How AI and digital technology can help with more effective supply chain management: Sue Williams

These increased inventories, coupled with rising inflation, geopolitical challenges and supply chain delays, have contributed to a rise in expenses for companies across a host of differing market sectors. In turn, elevated costs have impacted customer spending and, as a consequence, the market has become more competitive both financially and commercially.

To move forward and adapt, supply chains need to be flexible and dynamic, supporting a responsive and resilient approach to supply and demand.

Technology-led supply chains will support and allow for sudden and unexpected supply chain distributions and, ultimately, create a more robust supply chain. AI and other digital technologies offer vast solutions to streamline and improve the efficiency and resilience of supply chains.

These include:

● Inventory optimisation - allowing businesses to reduce the risk of incorrect stock levels, spoilage or obsolescence

● Establish greater supply chain visibility - utilise IT platforms to engage with consumers and improve demand forecasting.

● Digital twins - allowing businesses to map and optimise the end-to-end supply chain or specific processes or products to identify savings.

Disruptions to shipping and supply chain logistics, such as those experienced with the Suez Canal, have become ever more present and supply chains across the globe have been left in a fragile state, with delays proving costly for thousands of businesses.

Supply chain segmentation is one strategy businesses can implement to help optimise demand and supply. This involves the segmentation of demand behaviour, analysing and categorising a supply chain into distinct markets, channels and customer groups.

Effective segmentation enables businesses to align supply chains directly with customer needs and wants, identify and reduce waste, increase efficiency and boost cost savings.

Segmentation allows businesses to build resilience and diversification, which is imperative for mitigating the ongoing and future impact of industry disruptions.

All industries are facing increased pressures to improve the sustainability of their business, with pressure being placed specifically on companies to improve the Environment, Social and Governance (ESG) impact of their supply chain.

The most common challenges in supply chains include energy use and emissions, product life and end of life management and consumer awareness. Effective steps that can be taken to improve the ESG of supply chains include:

● Opting for ethical sourcing - start from the beginning and place emphasis on selecting responsibly sourced materials from suppliers who adhere to sustainable practices.

● Reducing waste - replacing high waste materials, processes and practices in a supply chain with sustainable and more efficient practices.

Effectively managing supply chains will not only minimise the impact of disruptions whilst simultaneously offering cost savings and improved ESG.

Seeking expert guidance and staying informed can help businesses to create agile and flexible supply chains, support resilience and drive future business success.

Sue Williams is Managing Director at Hexagon Consultants