The supply chain is the backbone of several major industries around the world. It is a network of organizations, individuals, resources, raw materials, and technology. Retail, construction, pharmaceuticals, healthcare, gas, and FMCG are some areas that heavily rely on the supply chain.
A well-strategized and managed supply chain is critical for a business's success and profit.
Role of technology in SCM
In the first quarter of 2019, India accounted for the greatest share of internet users' growth. An average Indian spent 7 hours 47 minutes using the internet. Therefore, technology plays an integral role in the Supply Chain process. Be it from the consumer side, manufacturer side, or transportation side.
Supply chain management uses technology on a day-to-day basis. IT can help in tracking shipment, tracking location, traffic pattern, stock, and weather conditions. Therefore, organizations use tech systems like Blockchain, AI, Analytics, and 3D printing in order to manage the supply chain.
Importance of SCM
Boost Customer Services- Customer’s demand to receive the right product abundance and quantity to be delivered with required location availability (i.e., customer satisfaction decreases if the car repair shop does not have the necessary parts in stock and can't fix your car for an extra day or two).
Reduce Operating Costs- Vendors rely heavily on supply chains to deliver expensive products quickly so as not to hold costly store inventories, until and unless it is necessary. For example, electronics stores require a fast delivery of 60" flat-panel plasma HD TV’s to avoid high inventory costs.
Ensure Human Survival- Humans rely on supply chains to supply necessities such as food and water. Any meltdown of these delivery pipeline projects quickly endangers human life. For example, in 2005, Hurricane Katrina swamped New Orleans, leaving citizens with no way to get food or clean water. As a result, a huge rescue of the people had to be made.
Improve Quality of Life- Companies with a fully advanced supply chain operations (modern expressway highway system, extensive rail network, modern building ports and airports) are order to swap goods quickly and cheaply between businesses and consumers. As a result, the economy is growing, and the one thing most poor nations have in common is no or very poorly developed supply chain infrastructure.
Need for a human-centered SCM
In 2017, the Council of Fashion Designers of America in association with DHL and Accenture decided to make their supply chain more human-centric. The new approach was interconnected and had the designers at the center of the process.
It also adopted a human-centric lens in the designing, manufacturing, and delivery process.
Process Ownership- It focuses on clear communication across all networks and channels. Therefore, improving sourcing, manufacturing, and delivery process. Here the organization may work with multiple partners to reduce risk.
Relationship Building- All businesses need to have a strong relationship established with partners and peers. Here the organization shall focus on a relationship-first basis, rather than transaction first. This shall in turn lead to partners' loyalty to the company.
Brand operations- An organization shall establish clear operations and should not reinvent itself continuously. In addition, it should be done in order to avoid unnecessary costs. And to avoid confusion among customers and suppliers. One should have a pilot-based approach before venturing into new channels.
Actionable information- Feedback should be a two-way method between various departments. Suppliers, consumers, and designers should be kept in the loop of the given feedback. A business should keep a check on emerging trends and consumer behavior data in the industry. And make a thoughtful decision after thorough research and prediction.
How to make SCM human-centric?
Logically speaking, technology has a massive everlasting impact in every aspect of supply chain. From procurement of raw materials, transportation, to delivery, and returns. However, by just focusing on technology, companies are on a path of failure. An organization should not only have technology-first approach, they should also keep one the in account- human nature of supply chain.
By acknowledging the role of humans in supply chain, one is not disregarding technology.
Michigan State professor Sriram Narayanan and Goodwill Industries VP Ed Terris appeared in Bob Trebilcock's podcast Talking Supply Chain. They discuss five steps to create a human-centric supply chain in your organization.
Narayanan and Ed suggest tapping of potential labor in the form of people with disability.
In order to be inclusive, organizations have to carefully analyze and set methods that shall maximize the potential of individuals with a disability. Over a period of years, firms have adopted methods and processes. However, it is time they consider employing such individuals and set strategies that put their abilities first.
Brandon White, director of quality assurance and regulatory affairs at Kenco shares his views on technology and humans in supply chain management. He believes that technology will overtake several human-performed tasks, but it will not eliminate all positions. Humans will have control over many deciding factors according to him.
ERP
