Supply chains in Canada and the world have been dramatically disrupted by the impacts of COVID-19 and this may continue for the foreseeable future. But with the likelihood that vaccination programs will ease the pandemic's impact as 2021 progresses, now is the time to learn from the experiences of the past year and increase the resilience of your organization's supply chains. There's an opportunity to reassess operational strategies and build a more responsive digital supply chain with increased connectivity and end-to-end visibility, better predictive capabilities and improved collaboration between suppliers and customers.
On the supply chain agenda
According to our most recent KPMG CEO Outlook, 92 per cent of Canadian CEOs plan to fast-track digital transformation to meet COVID-19 challenges. We think the following items should be on any transformation agenda, taking advantage of new technologies, but recognizing that as supply chains are about effective networks and connections delivering goods and services to end-customers, they need to be at the heart of such plans.
1. End-to-end supply chain visibility
Organizations should invest in capabilities to gain end-to-end insights into their supply chain and inform both strategic and operational decisions. Several technologies can help, and that includes establishing control tower systems that monitor and share information on the entire operation of a supply chain, and the use of blockchain to help ensure integrity and facilitate supplier financing and transactions.
Also, advanced tracking can help improve the use of third-party logistics, tackling counterfeiting and enhancing visibility – the last being particularly useful for cold-chain distribution where the temperature of products, such as vaccines, has to be kept at a consistently low level.
Setting up cognitive decision centres that take a cross-functional view of the supply chain (i.e. covering products, suppliers, distributors and customers) can be key for organizations to leverage other new technologies that support human decision-making, such as machine learning and artificial intelligence.
And in line with that, predictive analytics can help build resilience and lessen risks of supply or demand disruption, while advanced analytics can make supply chains more sustainable, by improving network design and implementing circular waste management, maximizing reuse and recycling. The technologies are there, and the possibilities, within reach.
Organizations should invest in capabilities to gain end-to-end insights into their supply chain and inform both strategic and operational decisions.
2. Automation and workforce
To enable the workforce to focus on more strategic and value-added activities, organizations should continue investing in their effective use of technology, data and analytics, and robotics.
For example, with intelligent automation your organization can improve productivity, reduce rates of error and enhance the safety of your workforce. Or automating the risk clearance process for suppliers can generate huge benefits, especially to enable the onboarding process and ongoing monitoring.
From a workforce point of view, there is a need to focus more on emerging digital skills and strategic use of emerging technologies including artificial intelligence and robotics. This also includes increasing the organization's data literacy, with appropriate training and recruitment strategies, to drive more value from prescriptive and predictive analytics.
3. A connected enterprise
Supply chains should be both customer-centric and supplier-centric. They need to become more agile in understanding and meeting rising customer expectations and demands, e.g. access to information around lead times and 'real time' delivery. But also continue making investments in technology, digital capabilities and data to connect the front, middle and back offices, including by moving to an 'as-a-service' model for supply chain platforms in order to increase communication and integration with their internal and external customers, and suppliers.
So, with these in mind, where do we start? KPMG in Canada helps organizations transform their supply chains with digitization. It's not about picking one technology and seeing how to make it work, it's about taking a step back and focusing on the overall approach. This means defining the business goals and having the right governance, people, ecosystem and partners.
Five steps to digitize supply chains
We recommend five steps to digitize supply chains, from understanding what needs to be done to carrying out changes with staff and partner organizations.
- Define digital: with the aims of making processes frictionless and decisions effortless.
- Start with performance: this includes selecting the metrics you are trying to improve, then considering which technologies will enable this.
- Focus on return on investment: this can involve 'smart sequencing' of projects so you prioritize those which provide a rapid payback.
- Develop your people: digital supply chains involve human decision-making supported by artificial intelligence and machine learning technologies, and this means creating new roles among supply chain practitioners, including data scientists and customer experience consultants.
- Partner for success: digitization requires an ecosystem which must be built with partners. While organizations must protect the security of their data and intellectual property, it is important to involve employees, service providers and other partners in taking full advantage of opportunities to transform supply chains.
COVID-19 has emphasized the importance of supply chains both to executives and the public, raising expectations but providing opportunities for changes that allow such expectations to be met and exceeded.
There are certainly many complexities within each of the elements outlined above, and our team of supply chain, operations and technology specialists are ready to work with you on defining what this means for enabling your organization's supply chain. Contact us to find out more, we're here to help.
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