By Dr Suresh Vidyasagar Menon-Chief Consultant & Business Advisory for Six Sigma, Operations, Strategic Management and Information Security
Although different industries and different businesses vary widely in terms where they are in evolution of their supply chain management, many businesses can emphasize the following:
- Measuring supply chain ROI
- “Greening” the supply chain
- Reevaluating outsourcing
- Integrating IT and a well reinforced Cybersecurity systems
- Managing Risks
- Adopting lean Principles
- Being agile
- Using Artificial Intelligence
Measuring Supply Chain ROI enables managers to incorporate economics into outsourcing and other decisions, giving them a rational basis for managing their supply chain.
Greening the Supply chain is generating interest for variety of reasons, including corporate responsibility, regulations and public pressure.
Reevalvuating Outsourcing companies are taking a second look at outsourcing especially global suppliers. Decisions to outsource have been on lower prices resulting from lower labor costs. Other potential benefits include: the ability to focus on core strengths, converting fixed costs to variable costs, freeing up capital to devote to other needs, shifting some risks to suppliers, taking advantage of supplier expertise and ease of expansion outside the home country.
Integrating IT produces real time data that can enhance strategic planning and help businesses to control costs, measure quality and productivity, respond quickly to problems. For Example, usage of ERP Systems are helping companies to do forecasting and also plan for procurement and supply. There is always a risks of systems being hacked so usage of cybersecurity and ethical hacking tools which are in license as well as as opensource is recommended.
Managing Risks for some businesses, the supply chain is a major source of risk, so it is essential to adopt procedures for managing risks. Organizations can use lean principles and six sigma to drastically reduce waste and improve quality in the supply chain.
Being Agile means that a supply chain is flexible enough to be able to respond fairly quickly to unpredictable changes or circumstances such as supplier production or quality issues, weather disruptions, transporting issues, political issues and pandemic issues.
Using Artificial Intelligence
AI-powered demand forecasting tools utilize machine learning models to analyze historical sales data, market trends, and external factors like economic indicators and seasonality. These models can generate highly accurate demand forecasts, enabling businesses to plan production, procurement, and distribution more effectively. AI algorithms can also optimize inventory levels based on these forecasts, ensuring that businesses have the right amount of stock on hand to meet demand without incurring excessive holding costs.
AI is transforming transportation and logistics by optimizing routes, scheduling, and fleet management. AI-powered route optimization algorithms consider factors like traffic conditions, road closures, and delivery deadlines to determine the most efficient routes for trucks and other vehicles. AI can also optimize fleet utilization by analyzing vehicle usage patterns and recommending efficient scheduling and maintenance strategies. This results in reduced fuel consumption, minimized delivery times, and improved cost efficiency.
The future of AI in supply chain management holds immense potential. As AI technologies continue to evolve, businesses can expect even more sophisticated solutions that enhance efficiency, agility, and resilience. This includes advancements in areas like autonomous vehicles, robotic process automation, and blockchain technology. These technologies will enable businesses to automate tasks, streamline processes, and create a more interconnected and intelligent supply chain ecosystem.
About the Author
Dr Suresh Vidyasagar Menon has 31 years plus of overall experience in IT, around 3 Years in Auditing of ISO 27001-Information Security Standard, has executed 25 plus projects in IT and two turnkey projects for eastern railways (Liluah) and has to his credit 14 publications in International Journals of Science, Engineering & Technology and is also a awarded reviewer for 6 International Journals.
