In the high risk environment of COVID-19, only 13 percent of global companies have total visibility of their extended supply chains according to estimates by KPMG Australia – and that’s a problem when high demand times are on the horizon.
Supply chain expert Peter Liddell, KPMG Partner in Charge of Asia Pacific Supply Chain Advisory, says that a lack of visibility – together with the high risk choke points in key parts of the goods and services supply chain caused by COVID – will lead to shortages of high demand goods into Australia during peak trading periods.
“With disruption of supply chains – especially in air freight – getting imported foods into the country is vital. The coming holiday season highlights the importance of forward planning,” he says. “We do have a solution: a powered supply chain with predictive modelling capability providing visibility that can cover an organisation and its extended value chain to help manage through periods of supply disruptions caused by crises like COVID.”
He said that right now, KPMG is experiencing heightened demand for integrated supply chain risk management solutions.
“Fortunately, there are cost-effective digital solutions available to help domestic supply chains successfully navigate these challenges,” Mr Liddell said. “These are Artificial Intelligence (AI) enabled digital solutions which can help a company by drawing upon internal and external data sources to predict risks and disruptions before they occur.”
Peter Liddell said that, in doing so, these tools help businesses to assess the operational, financial and reputational impacts of future supply chain risks – and take advantage of best-practice process architectures, embedding robust operational controls. This can allow businesses to anticipate and quickly respond to supply continuity problems.
Using AI to protect enterprise value, KPMG’s Supply Chain Predictor – just launched to market -is a state-of-the-art cloud based AI tool used to predict and mitigate operational risks and disruptions before they are likely to occur. It also enables simulation of alternative supply chain strategies through a ‘digital twin’ to assess the potential impact of any adjustment made within the extended supply chain
“Data driven insights help predict supply chain risk and disruption,” said Mr Liddell. “The ‘digital twin’ is the most spoken phrase in every corporate at present. In Supply Chain terms, it refers to the ability to simultaneously showcase the existing supply chain model next to the future supply chain – Predictor has this capability and clients who see the demo love it – many technologies speak about it – but very few currently have the capability.”
He emphasised that Supply Chain Predictor was ideally suited to the Australian and global agribusiness sectors including horticulture.
“As an example, the use of predictive analytics to sense biosecurity outbreaks for enhanced biosecurity management and proactively protect Australia’s agribusiness industry can provide local companies with a significant advantage,” he said. “Predictive management can assist in a range of industries.”
‘Human-based systems cannot absorb the level of data that an AI system can absorb. The evidence out of the deployment of these systems is that they are more accurate and their ability to absorb and analyse data is highly sophisticated. They can link changes and pick up challenges that humans don’t or can’t.’
Another key example is the ability a predictive supply chain tool has to tap into global trends including geopolitical developments enabling a bigger and more detailed picture of a local industry. The wine industry is a typical example of an area which can benefit from predictive data.
Agribusiness Key Benefits
“What’s more, from paddock to plate, KPMG is seeing strong demand for a cloud-based solution to help agribusinesses sense supply chain issues before they occur,” Peter Liddell said.
Life Sciences / Healthcare Key Benefits
Mr Liddell said using predictive analystics supply chain management techniques was also ideally suited to the healthcare and medical business sector.
“It can provide full visibility across the extended value chain to key stakeholders,” he said. “This allows them to better understand how the current stockpile of medical inventories and inbound supplies can (or will not) meet current demand expectations for critical medical supplies across the country, by state, by hospital.”
Benefits of predictive analytics for this sector included:
Mr Liddell characterised the current key risks in the Australian supply chain as including:
“In 2020, we’ve seen the COVID-19 outbreak and other related events significantly impact global supply chains – resulting in some severe consequences,” said Peter Liddell. “Predictive Supply Chain Management solutions provide “AI powered” views of the extended supply chain and operations. What’s being asked for in the marketplace is a Supply Chain Risk Management Solution to help predict the risk events, define the impacts of such disruptions to air and sea freight – as well as to road and rail - and enable cross functional rapid scenario planning capability to support agile decision making.”
Mr Liddell said new generation supply chain technology will sense risks and visualise issues by leveraging internal and external data and use the advanced capabilities of AI to define optimum course of actions based on trade-off analysis by simulating various business scenarios and help busineses to avoid or minimise operational and financial impact.
“KPMG’s predictive supply chain management solution (Predictor) addresses risk challenges facing supply chains by using a real time digital platform that utilises advanced predictive analytics,” he said.
“KPMG’s view is that it has become vital to deliver increased collaboration with all supply chain and trading partners through increased collaboration, the sharing of data and by adopting real time connectivity,” said Peter Liddell. “Supply chain performance can be quickly improved by moving planning from historical data usage - and more towards predictive analytics.”
He said that the benefits of a proactive management approach using a ‘powered’ or ‘predictive’ supply chain tool included fewer incidents signicantly impacting operations and a downstream decrease in waste consumption as well as notable increase in customer fulfilment rates. Most importantly, the customer experience is not negatively impacted and in some cases we have seen service delivery performance enhance dramatically.
“Automated reporting with predictive capabilities can show risk profiles and how they change over time,” said Mr Liddell. “Looking ahead, we also see opportunities in supply chain technology innovation such as the advanced digital traceability of goods which, once embedded, can feed into predictive modeling and further help the analytic capabilities used by these risk management solutions.”
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