While digital solutions such as AI and IoT can be leveraged to track emissions, optimise transportation routes, and reduce fuel consumption, blockchain can be used to achieve transparency across the supply chain
In this era of unprecedented connectivity and information exchange, the resonance of strategic digital shifts reverberates across industries, redefining the very fabric of supply chain dynamics. Embracing digital transformation for complex supply chains is a game changer for global businesses.
Digital shifts focused on fortifying supply chains are pivotal for enhancing efficiency, mitigating risks, and even achieving ESG goals. And players across the globe are now trying to leverage technology as a solution for long-standing bottlenecks that slow down and disrupt business as usual.
The Role of Digital Transformation in Fortifying Supply Chains
As the world becomes more interconnected and supply chains span greater distances, digital solutions have emerged as the fundamental driving force behind supply chain excellence.
● Data-Driven Decision Making With AI: Sophisticated AI has become a powerful tool in driving supply chain efficiency. With the ability of AI algorithms to analyse massive pools of data, businesses can accurately predict demand in the face of uncertainties. This empowerment allows businesses to optimise their inventory levels and proactively respond to any situation.
Furthermore, AI-powered predictive maintenance models serve as guardians of expensive machinery and devices, allowing continuous monitoring of equipment health and the detection of anomalies. The benefits of AI across the supply chain are undeniable, as according to CTMfile, AI-powered supply chains are 67% more efficient than traditional supply chains without AI.
Artificial General Intelligence (AGI), though at a nascent stage, if achieved, can transform the supply chain industry through dynamic planning, predictive analytics, and autonomous decision-making. It can optimise resource allocation, enhance demand forecasting, and enable agile responses to changing conditions.
AGI can contribute to risk management, provide end-to-end visibility, and automate routine tasks through Robotic Process Automation (RPA). It can also improve supplier relationships, optimise logistics, and foster continuous process improvement. However, ethical considerations and a phased adoption approach are crucial for successful implementation.
● Enhanced Connectivity and Real-Time Visibility With IoT: IoT devices provide real-time visibility into every corner of the supply chain. This includes the condition of storage locations, the status of goods, and product movement.
Recorded data points can be leveraged to determine transportation performance, reliability of suppliers, and distribution inefficiencies. Furthermore, by combining IoT data with ML and predictive analytics, businesses can identify key patterns and trends, enabling them to proactively address potential risks and create data-driven contingency plans.
A prominent example of IoT devices driving a business to unprecedented heights is that of the global brewing company Anheuser-Busch InBev. By utilising IoT sensors across its brewing facilities, Anheuser-Busch InBev has been able to carefully monitor and control various aspects of the brewing process.
According to a McKinsey report, the company leveraged the collected data to accurately predict failures up to 7 days in advance, keeping filler equipment operating 96 percent of the time.
● Improved Collaboration and Transparency With Blockchain: Modern advancements such as blockchain enable real-time visibility and end-to-end transparency by serving as a single source of truth for all transactions and events, from raw material suppliers to end customers.
The blockchain-based platform, IBM Food Trust, is an example of using blockchain to effectively and efficiently trace the complex journeys of products. This platform is currently used by powerhouses such as Walmart, Nestlé, and Unilever to track food products from farms to store shelves.
ESG Milestones: A Commitment to Sustainable Business Practices
ESG factors heavily influence modern business operations. Along with high-quality products, stakeholders demand that organisations achieve ESG goals and give back to their communities. Now, the proliferation of digital solutions into our supply chains is poised to not only boost efficiency and economic growth but also enable the achievement of strategic ESG milestones.
From an environmental standpoint, digital solutions such as AI and IoT can be leveraged to track emissions, optimise transportation routes, and reduce fuel consumption. Similarly, blockchain technology can be used to achieve transparency across every point of the supply chain, allowing companies to choose sustainably procured materials and vendors.
Digital solutions like blockchain also empower companies to achieve their social responsibilities by providing comprehensive visibility of labour practices across their supply chains. By carefully monitoring working conditions, businesses can support fair labour practices and promote higher working standards.
Finally, under governance, digital solutions enable real-time visibility of products, sales, and overall operations, allowing the detection and prevention of unethical practices such as fraud, corruption, and exploitation. In unison, these tools can positively impact brand reputation, showcasing the company in a positive light globally as a creator of excellent products and a flagbearer for a greener tomorrow.
Leadership in Action: Realising Efficiency Gains and ESG Goals Through Digitalization
As we enter an era of innovation and efficiency in supply chains, business leaders today bear the responsibility of guiding their organisations towards an innovative and sustainable future.
This entails gaining unprecedented visibility and unraveling opportunities. In the face of disruptions and financial underperformance, businesses may often decide to deprioritize digital solutions in favour of a more defensive approach. However, it is the responsibility of industry leaders to ensure digital transformation never takes the backseat.
In today's dynamic business landscape, shareholders aren't just eyeing profits; they're demanding a commitment to a brighter, more sustainable future. This shift is like a wake-up call, fueled by a collective awareness of the looming risks tied to environmental degradation, social inequality, and shaky governance.
Savvy investors now see that companies embracing ESG factors aren't just playing nice; they're gearing up to tackle the unexpected, fortify their resilience, and seize exciting new opportunities. For businesses, jumping on the ESG bandwagon isn't just a trend; it's a strategic must-do.
The role of our modern-day leaders is to consistently strive for improvements by embracing continuous innovation. By embracing AI, automation, and IoT across supply chains, leaders can make data-driven decisions to enable significant boosts in efficiency while also effectively tracking and exceeding ESG goals.
A Tech-Driven Tomorrow: Embracing Efficiency and ESG
From leveraging AI for predictive analytics to utilising IoT devices for real-time visibility and embracing blockchain for enhanced transparency, digital solutions offer unprecedented opportunities. For businesses aiming to fortify their supply chains, it's imperative to embrace these innovations, not only to enhance operational efficiency but also to meet and exceed ESG targets.
As supply chain leaders, we must foster collaboration and become technology champions who promote environmentally and socially responsible businesses. The call to action is clear: together, we must pave the path towards a future where resilience, sustainability, and efficiency converge through strategic digital transformation.
(Rahul Garg, Founder & CEO, Moglix)