Supply chains can be extremely complex and difficult to manage. Bringing digital into the mix and automating key processes is often a real help, or even essential. This can be achieved incrementally, said Jeff Engelmann, vice president of marketing at supply chain platform provider Slync, when we spoke to him about automating the supply chain, and roles AI and blockchain have to play.
Internet of Business: A report by McKinsey from last year said the supply chain is only 43 percent digital. Why do you think businesses don’t make it more of a priority?
Jeff Engelmann: “Many organisations share a misconception that a digital transformation project needs to happen all at once, which is why many are slow to adopt. The reality is, businesses have the most success when they start small and focus automation efforts in an area that is either considered low-hanging fruit or needs technology the most.
“This incremental approach gives businesses the chance to find a place to start, and then extend to broader digitisation initiatives to achieve the benefits that the leaders in supply chain digitisation are achieving.
“As evidenced by promising adoption rates, businesses are increasingly realising the significance of investing in digitisation. According to KPMG, the automation market is expected to reach $232 billion in 2025 compared to $12.4 billion this year, and 40 percent of companies surveyed reported they’d increase AI spending by at least 20 percent over the next three years.
Digitising the supply chain is becoming a priority as more organisational leaders realise the efficiency, cost savings, and ultimately, competitive advantage that can come from leveraging the right technology.
In your experience, how has digitisation transformed the supply chain in specific businesses?
“Overall, the supply chain industry is considered much more efficient at moving goods than it was in the past. Yet, often, the digital side of the supply chain has not kept up with the corresponding physical side of the supply chain.
“This is why more and more businesses are actively working to digitise their supply chains by leveraging tools such as predictive AI and analytics, intelligent workflows, blockchain and more. These tools were only available to industry leaders a few years ago, but are all now critical parts of the digitisation equation for everyone.
When integrated together correctly, these approaches can now allow businesses to achieve a 360-degree view of their supply chain and logistics operation. That brings tremendous value to organisations.
“For example, several Fortune 500 companies, who historically relied on manual processes, susceptible to human error, are digitising with these emerging tools to resolve common pain points.
These include: missing data between logistics parties, inadequate visibility of the product journey, inefficient handoffs between trading partners and lengthy disputes over compliance and billing issues.
“Instead, by combining and leveraging automation, intelligent workflows, AI and blockchain, these companies now have data that accurately portrays all events, transactions and personnel involved in the product journey, and allows them to collaborate in a way that improves customer satisfaction, cuts costs and produces better business outcomes.”
What steps should a business take if it is thinking of automating its supply chain? What is the workflow that’s required, and how can a business ensure it is on the right track?
“Companies should look for opportunities for automation by examining where the greatest potential impact could take place, with the least amount of disruption.
“For example, by identifying areas of missing data that might be preventing proper decisions, streamlining manual operations, or reviewing their exception handling – all of which may seem like a small place to start, but it can yield great results.
Often, the next step is to identify the gap between your current technology and a desired future state. From here, new tools can be evaluated to extend the impact of initial baby steps.
“The true power of digitisation comes to light when all the different tools available – intelligent workflows, analytics, AI and blockchain – work together, creating even more efficiency, and visibility for businesses.
Each tool plays its own critical role in getting supply chain and logistics professionals the data they need to make more informed, strategic decisions that ultimately lower costs, increase customer satisfaction and drive growth.”
Slync uses blockchain technology – what’s your advice on implementing this well?
“Industry experts seem to agree that blockchain has the potential to have a big impact on the global supply chain. Among other values, it is a way to provide trust, compliance, and a historical view of transactions between trading partners, at different points in the movement of goods.
“That said, blockchain implementations are currently considered complex, and the process of quantifying business results is still in its infancy.
“Therefore, blockchain should be compared to alternatives, before just jumping in. Often, the solution to supply chain and logistics challenges doesn’t come from one specific technology alone, but from integrating next-generation tech to get better visibility, automation and compliance throughout the entire supply chain ecosystem.”
How can smaller businesses take advantage of supply chain automation, and how do they explore the idea and test the benefits?
“Every business, large or small, can benefit from digitising because the approach improves visibility within the movement of goods. This leads to better decisions, resulting in cost reduction by automating processes – especially manual or routine processes, and compliance issues.
Smaller businesses can benefit just as much as larger organisation and are often in a prime position to get started on automation, without the complex, multinational decision cycles of large businesses.
“Their trading partner networks are also often much smaller, making it easier to implement new approaches and technology.
“Businesses, of all sizes, should start small but think long-term, and leverage the advantages that new technology offerings can bring.
“Starting by automating one seemingly simple task, such as using intelligent workflows or smart contracts, instead of relying on pen and paper or spreadsheets and email, businesses can join a path that drives reduced cost and competitive advantage.”
Shiv has over 8 years experience working on Internet of Things and an avid user of Drones
