How does the fish get from the sea to our tables? Is the wood for the table certified? Where are the chairs, notebooks and webcams I ordered? When will my customised car be available? When will it be manufactured? Which transmission will be used? Where is the production line? And in which factory? Who can track all this? And how? And from where?
A growing number of consumers want to know where the products they are buying come from and how they were made. Businesses have to know that transparency in the supply chain is essential to ensure that their products arrive at their intended location reliably and just in time no matter what. Circumstance can, however, be very unpredictable as complex global supplier structures have to be grappled with. A complete overview is critical in order to be able to react quickly when there are bottlenecks, outages or in the event of a force majeure as well as to have other options on the back burner just in case. It’s time for a fully digitalised, integrated supply chain management.
The company followfood is a pioneer in the tracking of food-related goods. It has even built its business model around being a reliable provider of ecologically certified salmon and tuna. It may have started with fish, but now the company also sells pizza, vegetables, vegan meals and ice cream and business is booming. It’s a concept for our age and is exactly what the environmentally-conscious consumer is looking for.
Of course, tracking a fish is relatively easy. You need to know where it was caught or bred, how it was transported and prepared, but that’s about it. It’s even quite easy to see the ingredients and supplier information on frozen meals. For manufacturers producing products just in time, however, things are quite a bit more complex. The number of parts, suppliers and sub-suppliers located in several countries alone results in a multitude of involved parties, interfaces and dependencies.
If one thing goes wrong, like a quality issue with one of the parts or a bankrupt supplier, the problems will quickly snowball. External influences can also have an impact. These could include international trade restrictions due to Brexit or as a result of sanctions and boycotts. Supply chains can also be brought to a grinding halt as a result of conflicts and wars, but also natural disasters and pandemics. Then there are the times when capacities have to be increased practically overnight to cater for urgently needed goods. Many companies recently gave over their entire production capacities to produce masks and disinfectant and the production and distribution of vaccines is an existential challenge as we speak.
There are also the issues of carbon emissions, environmental protection and sustainability, as well as ensuring production environments are fair and guarantee human rights. Regardless of compliance with required standards, when you take into account the number and complexity of potentially relevant supply chain parameters, it seems like an impossible task to keep track of them all.
To have even some semblance of control, it comes as no surprise that consistent digitalisation that links up all parties is a necessity. In the majority of production companies, ERP, PLM, ECM and CAD systems are in use and the same is probably true in supply chain management. The focus is on in-house processes with the aim of producing and delivering the best possible and consistent quality as cost-effectively, efficiently, flexibly and reliably as possible. The procurement of raw materials and parts, distribution and logistics also come into play. The level of integration and the intelligence of the programs in use are also very different. How are data collected, processed, lined and prepared? What is automated? How are analyses carried out? Is artificial intelligence in use? Can processes be virtually simulated? And last but not least, are data exchanges with up and downstream partners in the chain regulated?
In a world of high-level networking and various dependencies, interfaces are fundamental. They allow shared data rooms along the digital supply chain so that all parties can remain on track when it comes to the distribution of goods. According to the Federal Association for Materials Management, Purchasing and Logistic’s (BME) “E-procurement 2020” study, the only topics that are higher up on the agenda are smart objects for controlling the flow of materials and big data analytics. For this study, the BME, businesses from a range of industries listed the technologies that they considered to the most important for the future. Making up the rest of the list are machine learning, process mining, robotic process automation, 3D printing and virtualisation/simulation.
So, there’s plenty of work to be done and while everything is feasible, it can’t all be done at once. As the study mentions, there are also in-company hurdles to overcome with the biggest being a lack of transparency into and structuring of internal data, resistance and lack of support from management. This means there needs to be more advocates to the cause sitting at the top table and, from a practical point of view, better organised data structures in order to create a solid foundation to build from. Bechtle’s IT business architects are on hand to offer their support, also in the expansion of integration capabilities, to bring more transparency into the supply chain. And not just for tracking fish.
This post was published on Jun 10, 2021.