AI at the Centre of the Great Supply Chain Disruption

Great Supply Chain Disruption

Technology has always had a significant impact on supply chains. In 2023, it is going to be more important than ever as the “Great Supply Chain Disruption” continues to challenge organisations around the world, according to SAPICS (The Professional Body for Supply Chain Management in Southern Africa).

War, raw materials shortages, rising energy costs and extreme weather conditions are just some of the factors that will disrupt global supply chains in 2023, warns the non-profit organisation that aims to elevate, educate and empower the community of supply chain professionals across Africa. “In South Africa, the electricity crisis will continue to challenge businesses across all sectors. The negative impact on energy-intensive and irrigation dependent agricultural industries in particular will resonate through the entire supply chain – from the farm to consumers, who will have to pay more and have fewer competitive options available on supermarket shelves,” says SAPICS president MJ Schoemaker.

Technology will play a critical role

Technology like artificial intelligence, machine learning and intelligent robotics will play a critical role in supply chain’s response to the ongoing disruptions. “This is because processing huge datasets in real time demands these capabilities. There is growing recognition of the imperative to mitigate disruption through greater visibility, synchronised planning and execution, data-driven decision- making, predictability and supply chain agility. All of this is enabled by big data and analytics,” Schoemaker explains.

The latest supply chain trends report compiled by the US-based Association for Supply Chain Management (ASCM), of which SAPICS, is a Premier Elite channel partner, unpacked the latest supply chain trends that businesses must leverage to optimise execution, reduce risk, and enhance agility and responsiveness in their supply chains. The report ranked big data and analytics as the most important topics in supply chain in 2023. The implementation of predictive and prescriptive analytics — as well as advances in big data, algorithms and robotics — will have wide-reaching effects in 2023, the report found.

Using smart logistics solutions, based on the internet of things and next-generation robotics, will be a focal point of supply chain design. The ASCM report foresees more supply chain transformation via intelligent robotics in 2023. “Labour shortages, supply disruptions and demand surges are compelling organisations to tap into robotics. Driven by rapid technological advancements and greater affordability, both mobile and stationary robots will assist workers with warehousing, transportation and last-mile delivery tasks. Safer, more efficient warehouses, with fewer people in them, will drive down costs. Although the initial capital investment will be high, the cost savings are primed to be dramatic.”

According to Schoemaker, there is certainly a robotics trend in South Africa but she says that loadshedding may put a spanner in the works unless businesses have their own energy source. “In South Africa, finding the balance between efficiency and employment is also difficult,” she adds. “Many companies are cross skilling their staff to be more diverse and therefore are able to place them in other roles.”

Data security and cybersecurity are also hot topics that will impact supply chains this year. The more digital supply chains become, the more vulnerable their global networks are to cyberattacks. “This interconnectedness means supply chain partners can inadvertently expose each other and their customers to privacy breaches, identity theft and worse,” ASCM’s report noted. More organisations will invest in redundancy, firewalls, advanced anti-hacking technologies and employee training in 2023.

Digital supply chains were ranked highly in ASCM’s key trends in 2023. “Leading organisations will be advanced in their adoption of digital supply chain capabilities. If not, they will be left behind by agile, more proficient competitors,” cautions Schoemaker.

Continuous logistics disruptions in 2023 will drive the need for constant master data maintenance, as well as refined logistics parameters and inventory levels. “Logistics organisations must create the conditions necessary for a seamless interaction among multiple transportation networks and their digital replicas,” ASCM’s report recommended.

“While supply chain challenges will continue in 2023, we can expect to reap the benefits of lessons learnt in recent years, including the importance of investing in technology that can optimise supply chains,” Shoemaker concludes.

This article first appeared on IT News Africa.

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