The Four Stages of Digital Disruption in the Supply Chain

Organizations continue to look for areas of opportunity and inspiration on the quest to improve the operational efficiency of their supply chain. While technology capabilities are plentiful, for many, it’s not immediately obvious where one should start. What I have attempted to do here is provide a staged view on how I would categorize significant technology enablement, with one category potentially building upon the other.

Source: PINC Solutions

1. Managed – The first place to start is to implement a software package that is capable of managing repeatable processes consistently across your organization. This provides the basis for managing and refining processes. Unfortunately, most organizations place too much emphasis on data that is sourced from human input, which is prone to error, so degrading the quality and potential insight the data could provide. This data often resides in siloes of information, focusing on a specific function, such as warehouse automation. Connecting these islands of information makes every such investment more valuable.

Connecting data from related systems is not as hard as it used to be thanks to modern web services based integration technologies. Now you can do in days what used to take weeks of programming. We encounter so many organizations suffering from delays and errors caused by reliance on people to double enter information into multiple, disconnected systems. Eliminate islands of information to get a holistic view of your supply chain.

2. Assisted – Next, let sensors take care of the timely and accurate input of operational information, assisting the flow and management of information in the software, and avoiding the need for workers to input data manually. Thanks to the rise in awareness of sensors in IoT technology, organizations have a multitude of ways to Auto-ID and locate assets. The beauty of using sensor technology in place of manually entered data results in high quality data that you can depend on. Today we see RFID, GPS, OCR, barcode technology as being pervasive.

As a provider of yard management systems (YMS) technology we appreciate the value of knowing where assets are in real-time. Drivers only make money when they are on the road, so they have a habit of dropping trailers in the first open spot they see, not always where they were directed. Real-Time Location Technology System (RTLS) technology uses sensors to provide a way to validate actual locations versus desired locations, which saves a lot of wasted time, fuel and product quality (in the case of fresh produce).

3. Automated – If you have software, you can understand a business process. Sensors collect information. You can take the understanding of the process, together with sensor information a step further in the form of a an automated worker. We see practical examples of this in the supply chain all the time – like parcel sorting, product packaging, automated guided vehicles, robotic lift trucks, etc. The key here is taking a repetitive mundane job and have an autonomous robot execute it in a more efficient way. Our company, for example, utilizes drone technology to automate the identification and reconciliation of hard to reach inventory.

4. Optimized – Now that you have tools in place to automate processes, sensors to capture events and robots to automate (where appropriate), what do you do with this information overload? Take a holistic enterprise perspective. Have this data feed an enterprise grade tool that enables organizations to navigate a path of continued improvement and to provide transparent engagement with partners. Managing enterprise wide metrics, best practices, process execution, flow of information and inventory, provides the business guidance on the path of continuous organizational optimization.

These are exciting times in supply chain industry, as complex challenges can now be tackled using technology more simply than ever before.

Matt2006x2729pxMatt Yearling is CEO of PINC Solutions. He joined PINC Solutions as chief executive officer in March 2013 and is responsible for the overall strategic and operational management of the company. Matt’s past roles include vice president and general manager of Encryption Products at Symantec Corporation, senior vice president of Global CRM Product Development at Sage Inc., Chief Technology Officer for Embarcadero Systems Corp (a Ports America company). As vice president of Oracle On Demand, Matt played a pivotal role in making it Oracle’s fastest growing line-of-business.