Supply Chain Technology Stack: A Digital Roadmap to Resilience

Over the past few years, the global supply chain has resembled less a series of interconnected links than a line of dominoes, with an accelerating force knocking down each subsequent tile. The organizations that have best withstood these opposing forces tend to possess a strong supply chain technology stack.

While technology stacks are common in most industries, the recent series of worldwide supply chain disruptions — from COVID-19 to the Russian invasion of Ukraine and fluctuating oil prices — highlight a pervasive need for organizations to invest in supply chain technology. With a well-planned technology stack in place, businesses can integrate logistics data and pivot quickly, strategically and efficiently when supplier issues or part shortages arise. In calmer times, they can streamline operations and free people from "busy work."

Supply chain professionals across industries are increasingly finding value in data-rich digital platforms. In a global supply chain survey conducted by Jabil and IndustryWeek in January and February 2022, more than eight in 10 (82%) respondents said they have already invested in or plan to invest in supply chain technologies to mitigate future disruptions.

Organizations are increasingly bringing digital transformation technologies (such as cloud, the Internet of Things, blockchain, artificial intelligence and machine learning) to the forefront. In the midst of supply shortages, transportation challenges and more, the pandemic exposed the need for transparent, data-driven systems to streamline complex protocols. By providing this capability through a technology stack, solid competitive advantages emerge — including enhanced supply chain resilience.

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Five Supply Chain Technologies to Consider

Exposing potential weaknesses in a supply chain before they become problems allows for a solutions-based approach. Technology can help organizations strategically prepare for the future's inevitable challenges while minimizing the impact of those disruptions as much as possible. Whether the outside stressor is COVID-19, increased regulations or component shortages, a technology stack designed to meet these threats head-on offers alternatives — different suppliers, components, logistics routes or even different processes to deliver the products your customers expect.

After careful consideration of the business needs, teams should look to solutions that empower resilience and implement the appropriate stack effectively. Successful completion of this aim results in proactive and reactive response, compliance, scalability and efficiency.

How a technology stack achieves the intended benefits is diverse and varied. Multiple categories of solutions exist that serve to strengthen supply chain resilience. Here are five supply chain technologies companies should consider implementing to prepare for the next disruption.

1. Supply chain orchestration

More than a quarter (27%) of survey respondents implemented technologies to manage risk during the pandemic to improve their supply chain performance. This is likely because the events of the past few years have caused many organizations to face a stark reality: Their supply chain was not prepared to navigate disruptions on a massive scale, usually due to a lack of transparency and flexibility built into their plans.

Only 31% of respondents rated their organization's ability to handle disruptions as "excellent," saying they have end-to-end visibility across their supply chain and can adapt quickly. Exactly half rated their resilience as "good," explaining they don't have full end-to-end visibility but have made significant investments in their capabilities, including technology. Nearly a fifth, 18%, said they have only an "acceptable" ability to handle disruptions, lacking the visibility necessary to handle another major event.

These answers hit on the most important element of supply chain risk management — visibility. The purpose of supply chain orchestration and analytics platforms is to use real-time data and intelligence to provide a transparent view into every step of the supply chain and minimize risk. There are no surprises when critical information about materials and products, like cost, availability, locations and lead times are available at your fingertips in one digital platform.

Any supply chain orchestration platform your organization chooses should accomplish three main goals:

• Provide actionable insights driven by real-time data
• Create greater visibility into supplier readiness, security of supply, and inventory
• Allow supply chain teams to work with engineers and other teams cross-functionally to design the most sustainable, cost-effective product life cycle and supply chain

Jabil's intelligent supply chain decision support solution combines expert knowledge and data from supplier relationship managers (SRMs) and global commodities managers (GCMs) with commodity-level market data. Together, these two groups of data are joined to create analytical models that the platform uses as the base to make optimized supply chain decision recommendations and identify potential disruptions in the technology lifecycle.

Another key building block for a truly digital supply chain is the implementation of intelligent procurement.

2. Procurement intelligence platform

Better sourcing, better buying and better decision-making related to commodity management and sourcing opportunities: that is the catalyst of a procurement intelligence platform. A complement to supply chain orchestration technology, the platform continually sifts through data, interpreting it and identifying commodities and suppliers.

Direct and indirect sourcing opportunities become clear with this type of platform. A filler of compliance gaps and an overall time-saver, procurement intelligence platforms operate within comprehensive rules and regulations to streamline a requisitioning and purchase order system.

Many businesses have come to understand the benefits of a data-driven, multi-sourced procurement operation as they've faced component shortages and delays over the past few years. Organizations dependent on a single source or without an intelligence platform in place may have found themselves scrambling for suppliers.

A procurement intelligence platform ensures up-to-date, accurate information is easily accessible. This visible information makes alternative choices clear, allowing for a steady workflow that is as unaffected as possible by delays. When a link in the supply chain breaks, supply chain leaders know what options are available, and the chain can be quickly mended. Every touchpoint on the procurement continuum is made visible, and a business can pivot when procurement channels erode.

In the Jabil and IndustryWeek survey, 46% of respondents said they are extending technological capabilities or sharing technology platforms to increase visibility, all in an effort to improve collaboration with their suppliers.

Suppliers are also facing shortages and delays of everything from labor to raw material. To keep supply chain operations flowing smoothly, long-range demand forecasts generated with the help of intelligent technology are becoming a requirement for OEMs and their vendors.

3. Demand planning and forecasting

One of the major causes of pandemic-era supply chain planning challenges has been unprecedented levels of demand for physical goods — particularly goods that require electronic components and chips.

In an attempt to provide sufficient components and materials for this new level of demand, suppliers have begun requesting significantly more lead time from OEMs — up to 18 to 24 months before requested delivery, instead of the traditional six months or less.

OEMs, in turn, must get a handle on their anticipated demand for a time well into the future and build the possibilities for disruption into that forecast. To meet this new requirement, a full quarter (25%) of survey respondents have implemented demand planning or forecasting technology since the pandemic began, while 54% plan to implement it within the next one to five years. Demand planning and forecasting technology provides component and product alternatives to reduce inventory cost, allowing supply chain managers to make fast, high-quality decisions.

It's important to remember that technology should just be one piece of a resilient supply chain strategy. At Jabil, we look at it through the lens of people first, then processes and technology. So, solid demand planning and forecasting starts with people — ensuring you're picking the right supplier partner that will be able to meet your organization's needs in your timeframe. Once your supplier is in place, collaborate to standardize your processes and implement technology.

There are many worries that might keep supply chain leaders up at night; I don't think a demand forecast should be one of them. Though you absolutely need to create one, you can rest assured that it will be incorrect to some degree. Whether you get it wrong, or your customer gets it wrong, it's never going to be completely accurate.

I think about demand forecasts this way: I drove myself to work today, so I have a car that's working. I've got my updated phone and my laptop, and last time I was at the store, there was food on the shelf. This all points to the fact that supply chains are working even though forecasting will never be accurate. But it's important to double down on investments in demand planning technology to ensure you have your arms around your forecasts to the best of your ability.

One area of the supply chain where you can count on technology to deliver more precise data is the factory floor. Thanks to next-generation connectivity, supply chain teams can more clearly connect the dots between demand for a component, its procurement and its use in manufacturing.

4. Cloud computing and the Internet of Things

With the advancements in 5G that cloud computing enables, which in turn vastly expands the possibilities of the Internet of Things, it's more possible than ever to keep supply chains in constant contact with the factories they're serving. More than a quarter (26%) of Jabil and IndustryWeek survey respondents have implemented cloud computing solutions during the pandemic to improve their supply chain performance, while nearly as many, 22%, have added IoT technologies.

It's critically important to have an enterprise resource planning (ERP) system that leverages this ability to connect to the factories. The factories are where the action happens, generating data that you can turn into actionable insights, intelligence and decisions that drive better supply chain outcomes.

An ERP can integrate into broader Factory of the Future capabilities that rely on IoT connectivity, like artificial intelligence, machine learning, augmented reality and virtual reality. These tools also orchestrate and provide visibility into the movement of materials once they enter the factory, a view of the supply chain that commodity managers traditionally may have lacked.

Edge computing — done in decentralized processors away from traditional data centers or clouds but closer to the device requiring the connection — facilitates the function of these powerful, ultra-low latency IoT devices at the core of this connected future where supply chains and factories work in harmony. Gartner predicts that 25% of supply chain decisions will be made across intelligent edge ecosystems by the end of 2025.