Supply Chain Trends: Technology in Supply Chain Management

Technology in Supply Chain Management: Who Does What?

First, let’s take a look at common software in the market that assists in different processes of a supply chain and what tasks they help to fulfill:

Planning & Forecasting Software

In the planning stage, a company foresees sales and demand for its products. Looking at analytics and data helps predict the manufacturer’s production capacities and optimize inventory levels. Based on past trends, a planner can adjust prices and plan for promotions.

Product Design Software

Enable 2D and 3D product design purposes. 3D product design software can produce photorealistic visuals of a product showing materials, texture, a 360-view of the product as well as interior components.

Product Data Management (PDM) / Product Information Management Software (PIM)

Especially critical for the product development stage, PIM and PDM software manages all data related to a product. The software helps maintain assets and product information that is distributed for marketing, sales and internal purposes like technical drawings, costing and packaging information. As a centralized catalog, the system can store specifications of a single product in different languages and makes product data available across departments and regions.

Procurement and Order Management Software (OMS)

Procurement software allows organizations to automate purchasing functions such as obtaining quotes from suppliers, and handling the approval, rejection, or cancellation of an order. Similarly, an OMS handles and streamline order processes from which an order is placed to order fulfillment. The software is also a centralized database, keeping all records of existing vendors and contracts, the records provide grounds for negotiation and supplier selection in future buying activities. It can also include inventory management, arranging shipment, tracking delivery and more.

Manufacturing Execution Software (MES)

Manages and monitors the manufacturing processes of transforming raw materials into finished goods in a factory. MES collects data of the complete production lifecycle that is delivered to manufacturers, facilitating cost reduction and improving efficiencies such as better utilization of machines and allow manufacturers to know when to expect machine maintenance.

Material Requirements Planning Software (MRP)

Performs inventory control and optimization of materials used in production and products available for customers. In a production planning stage, MRP ensures the product or material availability and inventory levels can meet the demands and identify delays in lead time related to materials.

Shipping Software & Online Platform

Once a product has ended its production cycle, the finished goods are shipped to stores or directly to customers, this is when logistics planning comes into the picture. From forwarder selection and shipment bookings to tracking and cost management, shipping software offers a one-stop solution for businesses to more secure, trackable and efficient delivery.

Point of Sales Software (POS)

Processes sales-related payments and transactions at a retail store. Many will merge this with inventory management systems that allow retailers to monitor stock levels. As all transactions are processed and stored on the system, the software goes beyond just the sales level, POS can also provide sales figures and sell-through rate and handle customer returns and stock transfer between stores.

Underlying Technology Trends in Supply Chain

The technological advancement has shaped the business world tremendously, and companies are looking for more ways to integrate these trends and technology into their supply chains to improve efficiencies, in addition to customer experience and perception.

We are now living in an age where Mobile devices are inseparable to our daily lives. Instead of carrying a pen and a pile of paperwork which needs to be inputted into a spreadsheet later, an increasing number of work tasks can now be digitized and completed on our mobile devices. Work data can then be transmitted back to a centralized database in real-time with the use of wireless internet. Getting data real-time and centralized is especially important in today’s fast-paced business world where supply chains are often globally dispersed.

Retailers or companies that operate an international supply chain are involved in numerous stakeholders across the globe, keeping business transactions and other confidential materials secured is of utmost importance, particularly in cases involving new stakeholders with whom trust has not been established. That is why some supply chain managers are beginning to look into BlockChain technology. Blockchains create decentralized, distributed and digital records of transactions that are anonymous, tamper-proof and unchangeable. Yet, businesses are still at the stage of evaluating the technology’s potential and application.

One of the most noticeable supply chain trends in recent years is decision-making automation and augmentation. “ Gartner defines decision-making augmentation as using technology that generates insights and recommends actions for business users but leaves it to the human to analyze those insights and approve and execute the recommended actions. Decision-making automation, on the other hand, is using technology that generates insights and recommended decisions and executes those decisions without human intervention.” 

To allow faster decision-making, businesses need insights into their supply chain operations and market demands. Advanced Analytics is the use of high-level methods and tools to project future trends, events, and behaviors based on supply chain data. Companies and manufacturers are able to make faster decisions based on the data they collect along the entire supply chain to adjust production and distribution to minimize loss.

While some decisions are better left with human employees, others can make use of Artificial Intelligence (AI). With AI, automation is key, the technology can automate various components within a supply chain through self-learning and highly precise algorithmic calculations. For example, traditionally at the product delivery stage, we depend on the driver to find the fastest route to deliver the product, which leaves a lot to the driver’s experience, knowledge of the area, access to traffic news or even personal preference. With the use of AI and algorithms, the software is able to tell companies what is the optimal route and precisely how long will it take to go from point A to point B.

Supply chain costs can creep up over time, and one way to increase earnings is to control labor costs. How can we increase efficiency with the same or even fewer employees? Autonomous Things such as robots, autonomous vehicles and drones might be the answer to the problem. Businesses are substituting human employees with robotics, many factories are shifting manual tasks to robots in order to improve quality and production capacity, as machines can operate longer hours than humans, especially in physically demanding jobs. Others are automating repetitive manual processes with the use of Robotic Process Automation (RPA) so their employees can focus on higher-value tasks. For example, when checking factory-to-warehouse or warehouse-to-store shipment status, it would normally involve going through emails and looking up in systems and revert back to the parties involved. But with the introduction of RPA, all these can be automated unless in exceptional circumstances beyond the handling capacity of a robot. For a business receiving a large amount of inquiries each day, RPA can help cut request processing time and related human costs and errors.

Another technology in the supply chain management world slowly gaining attention is the application of Virtual Reality (VR) and Augmented Reality (AR) in daily operations. AR is predicted to be most useful in logistics processes in a warehouse, by the use of smart glasses, warehouse workers can navigate through the warehouse following a virtual route shown on their glasses or devices that leads them to product or order they are looking for. This can save substantial costs in training new or temporary employees and improve efficiency by reducing the time spent on locating each product. On the other hand, VR shows capabilities in training workers on complex or potential high-risk jobs like operating machinery. However, most of these technologies are still at an experimentation stage.

In terms of product design, AR and VR are reshaping the game for designers. The technologies allow designers to bring their ideas out of the screen and put it in a real-world setting at full scale even before the first actual prototype is produced. Designers can not only see what or how a product would look in real life, but also test whether certain ideas would work. This way, businesses can improve efficiencies in the product development stage and reduce relevant costs in prototyping, particularly where expensive materials and large-scale products are at stake.

Integrating For The Better

In the past decades, companies have been focusing on digitizing manual processes within their supply chain – order management, shipping, logistics and warehouse operations. In the recent two to three years, there is a prevalence in 3D Design in the product development and prototype building stage.

Now, companies are looking for ways to digitize more processes in their supply chain. Under the changing and tightening regulations in the selling countries, global political uncertainties – Brexit, US-China Trade War, and shifts in consumer behaviors and demands, the competition is higher than ever. Topics like Quality, Compliance, Transparency, and Sustainability are becoming more and more important at every step along the supply chain and going beyond the Tier 1 suppliers.

These changes give rise to new types of software like Topo that tackle problems conventional software providers have been failing to solve. It creates an increasing need for Quality Management Software and Compliance & Sustainability Software to facilitate inspections, audits and lab testing to keep up with regulatory requirements and consumer’s demand for product details and safety, corporate social responsibilities and streamlining processes.

For a brand, retailer or trading company, it may sound attractive to implement just one system, such as PLM, that seems to cover the whole product lifecycle. However, these companies often find themselves in a situation where there is a lack of in-depth solutions in certain areas or to certain problems in the supply chain. Many “holistic” or “all-rounded” software have their strengths in certain core processes like order processing, inventory control or logistics but lack depth and expertise in other areas.

New solutions developed by digital natives efficiently solve new rising problems as well as old problems. This does not mean abolishing the existing supply chain management system or software which companies have just recently invested in. Instead, adding specialized, nimble and in-depth solutions that integrate easily with other systems to your tool set are often the better choice.

Moreover, digitizing supply chain processes is one thing, but infusing and empowering these processes with actionable data is a completely different game. Many solutions in the market lack data transparency and flexibility. In most cases, users are shown KPIs in nice-looking yet fixed or rigid dashboards that often only have limited meaning for their users and are not applicable. Flexible data exploration and data curation are crucial to extract the insights the user needs.

Get in touch today and see how Topo’s Digital and Mobile Data Solutions can be seamlessly integrated into your existing systems and boost efficiency gains in your supply chain.