Global supply chains are getting bigger and more complex. As a result, companies are facing added pressure to respond effectively to fluctuating demands and unexpected change. Add in more frequent supply disruptions, managing product life cycles, and increased regulatory controls, and it’s no wonder it’s getting more difficult to protect the bottom line. So how can businesses profitably keep pace with the challenges of today? The answer is increased end-to-end supply chain agility.
What is the Sensing + Intelligent + Social Supply Chain?
Reducing lag time in decision making is critical. To achieve success, organizations need to connect data, processes and people across the entire network. Until that happens, demand translation and response will be cumbersome and slow. Competing metrics need to be visible, and actionable insights easily accessible. That is the heart of what a Sensing + Intelligent + Social Supply Chain addresses. Its hallmark characteristics are:
- Sensing—alerting decision makers when an unexpected supply chain event occurs, and identifying impacts on other parts of the network.
- Intelligence—providing rapid understanding of business issues and consequences, and allowing tradeoff analysis of multiple alternatives by comparing metrics side-by-side.
- Social—bringing the right people together in a collaborative environment to share assumptions, vote on alternatives, and discuss opportunities.
A Sensing + Intelligent + Social Supply Chain isn’t just about short-term reactions. It’s about overall responsiveness. It means making informed decisions quickly, with corporate objectives, not individual metrics, in mind.
While this ability to know sooner and act faster is most apparent in day-to-day operations, it extends across time horizons, geographical locations, and scale. Decision making becomes more agile, leading to a repeatable and stable supply chain. A Sensing + Intelligent + Social Supply Chain absorbs information across functional and organization boundaries, understands the significance of it, and brings the right people together to make decisions.
Information from current enterprise systems is rarely complete, and seldom entirely accurate. Insights gleaned from that information is limited by data quality and the imperfections of mathematical models used to draw conclusions. What’s more, companies are dealing with departments that often have conflicting objectives. As a result, efforts to optimize a single operation may lead to functional excellence, but won’t lead to improvements in overall corporate performance.
— R Ray Wang (王瑞光) (@rwang0) September 11, 2016
Key Elements of the Sensing + Intelligent + Social Supply Chain
The key elements of a Sensing + Intelligent + Social Supply Chain are:
- The ability to absorb more data with less effort.
- The ability to automate decision making as appropriate.
- The ability to simulate scenarios to identify consequences.
When those three things happen, decisions can be made in support of corporate-wide objectives. Silos will topple, planning cycles will be reduced, and these informed decisions will lead to improved end-to-end supply chain agility.
It’s important to note there is still a need for crucial functionality like demand and inventory planning. But there is also a tremendous need for collaboration in order to evaluate tradeoffs while keeping in mind what’s best for the business. This type of analysis cannot be done through automation alone. There are too many subtleties and soft constraints only human judgment can accurately take into account.
Taking the first steps toward a Sensing + Intelligent + Social Supply Chain means creating a harmonious data set representing the entire end-to-end supply chain, enabling cross-functional collaborative decision making, and identify and analyzing consequences. All that combined will enable the best possible response to an unexpected supply chain event.
So what is the Sensing + Intelligent + Social Supply Chain? It’s the future.