Wednesday, November 30, 2022

A New Route to Avoid Supply Chain Disruption

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Global supply chain disruption costs the average large business $182m a year. But the disruption is not caused by a lack of data – which is why the much-hyped Internet of Things (IoT) has not proved to be the answer to the problem.

More than 10 billion IoT devices around the world are constantly adding data to already overflowing data stores. Yet global supply chain disruption persists. The real answer lies in creating effective connections between numerous stakeholders performing a range of functions, across multiple enterprise platforms, and in different jurisdictions.

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Achieving visibility in parts of the supply chain that involve goods moving between physical locations and stakeholders is difficult due to the number of independent organizations involved. It is comparatively simple to digitize a factory – with everything under one roof and controlled by one organization. But an entire global supply chain is a very different matter. Mobile devices enable single stakeholders to track and monitor outside their respective domains.  However, the cost of such devices is prohibitive, and they present operational challenges, such as maintenance and retrieval.

The data to achieve the granular visibility required is present across the supply chain today. However, data is fragmented across many siloed systems, each owned, operated, and controlled by many independent organizations. The real challenge is twofold – how can this data be captured and combined while maintaining privacy between the respective organizations; and how can very different data be brought together in a way that can deliver the coherent visibility required?

New data mesh technology has provided the breakthrough. Data mesh is based on distributed architecture for analytical data management and enables end users to easily access and query data where it lives – without first transporting it to a data lake or data warehouse.

In practice, this means data from multiple supply chain systems can be captured and combined to create a ‘digital twin’ of a consignment – providing a single data product from which all stakeholders can get the visibility they need. Leveraging data across the supply chain enables a much fuller picture to be achieved at a granular level. Using data from existing systems used in the day-to-day running of the respective organizations means the data is of high quality, can be trusted, and the systems are well maintained.

Intelligent data orchestration is then the secret of success for the supply chain. Just like in a traditional orchestra, a ‘conductor’ takes centre stage and synchronizes all the various data inputs. Each separate system communicates directly and only to the conductor platform – removing the need for numerous discrete connections and maintaining data integrity. As each digital twin is created, proprietary algorithms define and assign policies to it to ensure only relevant data is captured from each connected system.

Data from order management and transport management systems is combined with more real-time data sources from other systems present across the supply chain. For example, consignment and inventory data can be combined with transport schedules and allocated transport. The telematics system of the associated transport vehicle provides real-time location and condition data from the consignment which, when combined with analytics, generates detailed consignment lifecycle records, capturing key events throughout. These events can be communicated across the supply chain, improving communication, and paving the way to automation of processes.

The increasing complexity of supply chains is making optimisation more challenging than ever, while the cost of inefficiencies is growing. Research suggests that businesses with optimal supply chains can halve their inventory holdings, reduce their supply chain costs by 15% and triple the speed of their cash-to-cash cycle. Data mesh and intelligent data orchestration are now providing a new route to unlock supply chain value and deliver competitive advantage.

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