For all their idiosyncrasies, UK manufacturers face exactly the same problems as other industries. They struggle to differentiate their offerings in the market and jump start growth, with the ever-present threat of global competition. And, just like retail, financial services and every other sector, manufacturers have been forced to think outside of the box.
One of the resounding messages from the recent EEF National Manufacturing Conference in London was that UK manufacturers need to more strongly embrace technology advantages in their pursuit of innovation, efficiency and differentiation. Why technology? Because as Marc Andreessen famously said in his prescient essay of 2011, ‘software is eating the world’– meaning that all companies need to be re-thinking their business models and taking advantage of the maturing of technologies to deliver new advantage. The alternative is to stand-by and watch as your business risks becoming victim to the next disruptive start-up – the so-called ‘Uber-effect’.
One area that is benefitting from this re-imagining of traditional processes through a digital lens is the supply chain. Given all the attention received by the supply chain over the past two decades, one might think all that can be squeezed out of efficiencies here already has been. But in the world of digital, anything that looks like it is just about settling down into a mature and sensible set of business processes that we all understand, usually means disruption is just round the corner.
Two examples where new technologies are driving the next transformative shifts in supply chain are being brought about by cloud computing and connected smart devices.
Disruption is just around the corner.
Cloud allows manufacturers, along with their customers, suppliers, third party logistics partners and even the banking institutions to participate in the supply chain, fusing together the physical and digital elements of what is more accurately described as a supply network. In a supply network of this design, upstream orders and any changes to demand or supply commitments are instantly visible to all other parties where permission is granted – permissions usually controlled by the channel masters who establish the network. Just as with Facebook, where contact details are held once and once only in the cloud so that all participants linked to that contact can see changes instantly, then so it is in a cloud supply network - with orders, inventory and proof of delivery – all held once and once only and instantly visible to others.
This desire for visibility and speed of information flow across a supply network is not new – it has been the holy grail for supply chain practitioners for years. What’s new is the availability of a confluence of low-cost, widely available technologies to make it possible, in just the same way that the prevalence of mobile phones made it possible for Uber to re-imagine the public transport industry.
But the deliverance of a ‘supply-chain-in-the-cloud’ – whilst itself offering huge benefits of visibility and speed of response – is not enough to completely transform supply chain thinking. For that, you need to add in smart-devices and the ubiquitous ‘internet of things’.
Low cost sensor devices attached to products, in combination with cloud-supply networks, allow companies to have real-time, continuously updated visibility of goods along the critical paths of their supply network. Knowing where a product is and when it will land at its destination port for example, allows for in-flight re-scheduling of onward freight forwarding, so that customer expectations may still be met – or at the very least – communicated with confidence.
Add further intelligence to the devices to check for temperature variations, excessive vibration, humidity – and now you can answer not only ‘where is my stuff?’ but also ‘how well is my stuff being looked after?’ Simplifies a lot of quality control disputes between despatch and receipt when you can take readings from the device on conditions throughout its journey.
These are just two examples of how companies are using digital technologies to transform all or part of their supply chains. There are many more.
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