Despite the super-hype around technologies like artificial intelligence and the internet of things, many supply-chain companies still rely on paper and spreadsheets to complete critical tasks. As a result, companies in varying states of digital transformation struggle to collaborate in a meaningful way.
While some companies can track precise details of a single product in real time across the supply chain, others remain largely uninformed, as information is unreliably jotted down on paper in a non-sharable form. It’s no wonder that supplier adoption of digital transformation ranks as a top concern.
While some businesses can require the use of certain technologies as a criterion for inclusion in approved vendor lists, paper- and manual-based organizations don’t have this option. Instead, to achieve adoption, companies must incentivize and encourage suppliers by demonstrating ROI in the form of time and cost savings. The price of supply-chain technology, once a major barrier to adoption, is decreasing, making it easier for suppliers to justify the investment. However, a lot of work needs to be done before they fully embrace new technology. Below are the top three arguments for convincing suppliers to adopt supply-chain technology.
Sensor technologies improve visibility and efficiency. One of the biggest factors that slows down the supply chain is a lack of visibility, both internally and externally. Nothing gets more in the way of efficient collaboration than the simple lack of information flow. Technologies such as radio frequency identification (RFID), barcodes and scanners, when combined with cloud-based computerized shipping and tracking, simplify the process and provide the visibility needed for improved efficiency and accuracy.
RFID tags can be affixed to goods and used to track them along the supply chain. These tags serve a similar purpose as barcodes, the major difference being that they don’t need to be within the reader’s line of sight, and can be embedded in the tracked object. This way, a worker using an RFID reader can instantaneously gather all data about goods in the area, rather than scanning items one by one. Tracking equipment substantially improves efficiency by enabling the detection of anomalies in real time, making it easier to instantly correct mistakes without causing major disruptions along the supply chain. It also promotes more consistent and accurate tracking, maximizing control and improving overall visibility for all parties.
Barcode and RFID scanners that connect to cloud-based software and mobile devices help consolidate tracking information from the tags or barcodes, and make the data available in real time. Having this data at suppliers’ fingertips enables them to digitally organize inventory, monitor tracking information and shipments, and prepare invoices. This type of visibility across all suppliers is invaluable for improving efficiency and saving both time and money.
Data analytics tools grow business insight. In any business, knowledge is power. For suppliers, it comes in the form of data from the supply chain that can lead to better business insights. RFID tags, barcodes and IoT sensors all have one major benefit in common: they gather data. However, for this data to be useful, it needs to be captured and analyzed to derive actionable business insights.
Suppliers that adopt advanced analytics can identify future opportunities and mitigate challenges by evaluating patterns found in data. Data collected at each point in the supply chain can point to common holdups, so that suppliers are aware of where to make improvements. For example, if the majority of delays are found to take place during the picking process, managers know to make that a focus for improvement. Advanced analytics are also being deployed in areas such as dynamic pricing, quality testing, weather patterns, and sales data.
Taking analytics one step further, AI solutions can automate supply-chain processes, using the data to perform tasks such as demand forecasting, production planning and even predictive maintenance. While suppliers might lack the labor support to constantly analyze and act on data, AI can help improve order delivery and service levels to optimize deliveries around variables like weather, or predict equipment failures so it can be tended to before it becomes a hindrance to the supply chain.
Early adoptions make way for more value over time. The proliferation of sensors, data and AI technology is giving rise to more advanced technology such as wearables, robots, drones and autonomous vehicles. Although you might not see these technologies in every warehouse just yet, you can be sure that in a short time they’ll be as commonplace as barcodes.
Wearable devices such as smart glasses, watches and other accessories can help boost worker productivity at a time when the industry is facing major labor shortages. We’re already seeing the more frequent use of similar technology like voice picking. To ensure that all employees, suppliers and partners are able to collaborate efficiently with different wearables, multi-module data-capture software is essential. The ability to capture data in this manner will ensure that no information goes missed by suppliers or partners, even as more wearables are adopted in the future.
Drones and self-driving vehicles can move quickly around the warehouse to expedite tasks such as picking, inventory management and forklift operation. This level of precise and systematic automation can increase productivity by reducing the resources needed to complete tasks, and performing them more quickly and accurately. However, these technologies can only be implemented if other systems are deployed to manage human-robot coexistence and coordination. For example, sensors, RFID tags and more need to be deployed on the same network, so that both humans and machines can collect and process information necessary to collaborate efficiently. Implementing the technology for humans now will make machine and robotic integration simpler down the line.
Technology promotes trusted partnerships. With the cost of technology decreasing, suppliers that fail to adopt collaborative technology will soon fall by the wayside. More importantly, from a collaboration standpoint, companies that adopt technologies with the same goals in mind — increased efficiency, productivity and cost savings — will build successful, trusting partnerships that provide value to all partners. When it comes to supply-chain collaboration, companies don’t just need a supplier or vendor, they need a trusted partner.
Jim Dempsey is a director with Panasonic.
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