The supply chain is a critical aspect of any business, as it encompasses all the activities required to get a product or service from the supplier to the customer. Well-managed supply chains can help a business increase revenue by improving the efficiency of its operations, reducing costs, and increasing customer satisfaction.
“Global business leaders are focusing their investments on the areas that will continue to drive their business transformation. They should seize the opportunity that technology offers, not only to make their business more efficient, sustainable, and resilient, but more importantly to enable long-term growth opportunities.” said Aiman Ezzat, CEO of Capgemini.
According to the latest research report by Capgemini, organizations prioritize their investment toward diversification and digitization of the supply chains.
The report shows 43% of companies intend to grow investment in the supply chain, while 39% plan to boost investment in technology to decrease expenses and drive business transformation.
Worldwide disruption in the supply chains is seen as the top risk to business growth for 89% of organizations, ahead of rising raw material prices (67%) and the energy crisis (64%).
More than half (54 percent) of organizations acknowledge that their supply chains have altered significantly in the past two years.
Capgemini’s research found that 45 percent of companies absorb a significant portion of the cost increase due to resilience, sustainability, and customer-centricity efforts while remaining unaware of their true end-to-end baseline.
The supply chain crisis
The COVID-19 pandemic, the US-China trade war, the Ukraine-Russia war, natural disasters, floods, etc have not only disturbed the infrastructure and company’s production but also disrupted the flow of goods and materials, making a significant impact on businesses and consumers across the globe.
Technology can improve supply chains
These crises have highlighted the importance of supply chain resilience and the need for businesses to have contingency plans to mitigate disruptions’ impact. This includes diversifying suppliers, digitizing, and investing in advanced technology to improve supply chain visibility and agility.
The priority actions to gain supply chain diversification will include onshoring or near-shoring to increase production bases closer to demand, regionalizing supplier bases, and diversifying the manufacturing base.
Businesses can use data analytics and machine learning to predict customer demand, identify trends, and forecast future supply chain needs. This helps firms proactively adjust their operations and inventory levels to meet customer demand.
Technology such as RFID, GPS, and IoT sensors can be used to track products and materials throughout the supply chain, providing real-time visibility into inventory levels, location, and movement. This helps businesses make more informed decisions about inventory management and logistics.
AI and Machine Learning can automate repetitive and time-consuming tasks, such as data entry, order fulfillment, and inventory management, increasing efficiency and reducing errors.
Also Read: Supply Chain Attacks – The Open Source Effect
