Global supply chains: skating on thin ice

Poornima Ramaswamy at Qlik explains how data can help strengthen supply chains

The last two years have been a significant wake up call to the world about just how precarious our supply chains have become. Supermarket shelves, petrol stations, car showrooms and DIY stores have been noticeably empty.

In desperation, many have turned to hoarding certain items, leading to eventual oversupply and waste in some cases. In others, shortages have ground production to a halt, such as the semiconductor-chip shortage. Driven by high demand for devices during lockdown, without enough chips to go around carmakers were forced to stop production lines when demand for cars increased again.

The impact of this precariousness is being felt by all – from consumers to businesses. In a recent article on the topic, The Economist explained that “supply chains have seldom featured in companies’ earnings reports over the three decades since globalisation took off in earnest…this earnings season, though, covid-induced shortages are among the first problems mentioned by many firms”.

These problems aren’t going to go away overnight so organisations need to put themselves in a position where they can anticipate the impact of these events and implement proactive action whenever they occur.

To do this, they need to get better at using the data they have at their fingertips and channeling it through analytics data pipelines to navigate the unknown with informed insights. But how do informed insights, and the data pipelines that enable them, work in practice when it comes to supply chains?

Enabling real-time agility for the digital economy

In March 2021, a container ship blocked the Suez Canal, holding up around $9.6bn of trade each day. No one would have predicted that one ship could block the Suez Canal for days at a time, creating a domino effect of global supply chain disruptions.

In these unexpected situations organisations need to equip themselves with the tools to make decisions in real-time – assessing the likely impact and what actions will need to be taken to mitigate it.

It’s an advantage that dried fruit and nuts supplier Whitworths is particularly aware of when faced with the unexpected – “the food industry’s unpredictable, and bad weather in one country can have a massive effect on what’s going on with us, so we must be able to react to things”.

To make in-the-moment decisions, organisations need to be in a position where they can deliver up-to-date information to the right user at the right time, in a way that enables them to act.

That means bringing together analytics, collaboration, automation and action orientation through Active Intelligence. This is a state of continuous intelligence from real-time, up-to-date information designed to trigger immediate actions. It allows for situations to be recognised, their impact understood, and responded to as they unfold, rather than mitigating the effects after the fact.

Building transparent, collaborative supply chains

This modern approach to data analytics pipelines lends itself well to supply chain departments. They collect tremendous amounts of data, but most of the data that could guide decisions and actions isn’t analytics-ready or accessible.

By freeing data from its siloes and in real-time, modern data analytics platforms can enable as many people as possible to access the data, enrich it, create derivative data from it, and discover insights that can be consumed anywhere.

And collaborated on. In an uncertain market, with increasingly complex and distributed supply chains and unforeseen disruption around the corner, it’s more important than ever that stakeholders are tightly coordinated and can use the end-to-end visibility created by analytics data pipelines to better collaborate.

This was particularly important for UK-based home improvement retailer Wickes and its suppliers, for which it wanted to enable greater visibility, engagement and transparency of sales, finances, stock movements and marketing through its i-supply solution. Its suppliers can now “get to know and understand how you obtain your data, how you consume data and your frequency of use”, allowing them to better plan and move supply and stock to the correct Wickes Stores with more accurate forecasting and opportunities.

Data analytics and BI are essential to understanding a firm’s immediate need in the supply chain when a crisis such as the Suez Canal blockage happens. But, as Wickes demonstrates, they can also help predict whether a shortage or another supply chain issue will have secondary or tertiary impacts on the business.

The computer chip shortage I mentioned previously is a good example of this. This kind of predictive analytics isn’t possible with just experience and gut feel, it needs real-time data to be able to understand all of the correlations and then figure out whether the correlation leads to causation or not.

Staying ahead of disruption

Parah Jain, global head of shipping and ports equity research at HSBC, recently stated that the pandemic has revealed “how lean the supply chain has become. And there is little margin of error”. Organisations that free and use data to keep ahead of supply chain disruption and drive proactive action are far more likely to thrive in this uncertain world where just one small mishap can have damaging ripple effects.

Investing in a data analytics pipeline that supports a culture of informed action in supply chain management will allow organisations to apply insights now for short-term benefits and also set the foundations for long-term success.

Poornima Ramaswamy is Executive Vice President of Global Solutions and Partners at Qlik

Main image courtesy of iStockPhoto.com