Ripples Become Waves: New Supply Chain Disruption Norms


The pandemic and other recent high-profile cases make it clear that even one isolated incident can quickly disrupt an entire supply chain.

Supply chain and logistics sit at the intersection of major economic and societal trends, such as rapid urbanization and e-commerce growth. Customers compound the challenges by constantly demanding enhancements to shipping and logistics business processes to lower costs, improve service, and increase efficiency. Services such as freight forwarding, truckload brokerage, customs brokerage, order fulfillment, and returns management are all key to improving the efficiency of the supply chain management process, and customers want improvements up and down the chain. But that’s increasingly challenging as those customers continue to adapt, competition rages, and the rate of change accelerates and impacts all parts of a business. The net effect of the press to enhance and create efficiency is that the ripple effect of one decision could be the wave that overwhelms an organization.

See also: Covid Lessons Learned: Focus on Real-Time Supply Chains

Disruptions prevent short lead times and high fill rates

Lead time is an important metric in logistics. It is measured from the time of order submission to the time of order receipt. An equally important metric is fill rate, which is defined as the percentage of orders shipped from inventory. The goal is for lead times to be as short as possible with minimal variability and fill rates to be high, given enough inventory is maintained to avoid stock-outs.

The overall goal of logistics is to deliver the right product, at the right price, to the right customer, at the right place, at the right time, in the right quantity, and in the right condition. That’s a challenge and involves many processes across a supply chain vendor or retail company. But with challenges such as the pandemic, the recent grueling halt of hundreds of container ships in the Suez Canal, and sudden shifts in fuel costs and commodity price increases, it is clear that even one isolated incident can quickly disrupt an entire supply chain and render it immobile.

 Fight uncertainty with supply chain insights

Traditionally, demand and supply was anticipated using various modeling techniques based on historical data. But 2020 changed that. From a sharp drop in demand in the early part of 2020 to an acute supply shortage in the latter half of 2020, many global and local retailers, consumer products manufacturers, and logistics companies were caught off-guard. The disruption caused a significant reduction in revenue due to curtailment of business, an increase in expenses or a reduction in operating margins, reductions in operating effectiveness due to employees working remotely, unavailability of personnel, and much more. These are just a few examples of the widespread impact.

To survive in this new normal, businesses will need to enhance their operating model, while others need to completely reimagine how they work. To thrive, companies need to do much more to fully understand how each function and process contribute to the overall enterprise strategy and success, from connectivity to customers, call centers, warehouse management, inventory management, pricing, finance, accounting, returns (reverse logistics), amongst others. People, processes, technology, information, and facilities, and mapping their interdependencies and connectedness is key to driving operational resilience. But these connections are also frequently the cause of complex and complicated manual processes or disconnected legacy systems and applications. This not only creates additional work but it also increases operational risks, losses, customer dissatisfaction, and low employee morale.

With great change comes great opportunity

“When things do not go your way, remember that every challenge – every adversity – contains within it the seeds of opportunity and growth” – Roy T. Bennett. The global pandemic marked an opportunity for growth as companies pivot through uncharted territory. Already, process intelligence has helped companies to adapt their processes to a distributed environment, ensuring they could be there for their customers and employees in the midst of a global pandemic. Process Intelligence provides employees with the tools to leverage computer vision, machine learning, and artificial intelligence towards autonomous transformation. Individual employees are now empowered to solve business-critical issues when traditionally, not every employee has an avenue or the representation to take their ideas wider.

Decode work with humanistic visibility

Process mining is just the first step towards effective automation. Now, companies need to find a way to aggregate the influx of machine learning data pulled from the process. Given experts predict that 80 to 90 percent of data in an organization is unstructured, Process Intelligence provides an opportunity for companies to pursue automation programs at scale. Quantifiable data is the secret sauce to realistically decode operations, internal controls, and supply chains to manipulate them and actually make them work. Instead of capturing limited process logs or conducting slow, expensive interviews, Process Intelligence follows the human with automated business process discovery, modeling, and documentation. It then presents data and insights through process visualizations and reports, allowing you to view the data from a broad perspective, such as reviewing the most performed tasks or focus on a single process thread or sub-task. The ability to analyze processes at this precise level of detail enables data-driven decision-making for increased confidence.

Adapt to today’s retail, supply chain, and logistics challenges

Ultimately, companies need to quickly decode work at every level, across every channel, and in every domain. Leaders must look for detailed assessments that allow teams to make data-driven decisions at the most granular level, with no blind spots or bias. This intelligence empowers leaders to improve operations by enabling fit-for-purpose solutions such as automating repetitive processes, system optimizations and replacements, increasing compliance and controls, standardizing processes, and much more. Business process automation is relatively horizontal across finance, supply chain, marketing, human resources, and customer support, and once one effective automation solution is found for one, the rest will follow.

Rahul Talwar

About Rahul Talwar

Rahul Talwar is a Solutions Director at FortressIQ. In this role, he works with a wide variety of companies to support their strategic business and transformation initiatives by leveraging AI, Machine Learning and other emerging technologies. With over 15 years of experience, Rahul worked with Fortune 500 organizations across sectors to address regulatory mandates, ensure risk management and compliance, and implement efficiency initiatives. Prior to joining FortressIQ, Rahul worked at Cantor Fitzgerald, Societe Generale Corp & Investment Banking, and Deloitte & Touche in different capacities.

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