Digitalisation – the missing link in global supply chains

Posted on 17 Mar 2021 by The Manufacturer

The last year has proved that supply chains need to be resilient if they are to withstand the myriad disruptions of modern society. However, as data often doesn’t flow effectively within and between organisations, products and money are wasted, Ben Ramsden writes.

Supply chain disruptions are one of the most serious challenges faced by manufacturers and retailers on a day-to-day basis. The COVID-19 pandemic created a demand driven challenge, making consumers more aware of the problems that this can create as the sudden changes brought about by the first lockdown in March 2020 led to empty shelves at many retailers.

As the world grows fundamentally more complex and interdependent, disruptions to supply chains and cross-border flows could become more severe and, alongside the impacts on supply chains because of climate change, disruptions are likely to be the new normal.

shutterstock warehouse logsitics forklift supply chain

Supply chains are complex networks. Though the phrase ‘supply chain’ denotes a linearity in suppliers, there are, in fact, systems of multiple and bidirectional interdependencies between organisations within a network.

Fortunately advanced digital technologies like the internet of things (IoT), 5G, artificial intelligence (AI) and distributed ledger technologies (DLT) such as blockchain, are all offering practical solutions and playing an increasingly important role in helping to both reinforce these complex supply chains and develop completely new and more resilient models.

Mitigating the risks of supply chain delays

The failure to properly assess risk is often a key cause of the disruptions that can plague supply chains. The main difficulty in doing so within supply chains is the lack of relevant, up-to-date information about the actions and circumstances of the other parties in the value chain. For example, retailers lack information on the current business condition of their suppliers, including manufacturers, and any events that may be interfering with the suppliers’ ability to meet their obligations.

Manufacturers face similar problems as they have no information on the risks that their suppliers are facing and how the suppliers’ risks have increased or been mitigated. All this leads to the whole process being reactive, as opposed to proactive, causing delays throughout.

As we have found in the KnowRisk programme, both internal business risk and across supply chains can be measured, mitigated and insured in real-time through the use of the latest technologies. As the work scales to embrace new use cases across agriFood and construction, we will see companies begin to unlock significant benefits from measuring, mitigating and pricing these risks. It is my view that any supply chain of the future should utilise advanced technologies such as AI, DLT and tracking technologies such as IoT and geospatial intelligence to help assess and mitigate risks in a timely manner.

Digitalisation in the UK: Putting theory into practice

There is an appetite for digitalisation within the UK market, however, it is not without barriers to adoption. The UK food industry has been a laggard in its adoption of advanced digital technologies, despite a strong homegrown innovation and start-up ecosystem.

To help change this situation, Digital Catapult is part of a number of innovation projects in the UK food and drinks sector, including the Made Smarter Technology Accelerator and Digital Sandwich. This programme, led by Raynor Foods, will deliver an open, national demonstrator of a digitalised food supply chain, using sandwich manufacturing as the use case.

The purpose of this is to deploy a state-of-the-art supply chain and help to increase the safety and traceability of ready-made foods, improving public health and public trust in the food supply chain. Targets for the project include a 10% reduction in food waste and a 10% increase in productivity, a 100% assurance of claims which will lead to a step change in food safety and a significant reduction in costs of inventory and capital.

Innovative programmes for change

Succeeding in creating a responsive, dynamic and sustainable global supply chain requires buy-in from across the value chain. Organisations of all sizes need to recognise the opportunity that advanced digital technologies can bring.

The UK in particular has a strong base in R&D for food and drinks manufacturing in the UK; the Made Smarter Review outlined a potential £55.8bn value added to the industry through the adoption of digital technologies over the next decade.

Through our work with the Food and Drink Sector Council, we are supporting the development of a national innovation programme across the food system through a programme called FeedUK. By convening leaders across the sector and creating critical national data infrastructure, this will enable the collection, exchange and leverage of data at scale, unlocking the benefits of data flow at an unprecedented level.

All of this work proves advanced digital technologies are becoming increasingly vital in strengthening supply chains in a constantly changing world, and the UK is in a prime position to capitalise and be a global leader in this charge.

Case study: Miralis and Sensefinity assist CHEP Europe

CHEP Europe, a company that supplies pallet pooling services, noticed that many of the trucks that used its pallets were leaving the depots without a full load. In order to combat this, and to reduce carbon emissions, it decided to engage Digital Catapult to explore possible solutions to this problem.

CHEP Europe_Shutterstock

The UK-Germany Global Challenge provided the opportunity for several start- ups from both countries to pitch to CHEP Europe; the winners were Miralis from the UK, which uses data analytics, algorithm development, modelling, simulation, artificial intelligence and machine learning to reduce emissions, and Sensefinity from Germany, which is creating the ‘internet of cargo’ where cargo assets autonomously orchestrate with processes across global supply chains.

Collaboration with the vibrant UK start-up community, coupled with 37 programmes such as the UK-Germany Global Challenge which boosts connections between international suppliers, provide valuable opportunities for large companies to embrace new technologies in their supply chain while reducing the bureaucracy that can be inherent within them.

More information

Ben Ramsden, Partnership Manager for Food & Drink, Digital Catapult, works with the UK’s food and drinks sector to help drive value, improve competitiveness and sustainability for the industry by experimenting with, and adopting, advanced digital technologies.Ben Ramsden, Partnership Manager for Food & Drink, Digital Catapult, works with the UK’s food and drinks sector to help drive value, improve competitiveness and sustainability for the industry by experimenting with, and adopting, advanced digital technologies.

Images courtesy of Shutterstock