The global pandemic sparked by COVID-19 continues to change the face of B2B ecommerce—and digital commerce networked to a digital supply chain.
The novel coronavirus is accelerating the use of B2B ecommerce across numerous vertical markets as more purchasing managers look for more digital ways to buy business goods and services for their organizations. But B2B ecommerce works most effectively with an efficient supply chain.
And in these pandemic-driven times, many companies are struggling with supply chain issues. For example, 99% of companies of all sizes are suffering moderate to severe supply chain disruption problems, says a new survey of about 600 supply chain executives from the Institute of Supply Management.
As a result, more companies are accelerating plans to update—or entirely remake—their supply chain with more efficient and effective digital technologies, such as artificial intelligence, advanced analytics, blockchain and internet-of-things (IoT) technologies. In this question-and-answer session, Jonathan Wright, global head of cognitive process re-engineering at IBM Corp., who is also a noted analyst on U.S. and global digital supply chain issues and trends, looks at the current trends surrounding digital supply chain implementation and the impact on B2B ecommerce.
Q: COVID-19 was a wake-up call for supply chains and B2B ecommerce for companies of many sizes. What happened and why?
Wright: The pandemic highlighted vulnerabilities in the system that need to be addressed now to successfully transition to a “new normal.” These systemic flaws were exploited by current circumstances, and no leader can predict exactly when and where these disasters will hit.
We’ve seen the result of that lack of visibility these last few months, but industry leaders are learning from what happened at a time when it’s affected everyone, everywhere—and are moving away from reactive operating models toward those that better protect customers, workers and the business.
Our supply chain ecosystem has also become increasingly globalized and complex—small or large disruptions along the way can have huge impacts downstream.
Many of the processes and solutions implemented since the start of the pandemic to address immediate challenges should become permanent to help businesses evolve, emerging stronger and better-positioned to service customers—especially during periods of unpredictable, unavoidable disruption.
Q: It has now been many months since the coronavirus pandemic hit. What has changed for supply chains and B2B ecommerce, if anything?
Wright: At the start of the pandemic, we were faced with the immediate challenge of quickly identifying problems and finding solutions to meet those critical needs.
In the months since then, business leaders are realizing that this intermediate period of “temporary normal” represents an opportunity to implement better technologies, processes and practices to ensure stronger operations into the future.
Many supply chains and B2B organizations are focusing on doing just that—working through a set of activities to maintain consistency and sustainability as the world moves closer toward its more permanent new normal. This involves priority investments around operational excellence, and tighter collaboration with strategic suppliers, customers and partners throughout the wider supply chain ecosystem.
Q: There has been much discussion in multiple industries about making supply chains more digital. How so, and in what ways?
Wright: With all of this change taking place, we’re seeing disruption now like we’ve never seen it before—and organizations across the board are realizing the need to shift toward more digital operating models to maintain continuity.
As businesses make these transitions, there should be a significant acceleration of digitization to allow supply chains to emerge in a stronger position. For instance, it’s critical that organizations leverage advanced and emerging technologies to analyze demand patterns at a local and global level.
This will enable tighter collaboration with logistics partners to better understand fulfillment constraints, allowing supply chains to service customers and B2B ecommerce companies with the products they need, where they’re needed most.
Q: What specific digital technologies are we talking about and specifically what does each one do?
Wright: Emerging technologies like artificial intelligence, blockchain and IoT can help businesses quickly identify patterns in supply and demand, at which point they can strategically think through opportunities to address these dynamic business challenges.
Specifically, AI can tackle data gathering and analysis—allowing workers to focus on tasks that are more professionally rewarding, while also thinking more critically about what the enterprise needs to maintain business continuity. These employees can’t continue at the pace and under the pressures they’re currently operating.
Organizations should also consider better risk management of supply chains enabled by hybrid cloud and analysis of external data generated by blockchain and IoT technologies, allowing for more careful planning and less reactive decision-making. Finally, they should start to integrate teams around intelligent workflows—helping to realign the business so it’s able to respond more quickly to rapidly evolving demand signals.
Q: How does having a digital supply chain bring about more effective B2B ecommerce?
Wright: Digital solutions like blockchain and IoT can increase transparency within B2B networks as trading partners conduct business—all while generating a trusted, immutable record to help maintain seamless supply availability.
This helps improve the supply chain experience by way of having an accurate, real-time view of inventory replenishment while meeting critical performance indicators such as on-time and in-full delivery to improve the timely arrival of ordered merchandise.
This level of visibility and continuity is particularly crucial in the wake of many items being back-ordered for weeks, if not months, after many critical manufacturing facilities shut down.
Q: Are companies expediting digital supply chain initiatives? If so how fast?
Wright: Those companies that already had AI, automation, and blockchain technology embedded into their business have been able to respond quickly to the changes.
When we look at demand sensing pre-COVID-19, when we were operating in a stable environment, it was really easy to use historic data like recent sales numbers from a week ago or a month ago. But in this new reality, things are changing much faster, so the supply chain needs a real-time sensing solution.
We are seeing organizations now accelerating their journey to AI to access these immediate insights.
Q: Why is supply chain transparency an issue for many companies?
Wright: Transparency is necessary in many aspects of the supply chain, whether it is data transparency, physical goods transparency, or within the supply chain processes—each of these comes with a unique set of challenges.
Lack of supply chain transparency can cause delays in timely decision-making for companies due to the lack of real-time information.
This can also make real-time collaboration with outsourcing partners and suppliers next to impossible, which reduces a company’s ability to be flexible. It is necessary to have access to the right real-time data, to know where goods are and how processes work. Lastly, the serial planning process is not responsive to rapid changes causing stock-outs and unhappy customers.
These known cracks in global supply chains are part of a range of concerns for executives, addressing them is critical to the vision of future supply chains.
Q: How do digital technologies such as artificial intelligence and advanced analytics help?
Wright: Supply chains can apply AI and advanced analytics to unstructured real-time data, generating alerts to help predict disruptions and vulnerabilities, which then enable visibility and insights for recommended corrective actions.
Through this, businesses strike a balance between the level of risk it can tolerate and the amount of flexibility it wants to achieve. This can be especially beneficial to small businesses who can take these tools a step further to better understand demand patterns for key products.
Once they have that understanding, they can work to build out strategic partnerships to ensure the right supply is available on a continuous basis.
Q: What is the typical cost of putting in a digital supply chain? Please be specific
Wright: There are several ways to approach building a digital supply chain that varies in cost, duration, and resource. Given the need for a quick response and time to value as highlighted by COVID-19, companies can start with implementing AI-driven solutions that integrate with their current state architecture to accelerate toward a digital supply chain, these can start adding value in less than a month.
Moving to a digital supply chain is a journey that companies can jump-start with relative ease and speed; we can leverage existing ERP systems and incorporate the latest emerging technologies and solutions to be integrated to their existing systems.
We work with clients to identify the biggest challenges, to align on priority work to be done that is scalable for larger transformations. Transforming to a digital supply chain can thus start with smaller projects that are part of a larger, scalable roadmap, or companies can do this as an extensive, full-scale transformation.
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