Introduction

Introduction

Supply chain innovation

Supply chain innovation

The manufacturing industry has a history of being changed and reinvented by technological advances in process and communications. Now, new solutions that leverage AI, blockchain, and the Internet of Things (IoT) are being leveraged by the leading and fastest growing companies in the industry to transform the manufacturing supply chain and related transport and logistics. Reliance on paper forms and the clashing of disparate systems can give way to better transparency across the value chain to help reduce, mitigate, and even eliminate, transport mistakes and delays.

Avoid disruptions

Avoid disruptions

1.5 min read

IMAGINE: You receive a call at 5pm from a supplier saying that the container you need this week is not going to make it, thanks to an equipment failure at the port of entry. You’re never going to make next week’s launch without those parts. Your assembly line will grind to a halt in 3, 2, 1.

In our global economy, disruptions in logistics—whether upstream supply chain or downstream delivery—can be detrimental to a business. Delayed part shipments can wreak havoc on manufacturing plans and have ramifications that reverberate both down to the customer and across to other product lines. Errors in the logistics networks, equipment failures, parts shortages, customs delays at ports or border crossings, inclement weather, and even political disruptions can cause a domino effect across the factory floor, possibly affecting an entire business ecosystem.

Thanks to an advanced, AI-based data and analytics logistics program, the manufacturer noted above was notified of the possibility of the shipment delay the day before, and was able to initiate a resolution, allowing the company to get ahead of the disruption. But it took diligence and trust in a new technology to create a better system.

By now, most companies in the industrial space are aware that information from their process and operations can help guard against failures and make production more efficient. For example, Frost & Sullivan estimates that, on average, 35 percent of global automotive plants will be “smart factories” by 2025¹—meaning that automotive OEMs will need to spend 8 to 10 percent of their revenues on these new or upgraded facilities.

More than 85% of CSCOs say it is already exceedingly difficult to predict and proactively manage these disruptions and risks.²

Respond quickly

Respond quickly

2 min read

IMAGINE: Coordinating a large and critical shipment from overseas. This shipment requires sign-off from 30 unique organizations and up to 200 communications—not an unusual occurrence. However, one of these organizations has lost a form and suddenly, a single weak spot has resulted in a month’s delay while those parts are stuck at a port.

Receiving the message “shipment on hold,” without knowing “why?” is a normal, though distressing, experience for many companies.

What if you could leverage a technology that removed the mystery behind the weak spots, a technology that provided traceability and transparency of the entire shipping process? What if the question of “why” could be answered immediately through automation so that a resolution could be provided swiftly? Blockchain is the answer to these pain points in the supply chain process.

While many aspects of the supply chain process seem the same, the use of blockchain can radically alter results. In the scenario above, the parts supplier readies its product for international shipping and the shipment is added to blockchain. As the container awaits transfer to a port, officials submit approvals electronically. Blockchain confirms the transaction and self-executes the smart contract, releasing the shipment. The container is loaded on to the ship and is on its way. All parties have end-to-end visibility of the container’s progress through the supply chain. The container arrives at the destination port and clears customs. You receive your parts on time and sign electronically. Crisis averted.

The ocean freight industry accounts for 90% of goods in global trade, but transport remains highly dependent on a flood of paperwork that is never digitized.³ Manual and inefficient processes in the supply chain can lead to significant delays and mistakes with dire and expensive consequences for many companies and their customers. On the whole, platforms, systems, and designations remain firmly entrenched in old silos. For example, a freight forwarder may use a different ERP system than a port or the end producer. Each participant may use different database structures and terminology or may take records with different levels of detail. Spreadsheets and paper-based record keeping are still prominent across many aspects of supply and logistics. Because of this, as soon as one party emails a spreadsheet to a counterpart, the information is already out of date and difficult to trace, confirm, and secure.

Build a better supply chain

Build a better supply chain

2.5 min read

IMAGINE: At any given time, you have six thousand parts being shipped or in transit from Los Angeles, Shanghai, Singapore, and Rotterdam. Your suppliers, customers, and executive management are expecting flawless transportation. If communication is lost to just one of the trading partners, a domino effect ensnares the entire system and brings it to a grinding halt.

Blockchain enables multi-party visibility in the supply chain with trust, transparency, and traceability, yet line of business users struggle to access and interpret supply chain data. Because of this, it is important to realize how new technologies will modernize the business network and unlock supply chain data, delivering better client experiences.

The huge disruptions that could arise from logistics glitches keep the above scenario top of mind. According to a key survey of the industrial market, 84% of Chief Information Security Officers stated that “lack of visibility” across their supply chain was the “biggest challenge” they are currently facing.⁴ Digital business networks have long been tasked with securely transferring high volumes of business data from one company to another. Purchase orders, invoices, shipping notices, and the like need to move from supplier to customer, across many supply and logistics channels. The volume of such data is immense, particularly in the industrial space. Transmitting information electronically greatly reduces the time and inaccuracy associated with manually gathering, sending, cataloging, and acting on business information. Although digitally transferring business data has been in place since the early days of the technology, the market has not evolved significantly in the last few decades. Transmitted data is still typically in its raw form, and users of this information need technical experts to understand it.

Providing line of business users direct access to the data they require, in a format they can understand and use.
Reducing, even eliminating, the extraneous step of having the tech team interpret data, run reports, and answer specific data related questions.
Lowering time and increasing accuracy in response to customers or internal stakeholders regarding payments, invoicing, POs, bills of materials, transportation of goods and other business information.
Allowing for analysis and reporting at a “big picture” level, such as seeing relevant invoices or payments within a certain transaction lifecycle, or POs across transactions.
Expanding benefits beyond the enterprise by giving customers and suppliers instant visibility to timely events such as PO receipt acknowledgement, automated time to fill agreement, and shipping information.
Providing analytics and artificial intelligence for additional benefits from understanding the full breadth of business data, such as predictive insights and anomaly detection.
Improving business metrics with automated PO acknowledgement to reduce disputes and charge backs, or reducing the time to create advanced shipping notices from several hours to a few minutes.
Using a managed service to save the capital costs of building a solution in-house, and also saving on long term software costs by leveraging the cloud.

Better access and insight into existing data can help you reduce the complexity of your supply chain.

Conclusion

Conclusion

Next steps

Next steps

IBM offers dynamic solutions to help transform your business by better understanding existing data, providing clearer visibility across your entire supply chain, building trust in transactions and processes, offering superior customer experiences and supporting growth in new markets and revenue streams. Be a part of the supply chain digital revolution.

Read the Frost and Sullivan white paper to learn how to start your supply chain transformation.

¹ ⁴ Frost and Sullivan, Automotive Industrial Internet of Things (IIoT) Growth Insights, October 2018

² IBM eBook, The Future is Here (PDF, 3.2 MB), April 2020

³ IBM infographic, The paper trail of a shipping container, 2017