Throughout the COVID pandemic, we kept reading that the pandemic has accelerated the pace of digital transformation. With supply chains in mayhem, many companies, though recognizing that digital transformation is imperative, temporarily stopped or slowed digital transformation initiatives in supply chains, so that they can direct their focus to fight the current fire and focus on the post-pandemic recovery. But while active projects took a backseat, the interest in digital technologies in the supply chain increased exponentially, as evident from the coverage these technologies have been getting since the pandemic. The category of digital projects that companies actively accelerated during the pandemic were the ones that allowed companies to resume/continue operations during the pandemic safely.

Now that the pandemic is over, we are seeing a big push from supply chain executives to accelerate the implementation of digital tools in their supply chain digital tools ecosystems. A criterion that will forever be embedded in their minds when they discuss these tools will be how these tools can help us better manage mega disruptions like COVID?

The Three Rs

In one of my posts on LinkedIn back in 2020, during the COVID pandemic, I suggested that once they are out of this deep quagmire, companies need to engage in three Rs to get back to making their supply chains robust. Those three Rs are:

• Recover
• Review
• Redesign

The three Rs have been summarized in the illustration below.

In this post, I will illustrate using an example, how technology and analytics come into play in the Review and Redesign stage.

Technology and analytics are just one aspect of designing resilient supply chains. This post only touches upon the technology and analytics aspects. Other strategic indicators of a resilient supply chain are not within the scope of this article.

Recover Stage: Keep notes from your recovery handy

We will not go deeper into the “Recovery” aspect, but we will need one critical output from the recovery process. I think the recovery process should be methodical for companies since the critical insights gained from the recovery process will act as inputs for building a supply chain that can help you better manage a crisis like this pandemic. If anyone tells you they can help you build a supply chain that will be resilient to mega disruptions like this, you need to be extra cautious.

When you make your notes, you can use the following format (partial example) to organize the learnings by functional and structural attributes.

Review Stage: You learning document should map every area of your Suppy Chain

To begin planning how to build a resilient supply chain, your first essential step should be to map your end-to-end supply chain and combine that with the critical learning notes from the abovementioned recovery. An example of mapping is shown in the illustration below. We will use this ACME Inc. example to walk through the process.

Redesign Stage

The illustration below shows the high-level steps that need to be followed in the Redesign stage to map analytics and technology’s role.

Focus on one area at a time with end to end chain in perspective

Once you view the end-to-end supply chain, you can start reviewing the redesign opportunities in one area at a time. The previous exercise of creating the whole end-to-end view above will help you keep the end-to-end impact in perspective. At the same time, you plan to redesign initiatives in a particular area of the supply chain. We will use the Inbound supply chain to illustrate how opportunities must be identified. The challenges encountered notes from the recovery phase will be the starting point- as shown in the illustration below.

In this illustration, we focus on the Inbound supply chain. Based on the analysis done during recovery, ACME’s supply chain experienced three disruptions:

• Manufacturing Disruption: Drivers were factory closures or labor shortages
• Transportation disruption: Drivers were driver shortage due to lockdown
• Inventory shortage: Drivers were supply disruption due to two other types of disruption and conventional lean safety stock planning.

Identify suitable analytics and technology lever for each area

Using the mapping structure (functional and structural) suggested earlier to capture data/information for recovery, we can then start capturing how analytics and technology need to be leveraged to address each tupe of disruption, in order to avoid or minimize the impact of such disruptions in the future.

Using the format suggested earlier (for use in documentation during the recovery phase), we will capture what type of technology and analytical approaches can be leveraged to redesign a supply chain to make it more resilient. For manufacturing disruption, the structural and functional aspects are shown below.

Structural attributes levers:

Supply Chain Network Redesign: Leveraging linear programming and mathematical optimization tools to design supply chains that diversify supplier footprint currently concentrated in one location (among other aspects).

Smart Factories: By collaborating with key strategic suppliers, set up intelligent factories with a flexible labor force, creating a factory that functions like a manufacturing on-demand platform. The intelligent factory setup will allow you to “observe” and track supplier’s manufacturing capabilities through your supply chain observatory or control tower.

Functional attributes levers:

Frequent (if not real-time) data feed from Supplier factories: If an intelligent factory can not be set up (if the supplier is not eligible to be a strategic partner), set up a pipeline to keep an eye on the manufacturing schedule and output data from the supplier.

Supply Management Dashboard: Design automated dashboards and develop metrics that help keep track of supply risks. Based on the manufacturing output of your suppliers and your set numbers on variable throughputs, your metrics should be able to flag major disruptions much earlier.

Supply disruption predictive tools: This essentially takes the metrics formulation from the above step. Armed with a few years of historical manufacturing data from the suppliers and feed from the real-time/current data, an algorithm can “sense” if something is starting to break (throughput declining, fewer workers/depleting Inventory at supplier, etc.)

Identify relevant technology aspects

For each of the technology and analytics levers identified in the previous step, list the exact analytical tool or technology that will be leveraged. Then evaluate aspects like (indicative, not an exhaustive list):

• What exact tool is needed?
• Do you have this capability already ?
• Do you want to build this capability internally or outsource the analysis (only applicable to strategic analysis tools like Network design)
• If capability needs to be built internally, what aspects of people, processes, and technologies will be involved?
• How  will you evaluate the efficacy of this investment ?
• Which team will the concerned resources be part of ? How will they interface with various functions?

Integrate these different technologies into one single digital supply chain ecosystem

Once you have done this exercise for all the areas and your entire supply chain is covered, the most critical aspect is understanding how you will create an ecosystem of all these systems. I am a strong proponent of the idea that all supply chain planning tools must “talk” to each other. It would have been challenging to achieve a decade ago, but not now.

Multiple best-in-class planning tools are beneficial only when you integrate them in a tight ecosystem.

Conclusion

As you may have figured, this is just a teaser to give you a sense of how to proceed. Even for a generic supply chain like ACME Inc., I can write 100+ pages detailing all the Analytical and Digital tools to help ACME develop a resilient AND modern digital age supply chain. The key, however, is to understand the process so that you can undertake such an initiative yourself once the storm passes.