What is neural supply chain management? John Quinlivan and Ashley Naughton outline the key characteristics of this principle, which is helping transform the way organisations work.
In today’s manufacturing world, the dependency on many organisations producing components or services to supply a product has never been a greater determining factor to the success or failure of a business.
Global sourcing and manufacturing has created a vast and complex supply chain ecosystem with many more sourcing and manufacturing options available. As a result, a complex interdependent ecosystem of suppliers has evolved.
Quality, timeliness and cost must be managed through multiple supply tiers, some of which are unknown to the OEM. Situations like COVID-19 expose and exacerbate the weakness in the supply chain and with manufacturers striving to pursue lean principles, the chain is strained even further.
It has become increasingly apparent that the supply chain footprint needs to be reconsidered to enable mass personalisation, embrace risk, leverage ecosystem and deliver exponential value with resilience and adaptability. Digital technologies such as cloud and intelligent automation can help to achieve this.
What are the benefits?
Adoption of these technologies and business pillars can be considered as being neural in principle. When neural supply chain capabilities have been established it will deliver many benefits with automation, intelligence and connectedness at the core of this inspiration, as illustrated in Figure 1.
Supply chain enterprises can become adaptive, responsive and create personalised value by exhibiting the neural traits listed.
Intelligent and Cognitive – Manufacturing firms will focus on becoming cognitive and intelligent by embracing insights and contextual knowledge to drive decision making not only within their firm’s boundaries, but also in the extended ecosystems they are part of.
Adaptive – By sensing environmental changes in the market, these firms will be better prepared to respond and become adaptive in their response, whether through altering their supply chains, changing their products and services to meet the market demands or rearranging their internal operations.
Connected – Connectedness for supply chains could mean connected operations through investments in smart assets and processes, becoming connected with their value chain partners or becoming an ecosystem partner or orchestrator.
Resilient – A significant neural trait is to be resilient to sudden changes in the environment. Supply chain functions can exhibit resilience not just by quickly readjusting their operating model but by also learning to create alternate modes of models should such changes reoccur. Self-healing is key to resilience.
Personalised – Adapting neural is not limited to how manufacturing firms should organise themselves, but also to how these firms can provide value to their end customers by personalising their products and services, and improving customer experience to increase wallet share from these experiences.
Automated (Machine First) – Automation in processes across the supply chain will help firms identify all possible avenues where smart machines can be used to delegate repetitive activities and move the workforce to take up value adding activities.
Case studies Tata Consultancy Services (TCS) has been helping global manufacturing organisations in their journey towards digitally transformed neural supply chains and recent collaborations include:
- Implemented a global sourcing and logistics ecosystem for an automotive OEM that delivers cost and service improvements.
- Enabled optimisation to the finished vehicle distribution supply chain by enabling live tracking of vehicles from the data transmitted from the cars in transit.
- Deployed a digital marketplace for aviation value chain actors to buy, sell, develop and collaborate on innovative digital applications. The OEM set out the vision to establish a digital factory to monetise data and provide products and services relevant to the airline service and supply chain network.
Three steps to transformation
Manufacturing firms will have to undertake a three-step journey to digitally transform, a process that has been developed based on interactions with a number of industry players across different segments. (See Figure 2)
What this means is true supply chain transparency, rich, informative, accurate data and cognitive real-time reporting with intelligent in-time decision making control. Neural supply chain embodies the very essence of digital transformation, creating processes that are part of the company’s neural system. As we move on post-pandemic, the spotlight is firmly on the supply chain to play arguably the largest part in transforming how organisations work.
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