The removal of trade barriers with the advent of WTO and which led to LPG (liberalization, privatization, and globalization) across the universe increased choices of brands for consumers and even the complexity of products within organization and the expectations of consumers rising daily. Organizations look for better management of their supply chain from “end to end,” i.e., sourcing of raw materials from vendors to delivering finished products at the doorstep of consumers. This means businesses that used to be ‘operations hubs' within the company have moved into the epicenter of business innovation, and this process can not be done manually or by few people within organizations, thus the need to back up business innovations and product complexities through advanced technologies. Using sensors like RFID, CRM, AI, and ML, organizations today collect information at every checkpoint from status of raw materials flow to the location of finished goods. Supply chain management is the process of planning and implementing the operations of the sourcing of quality materials at competitive cost. This chapter explores strengthening supply chain management through technology.
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The technologies like Artificial Intelligence, Machine Learning, robotics, Data Analytics, Cloud Computing and Blockchain are transforming how companies need to change their business activities. These technologies are challenging but create enormous opportunities for businesses to reach more customers than in the past.
With the advent of LPG (Liberalisation, Privatisation and Globalisation), huge competition from multi-national companies and consumers’ perceptions, tastes, and preferences are changing rapidly. For example, Zara Fashion keeps inventory for just one week as consumers prefer newer designs and fashionable clothes.
Supply Chain 4.0 is a new paradigm that connects vendors to facilities to distribution centres through sensors, devices and the internet. This rapid growth of technology has transformed the supply chain to become more effective and cost-effective. Today, supply chain managers source the best materials wherever it is available globally and at the right cost. The Internet of Things’ ability to gather data and analyse them in real-time help the supply chain and the organisation to adapt to newer materials at a lesser cost, but very importantly, place materials just in time. The IoT helps in real-time data means the supply chain can track the market demand regularly and ensure raw materials reach the on time at the facility and, more importantly, the bullwhip effect has been eliminated.
Supply chain management is the coordination of different parts of a company to provide a product or service to customers. This includes everything from the sourcing of raw materials to the delivery of the final product (Galaskiewicz, 2011). Supply chain management is a system that businesses use to plan, create, and deliver products and services. SCM includes all the steps a product goes through, from when it is first made to when it is delivered to the customer (Shin et al., 2000).
The performance of the supply chain ensures benefits end-to-end, starting from vendors to the organisation to customers. The vendor gets information on supplies in a timely manner to produce and supply materials, and the organisation gets the right quality of materials the right quantity of materials at the right time, which will ensure the organisation meeting the demands of consumers in the marketplace. Moreover, this helps in the retention of existing customers and adding new customers at all times.
Every day morning, a street hawker brings vegetables and sells them in a particular area as he knows the demand. There will be no shortages to meet consumer demand or no wastages as the hawker knows the exact demand of the colony people. This may not be an earth-shaking event, nor will it shake the global economy. However, a modern organisation with 100s of brands and 1000s of SKUs will not have market information even with technology usage. This actually leads to bullwhip in the system and throws multiple challenges to Supply Chain Manager (Lee et al., 1997). Functions within organisations operated on a 'silo' system, where the exact market demand will not be known to the supply chain, how much material is being sent to facilities by SCM, or how much Finished Goods is being transported by the facility to Sales Depot / Wholesalers / Distributors.
SCM has to manage a web of businesses linked through upstream and downstream linkages that convert raw materials and packaging materials into valued added products for the end consumers. This means the supply chain manager gets involved in sourcing materials from vendors, sends them to the factory for conversion into value-added products, and then transports them to markets. There needs to be a “strategic fit” between Facilities, Inventory, Transportation, and, more importantly, “Information.” Obviously, information plays a vital role in linking all stakeholders and creating a “strategic fit.” Information is bi-directional flow that helps an organisation to create a dialogue with vendors as a backward linkage to the forward linkage to production, marketing, and, finally, reaching out to the consumers.
If there is a breakdown of production at the vendor’s place and if the material is not going to reach facilities on time, and information is not given to the facility, it obviously will only lead to wastage of production time, resulting in making the market starving for the brand.