The COVID-19 pandemic has revealed the vulnerabilities and fragilities in global supply chains.
The immediate focus is on maintaining supplies and meeting customer needs, but it’s also important for leaders to analyse the current pain points to understand how they can better manage, foresee and limit the severity of disruptions.
Artificial intelligence (AI) and other emerging technologies – such as automation, blockchain, IoT, 5G and edge computing – can help businesses maintain supply-chain continuity amid disruption and uncertainty, according to a new report from IBM’s Institute for Business Value.
COVID-19 and Shattered Supply Chains argues that supply chains should be dynamic, responsive and interconnected to an organisation’s ecosystem and processes.
“This requires end-to-end visibility, real-time insights and decisive actions – particularly in escalating situations,” says report co-author Jonathan Wright, global head of Cognitive Process Re-engineering at IBM.
With unstructured real-time data feeding into AI, supply chain professionals can optimise orders based on factors like inventory reallocation and prioritisation, Wright explains.
Wright and co-author Jim Lee, Distribution Sector partner at IBM Global Business Services, recommend that organisations focus their supply chain resiliency efforts on three key areas:
- Structural risk and flexibility: Smarter supply chain modelling and scenario analysis through digital twins can provide an immediate assessment, as well as continued evaluations of the fine balance between lean operations and risk mitigation. Using analytics, AI and visualisation tools, it’s possible to model and then build flexibility and optionality into structural supply chains.
- Global visibility and insights: Using AI, organisations can turn unstructured real-time data into insights that help predict disruptions and vulnerabilities, providing visibility and insights for recommended corrective actions.
- Rapid reaction and resolution: Allow strategic partners to quickly collaborate and understand the impact of disruptions. Use AI to support rapid scenario planning.
“As organisations journey toward an intelligent, self-correcting, smart supply chain, the most adaptable companies will learn from their current challenges and implement intelligent workflow strategies to create smarter supply chains,” the authors say.
Download Osborne Clarke’s Next-generation connectivity report to read more about how emerging technologies combined with new levels of connectivity will transform key business sectors.