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article imageQ&A: Achieving a supply chain renaissance Special

By Tim Sandle     Jan 20, 2019 in Business
Supply chains are complex, and the involvement of multiple actors adds to this complexity. Yet, supply chains can be improved through digital technology, according to Nikos Papageorgiou, an industry expert at the forefront of the technology.
Nikos Papageorgiou works at Slync, an intelligent platform redefining supply chain collaboration. Prior to this Papageorgiou spent seven years in strategy and operations at Deloitte, where among other accomplishments, he led innovation labs on digital transformation with Fortune 500 companies, and the implementation of a next gen, global and digital supply chain control tower for a major life science manufacturer.
Today Papageorgiou helps logistics participants create a digitized supply chain with industry 4.0 enabling platforms including AI, blockchain, advanced analytics, and intelligent workflows. Papageorgiou discuss with Digital Journal how to use tech to elevate supply chain performance.
Digital Journal: How complex are modern supply chains?
Nikos Papageorgiou: Irrespective of size, businesses are looking to increase revenue and profitability by expanding their product portfolios. Typically, that introduces complexity and risk into their supply chains. External factors such as increasing customer expectations, fluctuating demand, and intensifying competition due to globalization further complicate things.
I like to think about supply chain complexity in terms of the number of parties and systems involved in delivering a single product or shipment to the end customer. Take a simple example of a widget produced in Southeast Asia and imported to a regional hub in the US from a transpacific ocean route. Parties include the shipper, truckers, ocean carrier, port and custom authorities, forwarder, warehouse operators, etc. Systems will include ERP, TMS, WMS, forwarder systems, port and custom systems, vessel / truck tracking systems, in addition to Email and MS Excel – sometimes quoted as “enterprise supply chain software”. That gives you a feel of the complexity involved – and this is just for one widget delivery.
DJ: What types of things go wrong with supply chains?
Papageorgiou: Today’s supply chains are nothing less than heroic. Given the complexities, successfully moving more than $17Tr in annual global trade volume means supply chains are working great most of the time. The challenge is when they don’t. These are the exceptions when things deviate from plan. Here are some examples: Manufacturing lines may stay idle due to delayed delivery of raw materials. Customs clearance may be delayed due to lack of complete, accurate and timely shipping or regulatory information. Product may be damaged during transport due to improper handling or non-compliances (e.g., temperature out of range). Regional hubs and customer warehouses may incur stock-outs or backorders due to delayed product deliveries or demand spikes. The list is endless.
And these inherent – but perhaps controllable – supply chain challenges are always exacerbated by macro factors such as weather hazards, geopolitical events, volatile commodity costs, transportation capacity shortages, etc. The adverse impact of exceptions adds up quickly – excess operational costs, underutilized assets and, most importantly, substandard customer experience.
DJ: How big an issue is counterfeiting?
Papageorgiou: The prevalence of counterfeit goods plague supply chains in many industries – fashion, luxury, pharma, wine and spirits, and more. In fact, counterfeit products are projected to drain $4.2Tr from the global economy by 2022, according to the International Chamber of Commerce. While eliminating counterfeiting all together is probably unattainable, there’s significant opportunity to cut down how often it occurs – and it starts with digitization.
DJ: How can technology like blockchain improve supply chain security?
Papageorgiou: When supply chain leaders ask about blockchain, what they typically have in mind is transparent, trustworthy and easily accessible information about the product – and more generally about the product journey (e.g. source, chain of custody, storage/shipping conditions, etc.). Now – and this may surprise you – you can achieve all of these with digitization… and without blockchain!
Modern enterprise supply chain software (cloud-based or on-premise) can stitch together a ‘single-version-of-the-truth’ view of the product journey in a tamper-proof fashion while making it accessible by a multi-party ecosystem of supply chain partners. Imagine an end-customer, logistics manager, or virtually any other stakeholder across the chain scanning a product serial number – let’s say with a mobile device – and being able to instantly view the product journey, chain of custody and current status of the product. Scanning a counterfeit product will instantly trigger an exception alert to notify the user.
Blockchain has merit when supply chain partners are not trusting each other – and there are several such cases. Typically though, large established shippers, forwarders and carriers enjoy good business relationships and have the ‘trust capital’ required – they are just missing good, modern logistics software.
DJ: Can such technology assist with transparency?
Papageorgiou: Yes, blockchain is one of the technologies that can support transparency through digitization – especially in scenarios where there is lack of trust. Furthermore, the distributed nature of the blockchain technology – if implemented properly – can introduce additional layers of resilience. Currently there is a lot of experimentation with new blockchain protocols that address well documented shortcomings of the technology. And despite the ‘hype’, the initial reaction from the supply chain market has been modest.
DJ: What can artificial intelligence deliver to supply chains?
Papageorgiou: Artificial intelligence (AI) has entered ‘beyond-hype’ territory with companies transitioning from pilots to full-scale implementations. However, headlines about ‘general AI’ and the risks in the distant future are creating confusion.
Supply chain leaders should look into machine learning (ML), the most relevant AI field, for tangible business value. Predictive models that learn from data can utilize as inputs the attributes of a complex supply chain (e.g., lanes, modes, carriers, past performance, etc.) and predict exceptions in the supply chain before they occur.
And that is exactly where ML comes in: in taming the supply chain complexity and providing foresight at the fingertips of logistics professionals, who in turn are empowered to proactively manage these exceptions. Think reduced operational costs, increased asset utilization and an overall improved customer experience.
DJ: How should companies implement these technologies?
Papageorgiou: I wouldn’t put all these technologies in the same bucket as they are in different stages of the maturity curve. To put it simply – if you haven’t started your supply chain digitization journey, you are already late. Regarding AI, it all depends on an organization’s readiness – technical and operational. Currently available low-cost, cloud-based AI services can accelerate your journey, but you can’t bypass the need for data, and thus the need for an underlying digitization layer. Lastly, blockchain should be on everyone’s radar as protocols evolve and solutions emerge. However, caution is recommended at this stage.
It may be counter-intuitive, but successful implementation of next-generation technologies is typically preceded by ‘fast-fail’ pilots. Integrating data from disparate sources, building machine learning models or engaging in multi-party collaboration is not easy and the lessons learned from early pilots are invaluable for long term success – even when the pilot ‘fails’. Starting small by focusing on a single pain point (e.g., one lane, product or partner) limits complexity, while scaling quickly after the value proposition is proven will ‘move the needle’.
The key ingredients for project success are clearly defined business case, strong cross-functional teams with expertise in logistics, and selecting the right technology partner – one that can accelerate your discovery, target quick-wins and re-evaluate.
DJ: Can legacy systems be integrated with these newer technologies?
Papageorgiou: They have to. And yes, they can. Despite recent developments, legacy systems in logistics have failed to achieve what has been achieved in other industries – flexibility. Take for instance Salesforce in CRM – it is not coincidental that they have surpassed the incumbent solutions. Similarly, modern logistics software is bringing flexibility in the user interface design, so that with little or no code, the software can evolve with an organization’s supply chain needs.
To achieve integration, flexibility is bundled with nimbleness, in the sense that legacy systems (ERP, TMS, email) are not replaced, but rather a sliver of critical data is ingested and aggregated into a ‘single-version-of-the-truth’ view platform to provide the needed visibility and online collaboration for a given product or shipment. There are several integration options including APIs and EDIs.
DJ: What services does Slync provide?
Papageorgiou: Slync is redefining collaboration across the supply chain. With Slync, operational teams drastically reduce exception resolution cycle times and avoid excess operational costs. Exception management is achieved through Slync’s multi-party visibility, automated workflows and AI-driven predictive analytics. Visibility and collaboration are achieved by integrating disjointed data sources (API, EDI, email, Excel) into a single view of the ‘product journey’.
Workflows for managing exceptions can be triggered automatically across functional and company borders – breaking silos. Predictive models can analyze – and in the case of AI, learn from – the complex yet data-rich supply chains and provide predictions so that operations teams can stop ‘firefighting’ and manage proactively.
The Slync platform is by design flexible and configurable to solve customer-specific pain points – as every use case can be meaningfully different. Today, shippers, forwarders and carriers can use the Slync platform to simplify exception management, increase transparency across the supply chain, improve coordination between supply chain partners, enforce process compliance, analyze complex data and more.
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