business Administration of University of Barcelona, Spain, clearly pointed out the relationship between the two.

The purpose of the study was to understand the impact of HRM on SCM which in turn also impacts organizational performance (OP) and customer satisfaction (CS), factors which play an important role between SCM outcomes (SCMO) and HRM.

The study used the previously validated structural equation model (SEM) which is based on five attributes including SCM implementation (SCMI), HRM, organizational performance, customer satisfaction, and SCMO. A survey was conducted on the basis of this model and 231 responses were recorded.

The study confirmed the significant impact that HRM, directly and indirectly, has on the SCMI and SCMO. Overall, the study suggests that successful implementation of SCM can not only help improve SCMO directly but it indirectly also increases OP and CS.

These findings make a very strong case for organizations to apply proven HRM practices to their supply chains to improve SCM to an extent where it starts functioning as a competitive edge. While businesses never thought of SCM as something that could be impacted by HRM, understanding the relationship between the two is simpler than it looks.

Working of a Supply Chain

If the complicated terminologies are sidestepped for a minute, supply chains are nothing but people. The entire chain is a group of organizations which work in downstream or upstream flows of services and products to deliver the final product to the customers.

This ‘group’ of organizations can be within a single company where delivery or supplies and production of products occur or can also be a very complex network of 3rd party suppliers, distributors, sales outlets and service providers. SCM aims to enhance the overall performance of the supply chain along with that of individual firms.

While several organizations have now started recognizing how important SCM is, most of them are yet to understand the fact that successful SCM relies on the people who are part of the supply chain. It is on the basis of the efficiency of the members of the supply chain that the supply chain would function.

There are already several studies that have confirmed that impact of HRM on the performance of the employees. The same practices can be adopted by the human resource department for the people who are part of the supply chain to improve their efficiency and performance.

From recruiting and selection, training and development, to compensation and incentive there are several practices in HRM that can be successfully used to improve the overall SCM.

If all of this is to be said in simple words, it basically means that the performance of the supply chain relies in the hands of people who are part of the chain and HRM is an efficient tool to improve the efficiency of the supply chain members and ultimately improve the supply chain and overall functioning of the organization.

 

Understanding the Relationship between Human Resource Management (HRM) on Supply Chain Management (SCM)

 

Improving Customer Satisfaction with HRM

While the positive impact on SCM through successful HRM practices is clear now, how the same can also help in improving customer satisfaction as the University of Barcelona study suggests?

This relationship too if pretty straightforward. Supply chains are only as strong as their weakest link. For instance, let us assume that you run a business in the USA and import products from China. You’ve selected an exporter and have successfully moved the products through customs and then to the distribution center sooner than expected.

But what if the distribution center delays the delivery to the customers? Your customers would surely be unhappy and this means that the supply chain of your company has failed. It is not difficult to understand that the retail industry relies mostly on customer satisfaction. In other words, the success of your supply chain has a deep relation with how happy your customers are.

So, you see there is an indirect relationship between HRM and CS too. With the help of successful HRM practices, you can improve your supply chain which in turn will help you improve customer satisfaction. There are a few time-proven ways in which supply chain can be improved for better CS. Some of them are-

  • Selecting the right transportation partners
  • Improving logistics planning
  • End-to-end supply chain analysis
  • Using technology for improving visibility and tracking inventory
  • Linking back-end and front-end deliveries
  • Measuring supply chain performance on a consistent basis

While all of these steps revolve around SCM, HRM is indirectly involved in implementing them and making sure that they deliver the expected results.

Conclusion

HRM was always considered a strategy of managing the workplace culture and environment. It is with the help of studies that its impact on other crucial business processes has come to light. With businesses now focusing on SCM to gain a competitive edge, improvements to HRM seems to be an efficient way to directly improve the supply chain and gain added benefits with respect to organizational performance and customer satisfaction.

With the rising competition across every industrial sector, businesses are now searching for innovative ways to improve their performance. Working on SCM is a new and effective way to not just bring more transparency to the business practices but also improve your reach through better customer satisfaction.

Even the traditional HR practices like recruitment and planning, training, and performance appraisal can be applied to the supply chain in order to attain larger benefits which would help organizations gain significant benefits over time.

 

 

 

The Similarities between Human Resource Management and Supply Chain Management

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The Similarities between Human Resource Management and Supply Chain Management

Human resource management is an effective management of the workforce in an organisation. This is the backbone of any business that gives it a competitive edge over others. The quality and productivity of the workforce determines the progress and sustainability of the business. A human resource management system is very similar to a supply chain management system because human resource management handles a chain of inter related departments with diverse job responsibilities working with an aim to achieve a common objective.

Recent times have noticed great developments in the supply chain industry in terms of automation, cost cutting, software aided operations, automated vehicles, etc. The introduction of these new concepts can be beneficial for the Human Resource department too. There is a lot that the human resource management system can imbibe from the supply chain management system.

Supply chain management system works on modularization. This means that the links within a supply chain management are commutable, interchangeable, compatible and exchangeable. The supply chain management system cannot allow any breakdown in the movement of goods and services. Similarly, the human resource management system must also incorporate the concept of modularization in their workforce. This will enable the human resource management system to ensure a continuous flow of workforce and prevent scarcity of manpower. Just as the demand for products is a regular affair so is the demand for talented manpower.

It has to be kept in mind though, that no matter what, humans and products cannot be equated in the same manner and so, the principles and metrics of supply chain management may not necessarily fit in to the human resource management system. The human resource management system will definitely hold its own defined techniques, procedure and practices. The modus operandi is bound to be different for both the systems. However there are certain common modularization practices that the human resource management system can incorporate in its operations:

  1. Outsourcing: Supply chain management involves a lot of channel or outsourced partners. Many HR functions can be outsourced too. Third party deployment can be done for security services, housekeeping, web development, etc. Even a part or all of the hiring requirements can be outsourced to job consultancies.

 

  1. Automation:

    Video Interviews or Interactive Voice Questionnaire can be used to select and filter candidates in the first round. This increases the efficiency of the operations, minimises biasness and saves time on the part of the recruiter. Automated mails can be used to notify candidates about job openings and also to share feedback of the interview to the candidates.

 

  1. Creating Human Inventory:

    Most job openings witness a large number of applicants compared to the number of vacancies. As a result, many good candidates are waitlisted for the next opening. These waitlisted candidates can be kept as reservoir or human inventory. A human inventory will consist of a pool of shortlisted applicants who are qualified and suitable for future openings. This minimises time and effort of the selection process.

The Similarities between Human Resource Management and Supply Chain Management

Every process is unique in its own way. We can derive many useful concepts for every process, be it supply chain or manufacturing. These concepts can be further modified and modulated into process specific approaches and used for overall growth of the business.

Supply Chain Gets Smart with Artificial Intelligence

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Supply Chain Gets Smart with Artificial Intelligence

Artificial Intelligence is truly revolutionizing every aspect of the world, from public institutions to private, affecting each and every industry. Logistics is no exception to the universal reach of AI. Therefore,  supply chain can overcome many of its risks and gaps by the applications of AI.

Artificial Intelligence is simply intelligence that is displayed by machines. The machines’ learning and action-based potential copies the autonomy unlike conventional process-oriented intelligence. In other words, AI is the simulation of human intelligence by computers. The 3Vs of big data or the core of AI is the ability to recognize volume, velocity, and variety. This in turn is used to find correlation among massive data.

Most experts categorise AI into two blocks-Augmentation and Automation. The former assists and aids human beings with their routine tasks while the later operates independently without having to rely on human intervention.

Supply Chain Adapting to AI

Back in 2010, a research predicted that supply chain management would gain immensely from the applications of artificial intelligence. The research suggested various ways in which this could happen-setting inventory safety levels, transportation network design, purchasing and supply management, etc. Thanks to the exponential growth of AI over the last decade, these things have been made possible.

The tools that AI offers in the sphere of logistics have been deemed to have huge potential for augmenting the top-line and bottom-line value. There are the 6 applications of artificial intelligence that supply chain management can foster:

  • Forecasts and Analysis

Any industry is highly dependent on the supply chain planning which forms an important part of the respective business’s supply chain strategy. Artificial intelligence steps in when it can enable forecasting within the inventory, or demand and supply. Additionally, machine learning can boost the agility and optimization of the decision-making involved in supply chain management.

With artificial intelligence, the SCM industry can come up with the best possible plan of action which is determined out of algorithm and machine-based analysis.

If a business sells sanitary equipment, it can use an AI based tool to predict the demand of each of their products on a daily basis. AI does so by analyzing the historical sales data of all the models and the data so delved into includes date and time of purchase, number of items purchased, and other information.

The machine learning tools can learn the peculiar trends in terms of seasonality, or type of product and it also considers factors like weather data and news events that might have affected the sales of a particular period.

  • Warehouse Execution System

A reliable warehouse and inventory management is one of the most significant aspects of supply chain planning. An industry-specific yet universal challenge that businesses incur is either overestimating or underestimating the required stock.

Artificial intelligence based algorithms and data have such a streamlined predictive capacity, that it can forecast supply and demand as mentioned before. This feature of AI can be applied to supply chain management for overcoming issues that lead to shortage or excess of inventory.

Another way in which AI can be used for this industry lies in using the tools of localization and mapping. Automated Guided Vehicles (AGVs) in warehouse management have had issues in the past but with a machine vision, AGVs can operate automated material handling in a traditional space like buildings.

In fact, Warehouse Execution System (WES) utilizes AI to make the supply chain systems more efficient.

  • Logistics and Shipping

In today’s day and age, customers and clients expect accurate and timely delivery. But that has pressurized the companies to the extent that they now look to better their shipping and logistics facilities. Companies indeed prefer to mark an improvement here because they benefit while making customers satisfied at the same time.

Artificial intelligence enables faster and more accurate shipping which lowers the transportation expenses. In the present context, AI has also allowed companies to turn to environmental friendly operations and reduce labour costs. The best examples have been set by Amazon and pizza delivery chains which have turned to AI based drones to deliver their products to their customers.

  • Choosing Suppliers

Profitable supplier selection and maintenance of a sound professional relationship with suppliers is yet another important work for businesses. With the advent of certain factors like sustainability, CSR and supply chain ethics playing a role in the decision making of supply chains, businesses have to choose the perfect supplier.

Even a slight complacent decision can snowball to reduction in goodwill and bad PR. Thankfully, AI and its almost magical use of intelligent algorithms has enabled firms to have access to supplier-related data. The companies can now check real-time data about their suppliers like history of operations, location, previous clients, etc.

  • Chatbots for Customer Satisfaction

Companies are always in dire need of a reliable but foolproof system of customer communication and correspondence, which can at times determine their reputation and rapport with their past, present and future clients. Customers often face forced waiting time for answering their queries or have to converse with people multiple times.

 

AI gives a solution to this problem by providing conversational interfaces (or chatbots) which could provide multiple advantages to businesses. To name a few, chatbots can reduce the cost of transactions, sales cycle time, as well as enhance customer loyalty. The chatbot response machine powered by AI has a multi-dimensional interface in which it considers factors like the context of the issue, the history, and customer response management.

 

  • Decipher Untapped Information

AI and Machine Learning have a versatile set of elements and one of them is used to convert foreign data in a standardized format. This element is called Natural Language Processing (NLP).

NLP is an immensely resourceful application for logistics. NLP navigates through data of customers, competitors, regulators and suppliers to find compelling answers for business needs. In fact NLP is versatile in itself as it can be utilized for speech recognition, question answering, reputation monitoring, ad placements, market intelligence, and regulatory compliance.

 

In the supply chain management sector, NLP is most useful in deciphering data that is in a different language, thus enabling companies to understand more about a foreign subject like a supplier.

Supply Chain Gets Smart with Artificial Intelligence

Evolving SCM with Artificial Intelligence

Artificial Intelligence has made its presence felt in a positive way across every sector and industry. The challenges faced by supply chain management strategies and operations are now dissolvable with the help of artificial intelligence and machine learning. The system and algorithms put forth by AI grows and evolves with every unit of data, making it more and more independent of human intervention whilst being as close to human behavior as possible. The future is right in the hands of those who utilise the wonders of artificial intelligence, and supply chain management can bag this opportunity.               

 

Reference Link Provided: https://medium.com/@KodiakRating/6-applications-of-artificial-intelligence-for-your-supply-chain-b82e1e7400c8

 

Reference Link Used:

https://www.researchgate.net/publication/247523024_Artificial_intelligence_in_supply_chain_management_Theory_and_applications

https://www.spendedge.com/blogs/5-ways-ai-can-enhance-supply-chain

https://www.techemergence.com/natural-language-processing-business-applications/

 

 

Supply Chain Gets Smart with Artificial Intelligence

by


Supply Chain Gets Smart with Artificial Intelligence

Artificial Intelligence is truly revolutionizing every aspect of the world, from public institutions to private, affecting each and every industry. Logistics is no exception to the universal reach of AI. Therefore,  supply chain can overcome many of its risks and gaps by the applications of AI.

Artificial Intelligence is simply intelligence that is displayed by machines. The machines’ learning and action-based potential copies the autonomy unlike conventional process-oriented intelligence. In other words, AI is the simulation of human intelligence by computers. The 3Vs of big data or the core of AI is the ability to recognize volume, velocity, and variety. This in turn is used to find correlation among massive data.

Most experts categorise AI into two blocks-Augmentation and Automation. The former assists and aids human beings with their routine tasks while the later operates independently without having to rely on human intervention.

Supply Chain Adapting to AI

Back in 2010, a research predicted that supply chain management would gain immensely from the applications of artificial intelligence. The research suggested various ways in which this could happen-setting inventory safety levels, transportation network design, purchasing and supply management, etc. Thanks to the exponential growth of AI over the last decade, these things have been made possible.

The tools that AI offers in the sphere of logistics have been deemed to have huge potential for augmenting the top-line and bottom-line value. There are the 6 applications of artificial intelligence that supply chain management can foster:

  • Forecasts and Analysis

Any industry is highly dependent on the supply chain planning which forms an important part of the respective business’s supply chain strategy. Artificial intelligence steps in when it can enable forecasting within the inventory, or demand and supply. Additionally, machine learning can boost the agility and optimization of the decision-making involved in supply chain management.

With artificial intelligence, the SCM industry can come up with the best possible plan of action which is determined out of algorithm and machine-based analysis.

If a business sells sanitary equipment, it can use an AI based tool to predict the demand of each of their products on a daily basis. AI does so by analyzing the historical sales data of all the models and the data so delved into includes date and time of purchase, number of items purchased, and other information.

The machine learning tools can learn the peculiar trends in terms of seasonality, or type of product and it also considers factors like weather data and news events that might have affected the sales of a particular period.

  • Warehouse Execution System

A reliable warehouse and inventory management is one of the most significant aspects of supply chain planning. An industry-specific yet universal challenge that businesses incur is either overestimating or underestimating the required stock.

Artificial intelligence based algorithms and data have such a streamlined predictive capacity, that it can forecast supply and demand as mentioned before. This feature of AI can be applied to supply chain management for overcoming issues that lead to shortage or excess of inventory.

Another way in which AI can be used for this industry lies in using the tools of localization and mapping. Automated Guided Vehicles (AGVs) in warehouse management have had issues in the past but with a machine vision, AGVs can operate automated material handling in a traditional space like buildings.

In fact, Warehouse Execution System (WES) utilizes AI to make the supply chain systems more efficient.

  • Logistics and Shipping

In today’s day and age, customers and clients expect accurate and timely delivery. But that has pressurized the companies to the extent that they now look to better their shipping and logistics facilities. Companies indeed prefer to mark an improvement here because they benefit while making customers satisfied at the same time.

Artificial intelligence enables faster and more accurate shipping which lowers the transportation expenses. In the present context, AI has also allowed companies to turn to environmental friendly operations and reduce labour costs. The best examples have been set by Amazon and pizza delivery chains which have turned to AI based drones to deliver their products to their customers.

  • Choosing Suppliers

Profitable supplier selection and maintenance of a sound professional relationship with suppliers is yet another important work for businesses. With the advent of certain factors like sustainability, CSR and supply chain ethics playing a role in the decision making of supply chains, businesses have to choose the perfect supplier.

Even a slight complacent decision can snowball to reduction in goodwill and bad PR. Thankfully, AI and its almost magical use of intelligent algorithms has enabled firms to have access to supplier-related data. The companies can now check real-time data about their suppliers like history of operations, location, previous clients, etc.

  • Chatbots for Customer Satisfaction

Companies are always in dire need of a reliable but foolproof system of customer communication and correspondence, which can at times determine their reputation and rapport with their past, present and future clients. Customers often face forced waiting time for answering their queries or have to converse with people multiple times.

 

AI gives a solution to this problem by providing conversational interfaces (or chatbots) which could provide multiple advantages to businesses. To name a few, chatbots can reduce the cost of transactions, sales cycle time, as well as enhance customer loyalty. The chatbot response machine powered by AI has a multi-dimensional interface in which it considers factors like the context of the issue, the history, and customer response management.

 

  • Decipher Untapped Information

AI and Machine Learning have a versatile set of elements and one of them is used to convert foreign data in a standardized format. This element is called Natural Language Processing (NLP).

NLP is an immensely resourceful application for logistics. NLP navigates through data of customers, competitors, regulators and suppliers to find compelling answers for business needs. In fact NLP is versatile in itself as it can be utilized for speech recognition, question answering, reputation monitoring, ad placements, market intelligence, and regulatory compliance.

 

In the supply chain management sector, NLP is most useful in deciphering data that is in a different language, thus enabling companies to understand more about a foreign subject like a supplier.

Supply Chain Gets Smart with Artificial Intelligence

Evolving SCM with Artificial Intelligence

Artificial Intelligence has made its presence felt in a positive way across every sector and industry. The challenges faced by supply chain management strategies and operations are now dissolvable with the help of artificial intelligence and machine learning. The system and algorithms put forth by AI grows and evolves with every unit of data, making it more and more independent of human intervention whilst being as close to human behavior as possible. The future is right in the hands of those who utilise the wonders of artificial intelligence, and supply chain management can bag this opportunity.               

 

Reference Link Provided: https://medium.com/@KodiakRating/6-applications-of-artificial-intelligence-for-your-supply-chain-b82e1e7400c8

 

Reference Link Used:

https://www.researchgate.net/publication/247523024_Artificial_intelligence_in_supply_chain_management_Theory_and_applications

https://www.spendedge.com/blogs/5-ways-ai-can-enhance-supply-chain

https://www.techemergence.com/natural-language-processing-business-applications/

 

 

10 Reasons Supply Chain Management Should Start Using Machine Learning

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10 Reasons Supply Chain Management Should Start Using Machine Learning

Businesses now and before have relied on intelligence gathering operations to assess the performance of the supply chain. The supply chain is a crucial element of business operations as it propels the factors that make a business stand out amongst its competitors. Therefore, the velocity and swiftness originate from how businesses adapt to the required changes in demand and supply.

However, despite the importance of logistics and procurement operations, few companies have been able to merge their supply chain in their processes. According to a survey, only 23% of procurement firms consider using supplier collaboration.

With inconsistencies in the procurement-supply chain dynamics, there are challenging outcomes like supply shortages or uncompetitive pricing, or even delivery delays.  But machine learning is changing supply chain management and solving the issues that the logistics industry faces today.

What is Machine Learning?

Machine learning is a technology by which computer systems can get learning based on some given data. Companies can use machine learning to come up with a good algorithm relevant to the market. Machine learning is different because it produces special algorithms, which unlike traditional algorithms learn from the market factors.

Another special feature of machine learning is the least human intervention in computer systems. It is a progressive tool in which, with every addition of data in the data bank the system becomes more intelligent. This feature helps the data to be interpreted and makes it more manageable.

Machine learning can also be incorporated with big data sources like digital markets and social media. This enables companies to use data signals from other sites that consumers generate.

The Ways in Which Machine Learning is Changing the Logistics Industry

  1. Reducing the time that is wasted on repetitive functions

Those involved in the supply chain process are aware of the wasted time on repetitive tasks. Machine learning allows a business to carry out better quality control tasks with a fraction of the time spent via manual methods.

Thus, machine learning is effective at automated quality inspections.  Machine learning algorithms can determine if a product is damaged. These algorithms even suggest the most appropriate corrective action to repair products and assets.

 

  1. Informed Forecasts based on Empirical Evidence

 Machine learning enabled systems can interpret data from supply chain operations. This makes the system make an informed guess or forecast on the upcoming performances based on these past pieces of evidence. The algorithms created by machine learning learn from all the past data. This can be revolutionary in terms of predictive analytics for supply chain management strategies and help them shape their decision-making plans.

 

  1. Automated Alerts to Avoid or Mitigate Crisis

Any company that has to deal with supply chain management has to follow a set of protocols for its operations to be foolproof. But in case of any crisis in the functioning, companies depend on many experts of the field to review existing protocols and blueprints in order to fix the point of failure.

Once it is found what the point of failure is, companies have to make a range of decisions to resume production back to normal. Machine learning is useful in this situation because instead of asking people for help, turning to powerful algorithms that give insights, warnings and automated recommendations is a better deal.

 

  1. Monitoring Supplies through Natural Language Processing

Natural language processing enables ease in supply chain management. It monitors overseas suppliers by collecting news about them from all over the world and translating it into the preferred language.

This aspect of machine learning allows a system to understand and interpret human colloquies like social media engagements, publications or any other data. It empowers executives to monitor their vendors across borders in the realm of supply chain management.

  1. Judicially Improving Delivery Performance

Machine learning combines the positives of unsupervised learning, supervised learning and reinforcement learning to find all the catalysts that affect supply chain management. Not just that, it does all of this by reducing product costs and appropriating processes that mitigate any risks in operations.

10 Reasons Supply Chain Management Should Start Using Machine Learning

  1. Consumer Engagement

Through machine learning algorithm, businesses can personalize solutions by automating customer services. Chatbots are one such consequence. Through a tailored algorithm, one can create a bot that deals with supplier queries and concerns. These bots reduce the amount of required manpower.

An efficient interactive communication channel can help businesses in tracking worldwide suppliers, manufacturing unit staff, warehouse distribution, and transportation towards retailers. It is important to let go of the myth that chatbots are not intelligent; their smartness depends upon the people that create them.

 

  1. Predictive Analysis for New Products

Machine learning can be a boon if businesses want to drive up the sales of new products. Algorithms created by artificial intelligence can be so sincere that they can apply practical approaches of asking partners, coming in contact with direct or indirect sales teams. These manoeuvres can help companies to know how much of a new product or service they will be selling.

What machine learning does in this respect is that it considers all the causal factors that can influence demand (which have not been pointed out before). This can help in proper supply management of a new product.

  1. Supplier-Specific Data

One of the key functions machine learning based algorithms can perform is to improve the supplier quality management. It does so by tracking or tracing all data pertaining to the particular supplier and then finds patterns in the quality levels of the supplier.

It does all this in isolation and is unassisted. Machine learning systems can independently chalk out product hierarchies. Finally, the systems can also save many manual hours as it organizes track-and-trace reporting.

  1. Assessing Equipment Performance

Every business that uses machinery and equipment wants to reduce long-term costs by being able to reduce the depreciation rate of its assets. They try to extend the lifespan of their fundamental assets involved in supply chain management. These assets can be machinery, engines, or warehouse equipment.

Machine learning plays a role here as well.  It analyses machine-driven data to find out what factors influence the efficiency (or a lack of) in machinery.

  1. Comprehensive Operations: End-to-End Visibility

Machine learning’s biggest advantage is that it functions from the beginning to the end. In logistics, it begins its work even before the data has to process. First, it can disaggregate all the data by removing unnecessary data. Next, it estimates the volume that may be in demand. Furthermore, it estimates dimensions as well by applying industry-specific standards and all business rules and protocols. Finally, it predicts any gaps in the operations based on historical data.

In the terminology of those involved in machine learning systems, this is a 3D loading visualisation.

Conclusion

The human touch in technology is revolutionizing everything around it. To understand, think of Leonardo da Vinci-he was an expert in mathematics, biological and evolutionary sciences, philosophy and physics, fine arts and critical thinking all at once. Machine learning is the Da Vinci of the logistics industry.

Supply chain management and the greater industry of logistics can benefit from machine learning. As per Harvard Business Review, as of the first quarter of 2018, only a mere 7% of all companies are using Artificial Intelligence to automate their operations.

But machine learning gives quantifiable results. It reduces the time wasted on manual labour functions, allows businesses to make better decisions based on empirical data, and even sends important precautions and alerts. But the beauty of machine learning is that it does not stop there. It recommends the solutions to avoid a crisis, helps monitor suppliers across the world and across various lines of industries.

Therefore, machine learning simplifies the intricate operations of supply chain management systems by optimizing the very operations and functions prone to faults. Machine learning is not the future, it is the present.

10 Reasons Supply Chain Management Should Start Using Machine Learning