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3 Ways to Better Manage Supply Chain Risk in 2019

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3 Ways to Better Manage Supply Chain Risk in 2019

Managing a supply chain in 2019 incurs a certain amount of risk by necessity, but having a plan in place to manage risks, respond to incidents, and deal with disruptions can put your business ahead of competitors.

In order to best address these supply chain risks, they can be categorized by implications, or by sources.

  1. Qualitative: addresses the reliability and accuracy of materials
  2. Quantitative: addresses the availability of material or overstocks
  3. Atomistic: impacts only constrained links within it
  4. Holistic: requires businesses to assess entire supply chains

Based on a joint report from Cranfield School of Management and Dun & Bradstreet, supply chain risks can also be categorized in the following segments:

  1. Supplier criticality
  2. Supplier financial risk
  3. Global sourcing risk
  4. Foreign exchange risk

By looking at each of these risk categories individually, businesses gain a deeper understanding of how to best prioritize their attention. Supply chain risk management trends for 2019 offer further insight and solutions to businesses who desire a more transparent, risk-aware supply chain.

Keep Tabs on Your Current Suppliers

Visibility and transparency throughout the supply chain are critical as consumer priorities shift toward socially and environmentally-conscious ethics.

Outstanding performers are 250% more likely to have a fully visible and transparent procurement system compared to their peers, according to Deloitte’s Global CPO Survey of 2018. Despite this, 65% of procurement leaders have little or no visibility in their supply chains, according to the Zycus whitepaper “Ensuring Efficient Supplier Risk Management with Supply Chain Transparency.”

Pick Your Battles with Suppliers

Arguments with suppliers can cause major disruptions to production. While disputes are bound to happen, minimizing risks by hiring effective communicators who can arrive at symbiotic compromises will go a long way toward your company’s bottom line as well as maintaining fruitful supplier relations.

It’s also important to pick your battles with suppliers; ultimately if there is a continued conflict with a supplier, it may be time to find a new one.

Utilize Technology To Its Fullest

Modern technology can make a big impact in supply chain risk management if used correctly. 2019 trends include artificial intelligence, the Internet of Things (IoT), and blockchain as helpful resources to supplement your supply chain management.

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Supply chain – predictions for 2018 trends

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When Elon Musk recently announced that Tesla would start building electric semi-trucks that would have 500-mile range and come with a version of Tesla’s Autopilot driving aid, the world realized it wasn’t a matter of if, but when these new trucks would be hitting the highways. After all, this is the same guy who said he was sick of sitting in traffic and launched the Boring Company, which is now tunneling beneath the gridlocked freeways of Los Angeles. And let’s not forget Musk’s SpaceX, the Hyperloop and Tesla – all radically different companies predicated on technology innovation, creativity, disruption and long term commercial viability.

The pace of innovation is picking up steam at an exponential rate. With advanced hardware, software and connectivity becoming accessible and cost effective on a global scale, we’re experiencing an innovation shift from desiring “better gadgets” to discovering entire new business categories built around technology. The implications for consumers is exhilarating and at times terrifying. The implications for businesses is terrifying and at times exhilarating.

Technology has become fully embedded in supply chain management – just go to any supply chain conference and you will find agendas dominated by tech talk. Robots, self-driving vehicles, electric trucks, blockchain, the Internet of Things (IoT), and new mobile-enabled categories are all poised to explode onto the scene in one form or another. It’s hard to predict what’s real and what will fade away, but expect 2018 to become a year of heavy innovation for supply chain leaders, even if it’s experimental. But…

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How a pharmaceutical supply chain company is taking advantage of the Internet of Things

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In 2014, during a routine check from the Ministry of Health in the U.S., it was found that only 55 percent of vaccines were stored and transported in the temperature conditions that ensured the medication maintained its quality. To put that into perspective, every baby born receives vaccines to prevent diseases such as small pox and measles. If only 55 percent of those vaccinations maintain safety requirements, that creates a situation where a majority of babies don’t get the quality dosage and medication they need to protect them from diseases.

To overcome this challenge, organizations are turning to technology. More specifically, the Internet of Things (IoT) is making it possible to ensure the safer transportation and delivery of medications. Dutch pharmaceutical services company, AntTail, is paving the way for building innovative IoT applications that more effectively track the conditions of medications while in transit.

The team at AntTail built an IoT application using the Mendix low-code application development platform. The application collects sensor data from medication shipments to provide information on temperature, as well as send push notifications to patients with reminders on when to take the medication.

One of the barriers for creating IoT apps is the requirement of many disparate technologies. AntTail uses a central router as a hub for all of the sensors, collecting the data when there is a connection and storing the data when there is no connection to ensure that no data is lost. The Router uses Vodafone’s Managed IoT Connectivity Platform as a way to connect to AWS, and has a Java service running that puts the data into Hadoop.

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How incorporating IoT into the cold supply chain could save florists millions this Mother’s Day

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A leading expert claims that the flower industry could save hundreds of millions of dollars just by ensuring supply chain efficiency in the lead-up to Mother’s Day.

Shipments in the floral industry spike ten-fold in the lead up to Mother’s Day and an estimated $2.6 billion is expected to be spent in 2017 even though it’s estimated that 40 per cent of flowers are never even sold.

David Bairstow, Product VP at location specialists Skyhook, reckons that incorporating the internet of things into the cold supply chain could result in massive savings.

He said: “Supply chain is an industry born out of economies of scale. The same applies to the cost of implementing IoT, as scale increases, return on investment increases. It costs pennies to ship individual flowers; however, using supply chain insights to increase efficiencies and reduce waste, can quickly pay for itself.

“Factoring in that the 40% waste due to unsold flowers amounts to $1.04 billion, it is evident that there is massive scope for improvement. If introducing IoT into the cold supply chain leads to decrease in waste by even 10%, that would result in more than $100 million of savings.”

Companies like KaBloom are constantly optimizing the day-to-day supply chain over time to achieve the most efficient path to the consumer. They see a ten-fold increase in volume on days like Mother’s Day and Valentine’s Day and their supply chain remains largely the same, except for the increased volume on those holidays so if the day-to-day efficiencies are optimized, the likelihood of failures happening on the busiest days can be drastically reduced.

Read more How incorporating IoT into the cold supply chain could save florists millions this Mother’s Day

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How IoT logistics will revolutionize supply chain management

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As with many other areas of the economy, the digital revolution is having a profound effect on delivery logistics.

The combination of mobile computing, analytics, and cloud services, all of which are fueled by the Internet of Things (IoT), is changing how delivery and fulfillment companies are conducting their operations.

One of the most popular methods for fulfilling deliveries today is through third-party logistics, which involves any company that provides outsourced services to move products and resources from one area to another. Third-party logistics, or 3PL, can be one service, such as transportation or a warehouse, or an entire system that maintains the whole supply chain.

But the IoT is going to change how this process operates. Below, we’ve outlined the impact of IoT on supply chain, and how IoT management will transform inventory, logistics, and more.

Internet of Things Supply Chain Management

One of the biggest trends poised to upend supply chain management is asset tracking, which gives companies a way to totally overhaul their supply chain and logistics operations by giving them the tools to make better decisions and save time and money. Delivery company DHL and tech giant Cisco estimated in 2015 that IoT technologies such as asset tracking solutions could have an impact of more than $1.9 trillion in the supply chain and logistics sector.

And this transformation is already underway. A recent survey by GT Nexus and Capgemini found that 70% of retail and manufacturing companies have already started a digital transformation project in their supply chain and logistics operations.

Asset tracking is not new by any means. Freight and shipping companies have used barcode scanners to track and manage their inventory. But new developments are making these scanners obsolete, as they can only collect data on broad types of items, rather than the location or condition of specific items. Newer asset tracking solutions (which we’ll get into shortly in the next section) offer much more vital and usable data, especially when paired with other IoT technologies.

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