Four tech trends that can improve supply chain efficiency

28 January 2022

Only 6% of leading companies have fully embraced digital transformation in the way they buy and sell services, according to a report.

The report, by Sourcing Industry Group and AI procurement platform Globality, included a survey of more than 120 global procurement leaders that found 50% of procurement specialists believed their companies were “laggards” when it came to digital transformation. 

Dawn Tiura, SIG chief executive officer, said: “Organisations who take proactive measures to transform their current procurement processes and operating models will enjoy considerable competitive advantage in a rapidly changing market, both now and well into the future.”

Only 15% of organisations believed they were either “best in class” or “industry leaders” when it came to digital transformation of procurement processes and operating models.

Keith Hausmann, Globality’s chief revenue officer, added: “The average Global 2000 company spends over £4 billion a year on services, and all of it can be spent smarter and better.

“These findings highlight the need for companies to utilise the sophisticated, AI-powered technology that now exists to enable fair, competitive, and sustainable self-serve sourcing.

“Through digital transformation, procurement can create far more impact on a company’s profitability, as well as help enable its ESG agenda.”

Meanwhile, a report by Transport Intelligence (Ti) has identified four tech trends to be incorporated into supply chains to improve efficiency.

1) Digital twins

Digital twins are digital representations of the real world. According to Ti, they have the potential to drastically improve efficiency in supply chains and save costs. 

“Being able to replicate logistics operations in the virtual world in advance, can help to identify likely problems before they impact them in reality,” Ti explained.

Digital twins can take a long period of time to span across an entire operational landscape, and may require difficult conversations with service partners who may be reluctant to give the required operational transparency needed for the technology to be successful. 

The technology provides a holistic view an organisation’s operations and supply chains, allowing operators to redesign and adjust process flows to real time data.

2) Machine learning

Machine learning combines different services from AI and cloud data to provide predictive analytics. 

Machine learning systems can be particularly effective in areas including market trend analysis, sales forecasting, sales lead qualification, prospect analysis, and real time operational performance.

Ti also says such technologies can help spot anomalies faster than humans by monitoring operational processes, avoiding problems and suggesting alternatives. These systems are also able to process and analyse data instantly from across the supply chain, enhancing operational performance and profitability.

3) Simplifying network structures

As organisations grow, technology systems become more complex as they connect to partners and customers through network interfaces. This can increase cyber security risks, as interfaces between networks are a significant risk point.

As a result Ti said it was seeing a growing trend of companies looking to simplify network structures by ditching complex network “jungles” consisting of legacy systems and services running on cloud platforms.

By simplifying structures, companies can reduce the opportunity for hackers to attack systems. Ti said it expected to see several companies switch to exclusively using cloud service platforms, or maintaining a small number of internal systems. 

It said a cyber security attack on one of the world’s largest shipping companies, Maersk, in 2017 highlighted the risks of attempting to maintain a mixture of old and new technologies. The attack “came very close to destroying the company” by delaying cargoes and preventing Maersk accepting new orders.

4) Continuous cyber monitoring

While many companies undertake cyber security audits as part of their yearly general audit, Ti says continuous cyber monitoring will rise to detect potential threats to digital supply chains.

Many cyber monitoring services now apply machine learning tools to identify network threats as they appear. Ti says there are multiple benefits to this: not only do they detect threats sooner and ensure the overall safety of supply chains, but they can also learn as attackers modify their techniques and capabilities as defences get stronger.

Ti said: “This is a trend that is here to stay and as the world becomes more dependent on digital platforms, awareness and appreciation of cyber risks and good security practice will become the norm.”

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