Technology is set to be the key driver in the supply chain sector for 2024. Why? Because it's radically transforming how logistics, procurement, distribution, inventory, transportation, and warehousing are managed within organisations.
Tools such as artificial intelligence, the Internet of Things, big data, machine learning, data analytics, and robotics have rendered various levels of supply chains more efficient, from the product's origin, through each of its stages, to its final destination.
According to the consultancy firm KPMG forecasts, artificial intelligence (AI) will continue to be pivotal in the sector throughout 2024, with Generative AI (GenAI) expected to stand out due to its capability to process vast volumes of data and analyse more complex variables.
KPMG also forecasts a rise in the use of big data and data analytics, particularly in operational, sales, and customer service areas, alongside an increase in the application of technology to sustainability strategies.
Companies Embracing Change
In response to this scenario, companies are presented with a significant opportunity to ride the unstoppable wave of technological innovation, adapt, and flourish in an increasingly digital and competitive environment.
The potential benefits of these emerging tools are boundless: enhanced visibility and transparency of the value chain, making transport routes more efficient, intelligent inventory management, and customising the customer experience, among numerous others.
This technological wave is universal, reaching businesses of all sizes and regions, from cutting-edge startups to established multinationals.
Thankfully, many organisations have already embarked on this transformative journey. Forecasts by Oxford Economics and SAP, based on interviews with 1,000 executives from 10 countries, reveal that 59% of companies are prioritising supply chain investments to enhance their future state.
A McKinsey survey of over 250 global carriers and suppliers indicates that the majority of supply chain organisations have sustained or increased their technology investments since 2020, even amidst challenging market conditions.
Tailored Solutions
However, the path towards digital transformation is not without its hurdles.
Data security emerges as a primary concern for organisations modernising their operations, fearing increased system interconnectivity might escalate the risk of cyberattacks.
Fortunately, today's market offers numerous robust and reliable security solutions against both internal and external threats.
Another growing concern is supply chain disruptions, which can arise from political or economic instability in countries, or from natural disasters such as floods, storms, or earthquakes.
These disruptions can significantly impair a company's operational efficiency and its ability to meet customer expectations.
According to a study by Capgemini involving 2,000 companies across 15 countries, 89% of organisations view supply chain disruption as the chief risk to their business growth. To mitigate this, some companies are exploring the relocation of their supply chain networks.
Yet, technology plays a crucial role in navigating these disruptions successfully, offering solutions that improve visibility and traceability. This allows companies to monitor the entire flow of the value chain.
One exemplary tool is SAP Integrated Business Planning (SAP IBP), a cloud-based solution focusing on integration, sales, and operations planning. SAP IBP facilitates a sustainable and risk-resilient supply chain by enabling rapid and flexible planning, helping companies to manage potential disruptions effectively.
Commitment to Innovation
As we face rapid technological advancement, supply chains are challenged to reinvent themselves and embrace new tools for greater flexibility and resilience.
In sectors such as retail, automotive, food, pharmaceutical, and electronics, the technological evolution of supply chains is already demonstrating significant benefits.
Modernisation is imperative, and those who delay in joining this progressive movement will soon find themselves outpaced by more agile competitors.
Though the journey may seem daunting, the rewards of a digitalised supply chain are well worth the effort. Companies that take the initiative to begin this transformation today are laying the groundwork for their future success.
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