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Supply chain disruption: how can real time data and insights help?

Ashish K. Gupta, Chief Growth Officer & Head of Business, Europe and Africa, HCLTech

Since 2020 organisations have been plagued by one global supply chain disruption after another. This has exposed the fragility of the complex system that supports world trade. A combination of factors – including Covid shutdowns, global supply chain problems, the Russia-Ukraine conflict, fuel costs and fresh Covid-19 restrictions in China – have exacerbated an already bleak supply chain situation, causing new risks and stress. 

Disruptions continued in 2021 but, despite these, global trade reached a record high in value, according to the UN Conference on Trade and Development.

Supply chains have traditionally been fragmented, globally dispersed and susceptible to concentration risks which, as Covid taught us, have not been captured by most companies. Add in multiple partners and providers and inconsistent cross-border regulations, then the task of creating a strong and reliable supply chain looks near to impossible.

New supply chain risks and stress

According to research by JP Morgan, the risks to supply chains include a rebound in US port congestion, spillover from the Russia-Ukraine conflict affecting northern European ports, limitations on air freight particularly in the Asia-Europe lane, and disruptions to rail freight, including the track between China and Europe.

Supply chain complexity can wreak havoc on costs, risk, reliability, customer satisfaction and the ability to implement change. With consumers continuing to expect more choices – delivered faster, cheaper, and sustainably – disruptions have forced organisations to explore new concepts. The traditional approach to transformation fails to balance these priorities.

Tech investment

More significantly, many supply chains are not yet influenced by technology. Sure, systems help companies manage warehouses and transport. But the complexity and diversity of supply chains still runs ahead of the technology systems that can underpin supply chain environments. 

According to Gartner, more than 50 per cent of supply chain leaders expect complexity to increase over the next five years. For most customers the answer will be the targeted use of technology.

If supply chain organisations focus on end to end views, underpinned by real time data and analytics, they can vastly reduce the chance of disruption. By using AI and advanced forecasting, it is possible to create scenarios, predict disruptions and design mitigations. 

Sixty-eight per cent of companies stated that planning, forecasting, and inventory management were the most important areas for technology investment. Fifty-three per cent said end to end supply chain management and AI technology was critical. Emerging technologies will improve planning and decision-making by chief supply chain officers.

Analytics and real-time decision making

Supply chain analytics synchronise data from multiple sources to improve decision-making by supply chain managers. AI, blockchain, hyper automation and graph analytics will generate accurate and useful predictions to be embedded into workflows.

Organisations are under pressure to capture real-time data and use it to make decisions faster. The future reliability of supply chains depends on how quickly companies can improve their data capabilities and analytics. 

Resilience in action

Building a resilient supply chain is a never ending  process. The risks, complexities and hyper-connectedness of global chains evolve constantly. Risks cannot be avoided but can be minimised. All businesses should have continuity plans to aid recovery in the event of critical disruption.

Tools including resilience indexes, risk visualisation and supply chain simulations can help companies understand the complexity of supply chain risks, meaning that they are more likely to bounce back from adversity.

* HCLTech’s views are separate from other premium members, the FT and the FT Tech for Growth Forum

Overcoming supply chain issues

Che Min Tu, Senior Vice-President for Group Operations, Lenovo

The supply chain disruption that has affected nearly all businesses in the past few years is entirely due to external factors. Covid led to a series of first-time challenges. There was a drastic decline in freight and passenger flights, which account for more than half of all air cargo. International business has been forced to work around local restrictions in many countries, all the while coping with reduced product and workforce availability. 

While many sectors are largely back to normal, industries have had to change how they work, which has caused logistical disruption.

Geopolitical factors have added to supply chain problems. Sanctions have made it harder for businesses to source materials. This has led to logistical snags, especially with complex products such as technology devices, which require parts from various locations.

Solving supply chain issues

It is vital that companies treat suppliers as an extension of their own businesses. Closer working can lead to greater understanding of the entire supply chain, and businesses can then prepare for issues that may arise. At Lenovo, we have implemented an end to end business management solution to aid collaboration.

Digitisation will be the difference between supply chains succeeding or failing. The right technologies will help connect the different parts of the chain, and this will improve quality control. The introduction of technology – including the IoT, augmented and virtual reality – will allow remote site management. Intelligent solutions will enable businesses to get customer feedback in real time, which will in turn improve process management and decision-making. 

All of this starts with people. By caring for and investing in talent, businesses can adapt and react to issues that arise and keep customers and partners happy.

Looking to the future

As supply chains evolve, companies must ensure that sustainability is front of mind. Customers want businesses to be greener and these efforts cannot be allowed to slip, even to meet immediate demands. By opening manufacturing sites in different areas, companies can reduce their distribution footprint. 

Many businesses have said they will aim for net-zero emissions. Lenovo has aligned with the Science Based Targets initiative to work towards the goals set in the Paris Agreement of 2015. Our vision is to provide smarter technology to help build a brighter, more sustainable future.

Our supply chain mission will also deliver a customer experience that is profitable and sustainable. We aim to attract and invest in the best talent and create the highest-quality smart technology products and services.

* Lenovo’s views are separate from other premium members, the FT and the FT Tech for Growth Forum