Events brought on by the pandemic, such as movement restrictions, supply shortages, panic buying, closure of major international ports and skyrocketing shipping container prices, have put significant pressure on global and local supply chains. These events have presented a whole set of new challenges for organisations in terms of how they can meet the needs of consumers.
Even as we journey toward what appears to be the latter stages of the pandemic, India’s supply chain continues to face significant challenges. The global semiconductor shortage hit the sales of passenger vehicles in September, and several automotive players in India said that their sales were affected due to a shortage of electronic components. A few months back, it was the pharmaceutical industry that witnessed a supply chain shock due to the overdependence on one country for raw materials.
To protect the economy from similar supply chain disruptions, the Indian Government along with the Governments of Japan and Australia formally launched the ‘Supply Chain Resilience’ initiative in a trilateral ministerial meeting held virtually this year. The trade ministers of the respective governments decided to take a series of initiatives to strengthen the resilience of their supply chains. Among other measures, the recommended possible policy measures included sharing of best practices on supply chain resilience, supporting the enhanced utilization of digital technology and supporting trade and investment diversification.
As one can see, digital technology is and will remain a major contributor to supply chain resilience. Digital technology is imperative to building a strong supply chain network that can withstand disruptions however, it’s important to invest in the right technology. Every organisation should invest in systems and solutions that integrate with the broader ecosystem; operating in isolation is no longer a viable route for long-term success.
The information must flow smoothly and securely between employees, business departments, and extended business networks. Without the right technology at the core, organisations increase the likelihood of negatively impacting collaboration amongst employees, transparency with partners, and ultimately the smooth operation of the entire supply chain.
Characteristics of the Modern Supply Chain
As the modern supply chain incorporates more organisations across a broader geographic footprint than ever before, it becomes increasingly complex. For this reason, supply chain participants need to collaborate. Failure to do so can prove costly and disruptive, seeing materials go to waste, longer order-to-delivery cycle times, inaccurate shipments, impacts on quality of service and so on. This is where the need for a connected and resilient supply chain comes in.
The pandemic and its effects have tested supply chains across the globe, perhaps more than at any other time in history, and the ones that have proved strongest and most resilient are those that have been able to pivot at a moment’s notice. This feat is achieved by collaborating effectively through technology. Modern technologies such as the cloud, Internet of Things (IoT), big data, etc. must be embraced and connected at all levels to make this a reality.
The Next Level: Accelerate Digital Transformation
To take it to the next level and build true resilience, organisations need to accelerate their digital transformation initiatives so their supply chain ecosystems can integrate data analytics, transactional content, and cybersecurity, while providing robust activity reporting, content creation and receiving capabilities and dashboards. Additionally, the use of artificial intelligence (AI) and analytics is now a key enabler for Indian manufacturers as they seek to better align operations that will meet the needs of customers. These innovations also give them the flexibility they need to respond to unforeseen events, quickly change their business model and adapt to new demands.
To protect the economy from similar supply chain disruptions, the Indian Government along with the Governments of Japan and Australia formally launched the ‘Supply Chain Resilience’ initiative in a trilateral ministerial meeting held virtually this year
Emerging technologies are at the heart of the fourth industrial revolution. AI and data analytics are transforming the speed at which manufacturers are creating products by using past data to recognise which methods work most efficiently. In India, many organisations are embracing these emerging technologies to drive growth. It is common to see Indian organisations use AI-based solutions to improve product quality and design. Many Indian manufacturers are also using AI for predictive maintenance of machines that help in addressing issues before they can cause downtime.
Importance of Ethically Driven Consumer and its Impact on Supply Chains
While technology facilitates collaboration and transparency in the supply chain, it also increases transparency for consumers, which is increasingly important for today’s environmentally conscious and socially responsible consumers. New research from OpenText has revealed that consumers place a high value on buying from ethical brands. A massive 94% of Indian respondents in the research were willing to pay more if they were sure that a product was ethically sourced or produced. Almost two thirds (65%) were willing to pay a premium of more than 25% for that product while 35% were happy to pay 50% more. The survey also showed that close to a third (29%) of Indian consumers would never buy from a brand again if it was accused of working with unethical suppliers. Instead, they would look to find an alternative brand that engages in responsible sourcing.
This new data – from a survey of 6,000 Indian respondents – highlights the importance for brands in proactively ensuring all suppliers in their supply chain operate ethically. To meet these needs, Indian manufacturers need to invest in technology that allows them to share data in real-time and gives them clear visibility into partner performance, practices, and certifications – making it easier to establish and operate an ethical supply chain and appealing to the demands of today’s consumer.
While some manufacturers are still plodding along with their digital transformation efforts, it is evident that many others are recognising this opportunity and using emerging technologies to accelerate progress. The combination of IoT, AI and data analytics will provide organisations with access to intelligent supply chain data that will measure and analyse activities within the organisation and with downstream partners. Not only will this ensure an efficient and resilient supply chain, but it will also deliver maximum transparency into the working practices of supply chain partners and allow organisations to earn customer loyalty by demonstrating their entire supply chain operates ethically.