Managing the supply chain can feel like rolling a rock uphill—only to watch it tumble down again day after day.
Supply chain management challenges can feel like the burden of Sisyphus. The Greek god was fated to roll a rock uphill—only to watch it tumble down again each time he reached the top.
Supply chain management is a discipline that involves the activities required to plan, control and execute a product, from production to distribution to the customer, in a streamlined and cost-effective way.
But so many variables comprise this supply chain equation, including product supply and demand, weather disruptions in shipping as well as geopolitical events and varying modes of transport that need to be factored in. This is not to mention data insights, artificial intelligence (AI), machine learning, Internet of Things (IoT)-connected sensors that are constantly providing data, automation incorporated into supply chain processes, and of course, workforce skills.
Supply chain managers say that the goal is to use the data to understand these factors and stay ahead of the root causes of supply chain management challenges.
“We don’t want to operate where we are constantly firefighting,” explained Milind Balaji, senior supply chain manager at GP Cellulose, a division of Georgia-Pacific LLC, a manufacturer and distributor of pulp and paper products, based in Atlanta. “If the majority of your day is occupied by just waiting for things to happen, then your supply chain isn’t optimized.”
Ultimately, though, enterprises have conflicting views of the importance of the supply chain to business outcomes. On the one hand, according to the 2018 Deloitte report “The Supply Chain Paradox,” enterprises view supply chain management as a key area for digital investment (62%), but few see supply chain management as a center of business innovation (34%). The gap can put a strain on supply chain managers to deliver the right outcomes.
In advance of this year’s IoT World conference in Santa Clara, Calif., May 13-16, Balaji discussed some of his approaches to managing the supply chain.
“We don’t want to operate where we are constantly fire-fighting.”Milind Balaji, senior supply chain manager, GP Cellulose, a division of Georgia-Pacific LLC
While there are no silver bullets in addressing supply chain management challenges, data analytics can reveal problems as they happen so managers do less problem solving after the fact.
Data suggests that many companies see analytics as the key to greater visibility into supply chain management challenges. In a recent Forbes Insights survey on artificial intelligence, 44% of respondents from the automotive and manufacturing sectors classified AI as “highly important” to the manufacturing function over the next five years, while almost half (49%) said it was “absolutely critical to success.”
“We want to use data not only to automate processes that are manual but also to predictively tell you what’s going to happen with a level of certainty that you cannot have manually,” Balaji said.
His industry is moving toward a world where everything is connected. “Everything on the floor talks,” Balaji said. “And that is the big goal. Get the supply chain to talk to you.”
Increasing connectivity changes how maintenance takes place. A production line pump might traditionally be monitored every 500 hours and not deviate from a schedule. With machine learning, IoT sensors and data analytics, that pump can be monitored regularly, and certain data indicators will highlight the need for maintenance.
“An alert will say, ‘You should be looking at this’ rather than monitoring the pump on a set schedule,” Balaji said.
Data is also becoming central to customer experience. Traditionally, companies like GP Cellulose didn’t give customers much visibility into order tracking and so forth, but the “Amazon effect” has raised the bar for virtually every company to provide shipping data more readily to customers.
“Customers would love to log in to see where their shipments are without even talking to us,” Balaji said.
Balaji indicated that emerging technologies such as 5G—the next generation of cellular technology designed to improve network speed and performance—will upend the manufacturing industry by enabling network speed and performance. As a result, supply chain managers will be able to view critical data in real time without sending that data round trip to a cloud. Instead, that data can be viewed or analyzed natively on a device at the edge.
“We would revolutionize the manufacturing world if we had true 5G reliability and scope,” Balaji said.
Again, data shows that companies want to mine the potential of 5G. Among respondents to a recent Gartner survey, 66% have plans to deploy 5G by 2020. IoT communications remains the most popular target use case for 5G, with 59% of organizations surveyed expecting 5G-capable networks to be widely used for this purpose. The next most popular use case is video, chosen by 53% of the respondents.
One vision for manufacturing—one that isn’t too far off— is a “true lights-out manufacturing facility” run by robots with little human intervention.
Balaji noted that an increasingly interconnected industry not only yields better data insights but also creates new vulnerabilities.
“Robots are running the facility picking cases, taking packages to shipping dock, putting them on the truck—that will start growing," he said.
“The double-edged sword here is that the more data you have transmitting to you, the more data that is available for others to look at,” Balaji said. “That is a huge concern in terms of how networks will be secured in the future.”
Another key issue: Automation brings production efficiencies that threaten the stability of today’s workforce, potentially displacing workers. While Balaji and others see automation as ultimately generating new roles, where AI enhances human decision making, he acknowledged that there will be a transitional period. Companies have to pave the way on reskilling the workforce.
“How can we operate with this lights-out philosophy and do it well, but also how can we benefit people that have been displaced in the process?” Balaji asked rhetorically. “We want to have long-term benefit for society and give back to it. You can’t just take and disrupt and hope that it all works.”
Balaji said the key is institutionalizing education and talent grooming in company processes to close the skills gap,addressing what by some estimates could amount to the disappearance of 30% of hours worked today, according to McKinsey Global Institute analysis.
“We have a lot of programs that support emerging talent,” Balaji said. “Otherwise, it would just be, ‘Let’s cut, let’s automate and no one cares.’ We are getting people from the ground up.”
Lauren Horwitz is the managing editor of Cisco.com, where she covers the IT infrastructure market and develops content strategy. Previously, Horwitz was a senior executive editor in the Business Applications and Architecture group at TechTarget;, a senior editor at Cutter Consortium, an IT research firm; and an editor at the American Prospect, a political journal. She has received awards from American Society of Business Publication Editors (ASBPE), a min Best of the Web award and the Kimmerling Prize for best graduate paper for her editing work on the journal article "The Fluid Jurisprudence of Israel's Emergency Powers.”