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How Automation and AI are Salvaging the Global Supply Chain and Making it More Resilient

April 1, 2022


If we consider all the significant innovations in human history, we might be able to see that quite a few are connected with global crises. For example, the world was introduced to penicillin, jet engines, and radar technology during World War 2. Likewise, the global supply chain network realized the importance of automation and new-age technologies like artificial intelligence and machine learning in the face of extreme disruptions following the pandemic.

How the Pandemic Impacted the Global Supply Chain?

It is expected that the world will be a lot different from what it used to be before the COVID pandemic engulfed all the nations.

Even while the COVID crisis was at its peak in 2020, the global supply chain found itself at historic levels of disruption. With factories pulling down their shutters, freight costs mounting, and loss of jobs, the challenges compounded for consumer goods companies and others worldwide.

For retailers, the issues were slightly different. The year-long lockdown created mayhem of bulk buying among residents. Hence, nearly 72% of retailers experienced too many out-of-stocks for fast-moving products as a top inventory challenge.

Unfortunately for businesses with global footprints, the compounding challenges in the supply chain network became unmanageable due to the lack of supply chain visibility and technological immaturity of local vendors and suppliers.

What is Supply Chain Visibility, and Why is it Important?

The concept of digitally optimizing the supply chain network was always there. However, the global pandemic became the key driver, pushing the final pieces of the puzzle into place. Business leaders had the foresightedness to presume such a change is inevitable. However, the time of the change was not determined until the global crisis.

Now, when new-age technologies are the only answer to the impending crisis, the visibility of end-to-end supply networks gained the spotlight. Here’s why:

Visibility in supply chain and logistics refers to easy tracking of how every component works in the network to complete the product’s journey from supplier to the manufacturer and finally to the end-user. And this visibility is no longer restricted to tier 1 and tier 2 suppliers. Rather, it is about gaining upstream and downstream visibility into supply chain activities.

Also, companies relying on antiquated visibility and traditional tracking methods using spreadsheets or disconnected software systems faced difficulties keeping up with remote workforce management, a massive rise in e-commerce orders, varying demands of new customers, and supply chain disruptions during the crisis.

Further, they realized that visibility is crucial to building resilient supply chain networks that can override the challenges of any disruption, including global crises like the pandemic. However, without data, supply chain resilience is far-fetched.

Hence, the focus shifted to the digital supply chain. As a result, many companies stepped up their investment to offset the pandemic’s negative impact on businesses.

How Modern Technology became the Ultimate Salvation for Supply Chain

Data is the foundation for supply chain resilience, as mentioned by Arnold Kogan, Managing Director and Partner of Boston Consulting Group. Data is needed to forecast the future and make informed decisions aptly. Unfortunately, the traditional data mining from spreadsheets is time, labor, and cost-intensive.

Digitally addressing the shortcomings of data extraction using Automation and Artificial Intelligence is the best bet for companies. Automation can easily fuel efficiency and enhance the visibility of the global supply chain network. More and more companies are investing in automation because they do not have the luxury of waiting for the next 3-5 years.

Here’s a brief overview of how automation helps maximize supply chain visibility and foster resiliency of the global network:

Responsive Supply Chain: Automated solutions increase supply chain visibility, equipping suppliers with real-time data about what’s happening and where, when, and why. Such data allows concerned parties in the network to act immediately when disruptions start appearing. Hence, increased transparency results in increased responsiveness of the supply chain.

For example, 33% of CGs cited improved responsiveness to changes in supply as one of the top benefits of new technology like AI and ML.

Employee Engagement: With automation, employees feel more in control when handling customer inquiries or improving customer satisfaction with on-time product delivery.

Dealer Experience: AI in the supply chain provides visibility into the market consumption of original equipment, the equipment’s health, and parts in high demand.

For example, 52% of CGs state that new technology like AI and ML improves responsiveness to changes in demand.

Customer Satisfaction: When all parties are connected directly or indirectly to the supply chain, we can expect better customer service, focusing solely on upscaling their satisfaction.

So, can AI Salvage Supply Chain from Disruption?

The answer is – a definite Yes!

New-age technology like automation, AI, and ML have proved to be more than efficient in streamlining various complexities existing within business networks. Hence, applying the new technologies combined with data helps optimize and create a resilient supply chain that can survive any disruption.

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