92% of companies saw supply chain disruption in the wake of Corona.
Some issues were inevitable; some not.
However the damage would be a lot less if company supply chain management was
better equipped for the 21 st century. It’s shocking almost 30% of organisations still rely on email, excel sheet, fax machines and paper for
procurement. That’s a huge weakness, especially when the world’s workforce is suddenly forced to work remotely.
Companies should take a hard look at company supplier management, seeing where solid data and digital tools could improve resiliency. After all, modern supply chain management practices give companies an edge when the world goes belly up.
Here are a few advantages of a digital supply chain:
Increase agility: Some companies are notoriously slow to get from source to pay.
Digital processes, backed by sound data, make it easier to act with speed and confidence. That speed drastically improves a company’s ability to find great suppliers, and equally to be a great supplier.
Speed matters in a competitive marketplace.
Automate tasks: New technology makes it easy to automate the more tedious parts of procurement that slow staff down – like processing paperwork and monitoring processes.
Automation with artificial intelligence (AI) is killing that monotony. It uses previous purchases and user preference to make informed decisions automatically. Some supply chain professionals tell me they hate the idea of automation. They fear robots will take over their jobs.
It’s true automation technology is shifting some job responsibilities. But it isn’t about taking control; it’s about giving staff more control. Automating repetitive tasks gives supply chain leaders the freedom to focus on strategy. Companies need that robust strategy more than ever as they prepare for the post-pandemic world.
Mitigate risk: Companies need a diverse group of suppliers and backup suppliers. Research from the Institute for Supply Management found almost half of US supply chain managers don’t have a plan in place to address supply chain disruption from China.
That’s just asking for trouble. No one needs the stress of scouting, selecting, and on-boarding new suppliers when global pressure mounts. The right data helps you build diversity into your supply chain, spot limitations, and discover potential disruptions earlier. That cuts your reaction time, ultimately making you far more resilient.
Control spending: More than ever, companies need to keep spending under control. And one of the best ways is to make procurement easy for internal staff.
Save money: One of the most compelling reasons to modernise and digitised processes is cost savings. After all, chief procurement officers say cutting company costs is their biggest pressure, according to Ardent Partners research. That’s why it’s a wise investment to digitise supply processes wherever you can. A company with $100 million in annual revenue could see up to $4 million in savings by making spend management more efficient.
Most procurement teams would love to swap the fax machine for modern processes and equipment. What’s stopping them? Company budget restraints, most research shows.
But with today’s subscription based SaaS solutions its easy to start with limited budgets, so the widespread disruption might be the push companies need to prioritise modern supply chain management.
It’s too late to plan for this crisis, so it’s time to prepare for the next one. Here are 5 questions to ask:
- Should we change the way we assess suppliers?
- How diverse is our supplier base?
- Do we need to change supplier contracts going forward?
- Should our continuity plans change?
- What technology do we need to manage future disruptions?
No one can predict the next global crisis. Yet those with modern supply chain management processes will be more resilient the next time around.