The 5 Digital Supply Chain Challenges Every Business Should Plan For Before Their Next Fiscal Year

5 min read

Nirav Patel is President and CEO, Bristleconeleading the way in supply chain transformation and digital resilience.

Supply chains are complicated, typically consisting of a number of complex factors and a large network of players. Adding to the everyday challenges supply chain professionals face, disruption has become the norm in the global marketplace and customer expectations are on the rise. In order to be productive and successful, businesses have to operate seamlessly with their teams, providers, partners, customers and other stakeholders. Doing so requires navigating and mitigating supply chain challenges in a way that not only improves their efficiency but also delivers exceptional customer experiences.

There are a number of key challenges driving today’s supply chain trends. Here are the 5 supply chain challenges every business must plan for before the coming fiscal year.

Fragmented Data Across Network Nodes And Limited Visibility

Data fragmentation, ie, the scattering of an organization’s data stored in a variety of disparate sources, creates a number of challenges, namely limited visibility. Fragmented data makes it difficult, sometimes nearly impossible, to protect and manage digital assets. It also creates enormous challenges toward gaining a comprehensive view of available data and the global visibility required for analytics and crucial decision making. In many cases, the equality of the data in storage means it is too large for traditional systems to process, the speed at which new data is amassed adds to the challenge and the variety of data types means greater complexity in processing. Plus, data fragmentation is costly.

The solution is the consolidation and structuring of all data sources via a suitable data system structure and design, thereby turning fragmented data into an indispensable asset. Viable solutions—data warehouse or data lake—with the help of AI supported by machine learning can enable effective data mining, increased visibility and enhanced analytics. With data fragmentation addressed, businesses can easily identify challenges as well as opportunities.

A Multitude Of Internal And External Risks, Including Global Events

In today’s global economy, internal and external risks abound. The last few years have created a new era—one of unpredictability—which promises to affect supply chains now and well into the future. Global events, like the pandemic with its continuously emerging variants, resulted in new border restrictions with more red tape as well as shortages of both materials and labor and ever-increasing costs. In addition, calls for environmentally sustainable practices put added pressure on an already strained supply chain.

Preparedness is the key to meeting ever-evolving global challenges, and digital transformation can help by connecting systems and enhancing communication and visibility across the entire organization. The implementation of new, innovative practices means data can be leveraged for agility in decision making to increase resilience in light of major disruptions and build solutions to complex challenges.

Constantly Changing Buying Behavior and High Expectations

Rapid fluctuations in demand and buying behavior and higher-than-ever customer expectations require supply chain improvements not only in speed of delivery but also in overall quality and service. Even so, the supply chain industry continues to face greater disruption. Speed ​​and quality are now on equal footing with price from a consumer perspective. And alongside consumer demands for speed and quality come safety regulations and a variety of compliance regulations, which vary from place to place. To top it all off, environmentalism and sustainability are in high demand by today’s consumers.

Digitization can help businesses face these challenges by focusing on automation and business intelligence and supporting supply chain processes. Automation speeds up processes, reduces manual efforts, reduces human error and allows team members to focus on areas where human expertise is most valuable.

Tug Of War: Business Process Control Vs. Collaboration

Business process control, the checks and balances, as well as the analysis of business processes, allow for not only problem-solving but problem prevention and should go hand-in-hand with collaboration rather than be in a continuous tug of war for overall control . Business control ensures that everyone understands company procedures and goals and, when partnered with collaboration, allows for higher performance, greater efficiency, faster responses to disruptions and better solutions to challenges.

Shifting from the ongoing tug-of-war between business process control and collaboration to one in which both processes coexist promises greater success with sound decision-making and forward-thinking actions that together mean better overall supply chain performance and productivity.

Reactionary Step-Change / Single Variable Improvements

Continuous improvement is needed for optimized supply chain processes. The past few years have been filled with reactionary change—making changes to move forward based on current and evolving circumstances. While reactionary change is sometimes required, it can lead to unwanted compromise to company goals. Intentional changes look at the big picture and prepare for future changes, aligning with the values ​​and goals of the organization. In either scenario, step-change improvements can ensure operations continue at the level the company expects.

Small incremental improvements can act as a cycle for ongoing refinement where changes are relatively simple and value-driven with minimal risk. Step-change improvements require greater reconfiguration of processes to improve systems, such as implementing new competencies or enhancing workflows. Larger changes require re-engineering, which transforms an organization. While small refinements and large re-engineering are both common in supply chain transformation, step-change improvements work as complementary practices to drive overall performance.

Ongoing supply chain challenges can be resolved by digital supply chain solutions that ensure visibility, information exchange, effective data aggregation, collaboration, analytics, automation, innovative practices and step-change improvements. We must work towards having digitization and humanization working together to solve these challenges. Companies that see digitization as not an end-all solution in itself but as an extension of the capabilities employees can provide will buffer themselves against future disruption and limit their future challenges—ultimately leading to an antifragile supply chain that thrives on change.

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