A New Age Supply Chain

A New Age Supply Chain

Technology is advancing in the supply chain industry, and Hitachi Consulting is at the forefront of the movement.

A catalyst of positive business change, Hitachi Consulting assists its clients through enabling superior operational performance and helping them realize their business vision. Hitachi Consulting is transforming the way businesses engage with customers and employees through technology, as the company’s customer experience solutions help clients achieve better engagement and interaction across multiple channels and devices.

Meanwhile, Hitachi’s employee experience solutions have assisted in better employee productivity and happiness, driving innovation and efficiency. With the technological landscape always changing, Hitachi stays on top of the latest trends and innovations.

Internet of supply chain

The Internet of Things (IoT) is connecting daily, mundane objects to the internet, transforming them into the extraordinary. When an object can be represented in a digital space, it can be monitored and controlled from anywhere, as well as feed realtime information from its operator or owner and environment constantly

Through this connectivity, data can be gathered from more places and provide more ways to increase efficiency and asset utilization, innovate product development, streamline the supply chain, enhance the customer experience and improve safety and security.

Although IoT hasn’t quite made a major impact on the manufacturing process, the beginning of a fundamental shift is coming. IoT  will enable real-time data to be shared from the prospective customer, manufacturing and logistics environments, and products already in use.

“I think we’re on the cusp of a breakthrough,” said Hitachi Consulting Australia Director of Supply Chain Owen Keates. “It will radically change things.

“Ultimately, you’re going to have far more visibility of product movement, as well as productivity and scheduling within operations, You’ll be able to track where a product is. In terms of supply chain planning and optimisation, real time visibility and analysis of data will provide better decision making around delivery, changing the game significantly.”

“And that is just the beginning,” Keates continued. “Adding the ability to crunch vast amounts of customer and customer behaviour data, we will be able to move toward anticipatory shipments of goods, with the ability to adjust the last mile routing to fulfill the actual order.”

 Keates also pointed out that IoT-enabled advanced monitoring of products will enable predictive maintenance and shipment or 3D printing of service parts if and when they are needed.

The cloud of the future

As more devices and processes get connected via the Internet, risks to cyber security also increase. Big businesses such as Hitachi are aware of these risks and significant developments are underway to improve cyber security for IoT systems.

“Cloud-based solutions are the absolute future,” said Keates. “It’s clear that not only the big enterprise resource planning (ERP) providers are moving to the cloud, but also the on-premise servers probably won’t be there in the future. Everything will be cloud based.”

Optimising and transforming a successful supply chain starts at the very top. Often, the best way to start is have discussions about the importance of supply chain at the C-suite level.

It then turns into a process of understanding the strategy and how it needs to be spread through the company.

“Today, the best-in-class companies have don’t just recognize the supply chain is a critical part of their business,” said Keates. “These companies comprehend that their entire business is a supply chain in and of itself, and they take ownership and drive the overall performance of that supply chain end to end.”

Also important is intimately understanding the customer, which Keates believes is the core of major businesses like Google and Facebook; meanwhile, more traditional players have started to realise and better use the treasure trove of customer behaviour data at their disposal.

“Understanding customer segmentation and buying behaviours through the use of deep analytics sets the scene for true supply chain transformation, because ultimately you have to determine the appropriate service levels for each segment, not only in terms of reliability, but in terms of responsiveness,” said Keates.

“For us, it’s definitely about looking at the future,” said Keates. “With IoT, there is so much additional visibility being made available to supply chain management.”

Continually improving

According to Keates, embedding the learning culture within the company and  ongoing continuous improvement is the key to supply chain success.

“There’s an element of foundational best practice that needs to be truly embedded in an organisation. Leading companies embrace the continuous improvement philosophy of examining their current processes, benchmarking with best practice processes and empowering cross-functional teams to implement the changes required to ensure ongoing competitive advantage.

“It is critical that consultants who implement technology solutions for their clients work collaboratively with the clients themselves. This ensures appropriate upskilling and change management for all personnel, as well as effective business process and practices are developed, resulting in overall business success.”  

Consulting for the future

The organizational structure of the company within the next few years will adapt from the setup of a typical manufacturing company, in Keates’ view. He points out that there will be an increased importance of understanding the customer and the need to develop collaboration with both the customer and supplier.

“I think you’ll see more and more process managers and greater alignment of the internal processes to the particular customer segment or product family,” said Keates. “That will be a fundamental change that the early adopters will take on.

And with IoT, there will be a much bigger involvement of the traditional IT role in operations and supply chain functions.

“It will become more practiced as those functions start helping businesses look for breakthroughs. IoT can give them a competitive advantage and the IT systems will be  better powered by cloud-based systems.”

Supply chain management will soon become much more real time and predictive. Keates believes there will be a significant increase of collaboration between the suppliers, the operations itself and third-party global logistics providers.

“Data will be shared and decisions will be made in real time more than ever before,” said Keates. “Part of that disruption can already be seen in the growing on line retail businesses. These businesses are already using the extensive customer browsing and buying data that they collect, to continually improve their product offerings and service levels. You need that visibility to make the right calls to service.”

Owen Keates