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Regular Industry Development Updates, Opinions and Talking Points relating to Manufacturing, the Supply Chain and Logistics.

The Future of Supply Chain Management

SSG Insight CEO Jon Moody discusses the importance of adopting a digital supply chain in a post Brexit Britain and Industry 4.0

03-Apr-2019
The Future of Supply Chain Management
The biggest supply chain disruption in modern day Britain is potentially Brexit. Since the United Kingdom has been part of the single market, trading between the UK and European Union has been straightforward due to zero import tariffs being in place and the free movement of labour, goods, services and capital. Of all exports from the UK, 45% of those are from the manufacturing industry and over half (52%) are going to an EU country as their destination. The decision to leave the European Union is likely to cause orders from EU-based countries to dramatically decline, and our research paper ‘Harnessing Brexit, Technology and Insight’ has found that nearly half (44 per cent) of UK manufacturing companies identify Asia as their focus for the future, as well as the Americas, Africa and the Middle East.

One in six (17 per cent) of UK manufacturers have also identified supply chain disruption as being the single biggest factor that will impact their business – such as new custom inspections and regulatory requirements that are likely to cause long delays. Whilst an extended customer base which includes Rest of the World territories will help manufacturers to minimise the effect that a hard Brexit will have on their business, British companies should also ensure that they have in place other contingency plans that are relevant for protecting their operations. Timekeeping is absolutely crucial in ensuring a successful supply chain is adhered to. One minor delay can have a knock-on effect throughout multiple routes of the chain and cause a serious breakdown in relationships between those involved at each stage, in particular the end customer whose product delivery has been delayed. Days, hours and minutes all matter in terms of maintaining a successful supply chain that is constantly operational. An inability to keep products manoeuvring through their set routes at the correct time in a post-Brexit environment could result in EU customers looking to source their products elsewhere, meaning the UK, and particularly its manufacturing industry, misses out. Although in normal economic climates artificial intelligence (AI) will be relied on to forecast what stock levels will be required in the future, companies are now stockpiling products and materials to create an inventory buffer that will minimise the knock-on-effect that hold ups at the border will incur.

As well as reducing the impact that Brexit will have on importing and exporting goods, a supply chain procedure that has adopted AI technologies can also help to minimise the likelihood of human error or altercations due to language barriers. This has been highlighted by more than a quarter of UK manufacturing companies as being a major concern for carrying out business. Particularly in Dover, traffic control sensors can, through the use of defined algorithms, help to divert vehicles along less congested routes to avoid a build-up. Optimising transport routes depending on the current road conditions can help companies to maintain tight schedules that need to be adhered to along the supply chain process. Another example of how innovative technology can benefit supply chain operations includes advanced scanning systems, which can be used to automatically recognise faces and number plates that hold the importing and exporting documentation. Those who still operate using outdated processes will find it difficult to stay afloat and compete in a digital environment that is unforgiving to those who fail to keep up.

Innovative technologies are also helping to transform global supply chains and trade by making the processes more inclusive and efficient, and less costly. QR codes are being used to identify and trace shipments, container numbers are being read by Optical Character Recognition, and the digitisation of trade documents have improved the efficiencies and reliability of international trade. Blockchain is also being cited as a way to address global trade issues such as the lack of transparency and security, whilst machine learning is being used to optimise shipping routes and mobile payments are connecting more people to market opportunities. Whilst these developments are undeniably positive news for global trade, it is worth noting that technology also presents a range of governance challenges that also must be addressed, from both a domestic and a cross-border perspective.

As Industry 4.0 is more widely adopted and with the final deal (or lack of a deal) on Brexit looming, companies are becoming increasingly aware that digitising their internal processes is critical to improving overall business efficiency. Adopting a digital supply chain is a major part of this, as companies can collate real-time insight into several key compartments including; warehouse inventory, production rates and delivery. Gathering valuable information through Computerised Maintenance Management Systems (CMMS) like SSG Insight’s Agility, is also integral to companies operating at their optimal efficiency. Adopting a digital supply chain means businesses can proactively distinguish changes in trends, respond quickly to the changes in demand, and thus minimise the likelihood of risk. Using predictive analytics, companies with a digital supply chain can also better utilise their resources, forecast inventory levels more accurately and minimise delivery times. Whilst Brexit is already causing issues for UK companies importing and exporting goods, it is imperative that businesses adopt digital supply chain management systems. Those that fail to embrace digital advances will struggle to compete with those that adopt the latest technology and won’t be prepared for the unprecedented disruption that will face them in due course.

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