Investors are grilling the C-Suite about Supply Chain Resiliency

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As enterprises, economists, and analysts of all stripes are assessing the impact of COVID-19, early research and trend analysis of Q2 Financial Earnings reports and analyst calls has shown a marked difference in the topics that the C-Suite is openly discussing as having impacts on earnings. Of what should be little surprise, Supply Chain topics saw a 280% increase in talk time compared to Q4-19, while topics such as implementing or better leveraging Digital Twins and IoT saw notable discussion in more than a few analyst calls. Additionally, due to evaporated air capacity causing forced pivots to ocean freight, shipping mode for freight, usually considered minutia by the C-Suite, was openly discussed and lamented as a serious system shock to enterprises as they had to replan inventory and figure out how new lead times and variability for ocean lanes would impact their service levels.

Supply chains are under the spotlight. Both potentials and problems within supply chains have long been deferred and ignored. With the pandemic exposing the lack of resiliency in supply chains and the geopolitical and social environment forcing a reckoning with the locations and business practices of supplier networks, supply chains are having their moment under the microscope. There is a lot to digest from these topics, but it’s important that we understand those potentials and issues within our networks to drive modernization, build in resiliency, and position supply chains to lead us through the economic recovery.

Let’s take a look at a basic fundamental that is lost when you have no Digital Twin to provide a backbone for operating your supply chain: most obviously, there is no common operating picture for your entire network – both the physical locations, including n-tier suppliers and end customers, and the inventory stored and moving throughout your network (whether you or a 3rd party are in physical possession). Without the common operating picture, the capability of being predictively notified of a brewing issue and intervene before it becomes a problem that your customers tell you about first is lost. If a critical order is delayed, and you have no impact visibility into what is at stake or how you could solve the issue before SLAs are impacted, you leave yourself in a constantly reactive position. How many times a day does that happen? Even a casual, back of the napkin analysis will show that for a global company, such common occurrences quickly run into the millions of dollars in annual cost – from needing to expedite inventory to placate customers, the headcount involved in gathering the needed information from siloed systems, to the time spent calling carriers and partners figuring out where exactly your shipment is and if there is an intervention option available. Predictive, early intervention capabilities are just one multi-million dollar value proposition out of dozens for the common operating picture that a digital twin provides.

With the focus being directed towards supply chain resiliency by boards and investors, now is the optimum time to aggressively move forward with a supply chain digital transformation. Any digital transformation for supply chain has to start with the fundamentals – in this case, implementing and connecting the digital twin to achieve a common operating picture for all areas of your business involved in the manufacture, movement, and delivery to customers of inventory. The most important part of achieving the common operating picture is in the name – common – the digital twin is not a digital twin if it is operating in a silo and only empowering specific areas of responsibility. The promise of the digital twin is to get all areas of your supply chain, logistics, and transportation to work together from a common perspective with regards to the past, current, and future predictive state of operations.

TransVoyant has been building and supporting digital twins as part of digital transformation projects for nearly a decade now. If you have questions about what the digital transformation looks like for supply chains, the value realized, or would like to be proactive in providing perspective or would like to be proactive in understanding the landscape and building your business case before the inevitable pressure to embark on a digital transformation comes crashing down from the Board and your investors, reach out, let’s talk.

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