When I was scouting for my new car, I found that Honda City offers 15 variants of the same car and it comes in 5 color options. A little simple math and that makes 75 SKUs. Now add that to 6-7 more Honda brands available in India. You can imagine how stretched the procurement team will be finding the right products to build the car, the production team who is under the time stress to roll-out the right number of cars and the transportation team who needs to assure availability of the final product to all registered distributors and dealers.
Pressed by dynamic consumer demand, proliferation of digital business & channels and increasing competition, multinational corporations across the world have started to offer more choices to their consumers, meeting their focused demands at a rapid speed, with pin-point accuracy. While consumers are happy, this casts nightmares for the supply chain!
Back in the ‘70s technology made its first major impact on the logistic industry when we moved from physical record-keeping to using computerized systems to store data. What followed was a series of updates by leading manufacturers. In the 1990’s the wheel turned again with two major changes – the introduction of Enterprise Resource Planning (ERP) systems and the rapid globalization of the supply chain (outsourcing). The 2000’s were characterized by the growth of more integrated supply chain management (SCM), leaping to the era of digital transformation, where supply chains are more global and connected given the swift adoption of Internet of Things (IoT), RFID chips, GPS tracking and other advanced technologies.
Global firms recognize the transformational role of IoT, particularly in the manufacturing and retail industries. IoT has the power to transform your supply chain by building efficiency in operations in ways that were never conceivable before. Research says by 2025, there will about 70 billion connected IoT devices globally, having economic impact of as much as $11 trillion per year across multiple sectors.
Ways IoT is improving your supply chain:
- Location Tracking
- Track deliveries from the supplier to the manufacturing facility
- Track deliveries and materials around your manufacturing facility
- Track deliveries and materials inside your manufacturing facility
- Environment Sensing – Monitor sensitive goods to avoid damage or loss
- Fleet Management – Monitor fleets to mitigate risk of fleet breakdown, delay, product decay due to faulty refrigeration etc.
- Forecasting and Inventory – Amazon is using WiFi robots to scan QR codes on its products to track and triage its orders
- Scheduled Maintenance – smart sensors to manage planned & predictive maintenance and prevent down-time
Impact of System Integrators
Digital Transformation of your supply chain is more than just a cool technology. It’s also about a robust strategy and availability of key skills. Pureplay Service Integrators such as Cognizant, Infosys, Wipro, TCS and HCL to name a few, play a strong role in advising and integrating the right solution for a company’s modern-day supply chain challenges. There are many ways to pick the perfect SI partner. Seven ways that I can think of off the top my head are:
- Check their ability to understanding your business needs and challenges.
- Check for their experience in the field of supply chain management – examine the case studies wherein they have fundamentally transformed the supply chain system of an organisation.
- Check the proposed solution framework, commercials and timeline.
- Check their bench strength and people skills.
- Check for references – speak with their client’s executives. Inquire about the following:
- Quality of work done
- Ease in coordinating
- Post-delivery maintenance
- Key benefits from the implementation
- At the end of the project, what kinds of training documentation, manuals, and records will be included as a project deliverable?
- Conclude by benchmarking the technical expertise and delivery with cost and timeline to choose the right partner!
Research shows 65% of retail and manufacturing businesses have already begun to transform their supply chain processes. However, in many cases today, there is hesitancy to add devices to a control system unless they are needed by regulations, due to the cost factor. The ability of IoT is to remove this obstacle and make any information available to anyone, anytime. Over the next 5 years we are going to see control systems re-imagined and transformed to play a different role in supply chain management with SIs playing a key role in orchestrating the ecosystem.
~Kishalay Choudbury, Director