Sustainability can not be achieved without knowing the fundamental operational, financial, and commercial factors which affect the supply chain. With that knowledge the next step is to collect, compile, and analyze data to create scenarios which form the basis for business continuity / recovery plans. The complexity of supply chains, really webs, adds to the complexity of this process. The variety of disruptions particularly within a global network, requires a highly developed process built on four pillars of intelligence (collecting and analysis data and information), visibility (systems which provide true end-to-end from the suppliers’ suppliers to the customers’ customers view of every shipment, efficiency (best combination of machine-aids and human actions), all leading to improved agility (rapid response to changes in the supply chain).
Research confirms that Beneficial Cargo Owners (BCOs), typically the consignees, have four expectations of their supply chain partners. First – speed (consistently short transit times), second – transparency (unfettered access to shipment location and status), three – quality of service (on consistent repeatable operations), and finally, four – price of the services (reasonable level to the total landed cost of the product).
Achieving 100% end-to-end, real-time, supply chain visibility is dependent upon getting as many of the stakeholders involved in a digital supply chain. Robert De Muynck, Research V.P. at Gartner has stated that the ‘the focus is no longer on how to create a digital business model, but how to fully execute on a digital platform.’ The focus of these systems is to 1) transfer routine operations within pre-set standards to an automated system and 2) provide human managers with an early warning system which identifies deviations from those standards and provides a broad array of data and information that can be used to create solutions. The result of this evolution is a dramatic move to achieve sustainability within supply webs.
Ensuring sustainability is dependent on access to a wide variety of data and information which is subjected to multi-variate analysis to quickly identify excursions from corporately acceptable standards. The excursions can encompass many variables including financial, operational, commercial, staff development, asset allocation and utilisation, for both the host company and all of the members of the supply webs. Digital supply chains extend beyond traditional limits of logistics systems. The technology is typically cloud-based thus dispensing with the need for high investments in bespoke systems and ensuring controlled, secured access by all partners, regardless of location. Benefits associated with this approach include lower financial and commercial losses, improved matching of assets with operational demands, improved use of staff
So how do you use digital platforms and systems to support sustainable operations?
The first step is to dispense with a siloed, win-lose business structure. The belief that total control of information is the sole source of power is an old and broken concept. Sharing information, based on trust and verification protocols, is essential to meet the first three expectations of the BCOs.
The next step is to employ a holistic view to identify, and assess the impact of disruptions, such as those listed in Table 1. There are a wide array of unanticipated and foreseeable distributions. Assessing the respective probabilities and scale of impact is essential to establish operational standards used to manage the critical supply chains.
The risk assessment process begins with the collection of a wide array of data and information facilitated by employing digital platform. These digital platforms facilitate the management and control of shipments by collecting all information about each shipment as well as information about each of the partners.
Exhibit 2 presents sample reactions to emerging challenges to the operation and design of an air cargo system. Designing the appropriate reactions is based on analysis of the available data and information. The reactions, which should be accomplished pro-actively are based on collaboration and sharing data and information.
The final step is the creation of a business continuity / recovery plan which addresses the unique needs of the company and the BCOs and their respective customers. The actions listed in Table 3 are the building blocks for these plans. All of them are based on the collection, analysis, and application of the outputs from the analysis. Employing digitally based systems supports the creation of continually updated plans which can better guide responses to disruptive forces.
Examples of additional benefits arising from holistically addressing supply chain sustainability include demonstrating social responsibility, identifying, and employing best environmental practices, improving health, safety, and security standards compliance, increasing brand awareness, and long-term profitability.
The ability to pivot in response, or preferably in anticipation, of disruptions is critically important in an environment in which there is little stability. A company, or better, a group of companies which combine their efforts to address the disruptive events are in a better position to protect their market position and to provide critically needed services to their customer base.
By Charles Edwards