The 21st Century has seen tremendous innovation in supply chain technology driven by the Internet, web services, mobile technologies, GPS, cloud computing, and so many other developments. What is the next evolution in supply chain technology? What factors are driving it and why is this important for supply chain professionals? Those are the main questions I discussed with Pervinder Johar, Chief Executive Officer at Blume Global, during a recent episode of Talking Logistics.
The Next Evolution in Supply Chain
With technology companies such as Apple seemingly announcing new products every other month, we understand that innovation drives our world forward today. So, what is the next evolution in supply chain technology? Pervinder notes that in the past the focus was on point solutions and “best-of-breed” applications driving innovations on a feature-function basis. The next evolution goes beyond applications to supply chain platforms.
Pervinder explains that the focus now is not just on software features and functions, but on data and networks too. “Supply chains have always been networks of many trading partners, and we have an abundance of data, but not enough insights,” he says. “Moving from applications to network platforms allows us to look at how we can improve overall business processes.”
What is driving this change in thinking now? Pervinder comments that the trade wars, pandemic and supply chain congestion of the past two years have forced companies to change their thinking on supply chain processes and technology. Many applications failed to adequately handle these disruptions causing companies to reexamine and accelerate their adoption of digital transformation technologies that have been evolving over the past 10 years.
Pervinder says, “Equally important is the evolution on the consumer side, which tends to adopt new technologies faster than businesses. From Facebook and Linkedin to Uber and DoorDash, consumers take networked platforms for granted. The business world is finally catching up and recognizing that the world has changed and supply chain technology must evolve to networked platforms, as well.”
While the industry has recognized the need for agility, flexibility and responsiveness, and has begun evolving physical supply chain infrastructure to accommodate this shift, the one thing that hasn’t changed is the importance of data. But poor data quality continues to plague supply chain operations. I asked Pervinder if the network approach is going to make data quality better or worse.
Pervinder notes that for years he has continued to hear Chief Supply Chain Officers talk about protecting their data. This can be a roadblock when sharing data over the network, which is critical to supply chain success. He says, “In the networked economy, we recognize that sharing data such as on Waze [the crowd-sourced navigation app] benefits everyone. This way everyone’s data provides more useful insights. And through this collaboration, and AI and machine learning technologies, the data is cleansed.
“Over the past two years everybody has wanted to do analytics on their own data, but that’s not very useful for networked platforms. It’s sort of like the parable of the blind men examining an elephant, everybody has a different idea about what it is. In a networked platform, we’re all providers and users of networked data, and that big picture view provides better insights to what’s happening, as well as cleaner data. The problem isn’t the technology, it’s companies’ mindsets about sharing data.”
What Happens to Legacy Systems?
With the evolution from point solutions to network platforms, CIOs and CFOs might be wondering what happens to their sizable investment in legacy supply chain software. Pervinder explains that companies should approach network platforms in two ways. First, network platforms can provide visibility data and insights that can feed into existing systems for better decision-making. Second, companies can surround legacy applications with a network management layer, or platform, that leverages network data to better synchronize operations across the supply chain.
“It’s impossible for companies to swap out all of their legacy applications at once, and some may not need to be changed,” says Pervinder. “They can start by leveraging the visibility offered by network data and migrate to digital platform solutions over time. The key is to have a vision of where you are heading and a starting point for where you can begin to leverage network data and better communicate with supply chain partners, then build off that over time. As you start to connect to your trading partners, the possibilities begin to open up.”
What else can companies do to blend legacy systems and network platforms to improve operations? What additional evolution is on the horizon? Pervinder shared great insights and advice on these topics and more, so I recommend that you watch the full episode for all the details. Then post a comment and share your own perspective on this topic.