Over the past year, global supply chains have faced relentless disruptions across multiple fronts, writes Matt Gregory (pictured), Managing Director Northern Europe, Körber Supply Chain Software. Geopolitical tensions, including the prolonged U.S.-China trade disputes, have intensified pressure on supply networks. Meanwhile, natural disasters like Hurricane Helene and Milton have severely impacted transportation and logistics across the U.S. Compounding these issues, the residual effects of the pandemic and evolving health protocols continue to disrupt global shipping and exports, creating delays and unpredictability.
According to findings from Resilinc, overall disruptions in the first half of 2024 increased 30% over the first half of 2023. These combined challenges have exposed weaknesses in supply chains, demanding a more resilient and adaptive approach moving forward. As operational disruptions become more frequent and severe, integrating advanced technologies such as digital twins, IoT and predictive analytics can help companies anticipate, prepare for and adapt to these challenges. By leveraging these innovative tools, businesses can not only mitigate risks but also secure future growth and stability in an increasingly uncertain environment.
Adapting to Thrive
One key technology driving challenge mitigation is a digital twin. A digital twin is a virtual model that mirrors real-world processes, allowing companies to simulate everything from production schedules to transportation status and inventory levels. By doing so, it enables more informed decision-making, optimizing operations and improving overall efficiency. Digital twins also support predictive maintenance by continuously monitoring equipment performance. This proactive approach helps businesses prevent failures and minimize downtime. Moreover, real-time insights from digital twins allow companies to identify inefficiencies within the supply chain and respond swiftly to emerging issues.
Leading companies like Mars and Michelin have successfully integrated digital twin technology. Mars uses it to oversee production processes, preventing overfilling in factories, while Michelin leveraged 80,000 simulations for strategic sourcing, saving €10 million annually in logistics and boosting profit margins by 5%. By investing in digital twins and other technologies that provide real-time data and predictive capabilities, businesses can shift from reactive to proactive supply chain management. This not only builds resilience against disruptions but also prepares organizations to face future challenges with greater agility.
End-to-End Visibility
Achieving end-to-end visibility across supply chains allows businesses to track and monitor every step of the process in real time. With a clear view of operations, companies can make faster, more informed decisions that not only reduce risk but also lead to greater efficiency. This visibility supports cost management and fosters stronger relationships with partners, all while improving the overall customer experience.
IoT technology has become a critical tool for boosting visibility across supply chains. Through the enablement of real-time tracking, devices provide key insights into the movement and condition of goods, allowing businesses to quickly identify and resolve issues such as delays or quality concerns. This proactive approach ensures smoother operations and keeps the supply chain running seamlessly. In the case of extreme weather causing supply chain disruptions, companies with IoT-enabled tracking systems can re-route shipments in real time, minimising delays and maintaining customer satisfaction.
This level of visibility not only improves operational efficiency, but also enhances the overall resilience of the supply chain by enabling rapid response to unforeseen events. By harnessing IoT, organisations can make smarter, data-driven decisions that optimise not only their performance but also reduce vulnerabilities.
Predictive Analytics
Predictive analytics, powered by AI, is revolutionising supply chain management by enabling companies to anticipate demand and potential disruptions more accurately. This provides enhanced visibility and performance monitoring, allowing businesses to make data-driven decisions that align with their goals. By applying these insights, companies can gain a proactive edge, to help make informed decisions that can optimise their entire supply chain. For example, predictive analytics can forecast demand shifts, enabling businesses to adjust their inventory levels, reduce overstocking and avoid shortages. This can also optimise transportation routes or planned maintenance for equipment before failures occur, reducing downtime and inefficiencies.
The benefits of using predictive analytics across supply chains are endless. This can improve operational agility, allowing companies to respond faster to changes in market conditions, customer demand, or unforeseen disruptions. In addition, this helps businesses lower costs by reducing waste and improving resource allocation, which results in enhanced overall performance. Ultimately, this leads to a more resilient supply chain capable of not only managing risks but also capitalising on new opportunities and driving long-term success.
Looking Ahead
In a world increasingly defined by supply chain disruptions, technology integration is essential for building resilience. Digital twins, IoT and predictive analytics are powerful tools to help organisations maintain end-to-end visibility, enhance decision-making and respond proactively to challenges. By investing in these technologies, companies can strengthen their supply chains and achieve better resilience to meet demands and prepare for future uncertainties.
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