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Weathering the Storm with a Digitally Managed Supply Chain
July 8, 2020 Blog


In 2016, Elon Musk famously promised to deliver 500,000 Tesla Model 3 units in two years – and the ambitious claim was met with universal scepticism, though not without reason. In the tech entrepreneur’s words, “This supply chain stuff is really tricky”, as proven when the electric automobile manufacturer met just over half its target at the end of 2018.

Musk’s supply chain struggles ring true, especially now. The COVID-19 outbreak has revealed the tangled interconnectedness of global supply chains which have been disrupted significantly by supply shortages and industrial closures across the world. Even as China shows signs of recovery, suppliers and logistics channels struggle to resume production as other countries work to flatten the curve, creating bottlenecks across supply chain networks.

In the face of change, supply chain executives are struggling to adapt – over 85% of Chief Supply Chain Officers (CSCO) state that it is immensely difficult to pre-empt and proactively manage such disruptions1. CSCOs face the following obstacles before they can craft a response to mitigate the impact:

  • Visibility – 84% of CSCOs say that “lack of visibility” across their supply chain is the “biggest challenge” they face now1.
  • Escalating customer demands – Customers expect information, personalised services and better products to be made available to them faster and at cheaper prices.
  • Controlling costs – Spikes to necessary expenses are becoming more common and have adverse effects on a company’s bottom line.

To address these challenges, organisations need to reimagine their global supply chain strategies and align them with changing business objectives. In order to position themselves for increased competitiveness, it is crucial for CSCOs to embrace digital innovation and modernise supply chains for more agility, strength and sustainability.

Leading supply chain organisations have done this by integrating data and technologies such as AI and blockchain to build smarter, more responsive supply chains. In one example, a global leader in logistics services was able to scale up its EDI service levels for customers and have the system online in days instead of weeks – 90% faster than initially possible1. This not only helps businesses through the ongoing crisis, but prepares them for improved outcomes and operational cost reductions during future unprecedented events.

Digitally managed supply chains allow businesses to:

  • Operate more efficiently
  • Gain complete visibility in the supply chain
  • Avoid costly disruptions
  • Improve customer and partner relationships
  • Enable actionable insights
  • Make better decisions driven by data

Adopting new technologies introduces even more data to be processed and managed, which means that choosing the right platform and partnering with a vendor with the expertise to support your transition can ease the process. With this challenge in mind, IBM designed the Watson Supply Chain Fast Start programme to help businesses accelerate their transformation towards a smarter supply chain.

The programme is ideal for CSCOs who want to understand how to incorporate new technologies and the problems they can solve. It leverages tools such as digital twins, which are virtual replicas of your supply chain that can simulate virtually a wide range of outcomes, and the construction of a central hub from which you can make AI-supported decisions while maintaining full operational visibility.

To find out how you can infuse AI for increased efficiency and visibility, you can read this in-depth IBM report on how to digitally perfect your supply chain. Click here to download.