MHI Solutions Improving Supply Chain Performance
Hundreds of thousands of virtual gallons of electronic ink have been spilled about the necessity of supply chain organizations making a digital transformation in order to survive the havoc wrought by the emergence of the COVID-19 pandemic more than two years ago. Companies have increasingly invested in digital solutions (artificial intelligence, machine learning, data analytics, predictive modeling, simulation and more), seeking algorithmic answers to the unforeseen and unanticipated.
All of those digital technologies and solutions are absolutely crucial for more effective management of the unexpected to improve supply chain resilience amid disruption, said Alex Wakefield, CEO of MHI member Longbow Advantage. Unfortunately, not one of them will make a shred of difference if the data inputs each relies upon aren’t appropriately organized, accessible, easily shared and useful. Not unlike building a house, without first constructing a proper foundation, any structure layered over it will begin to crack, shift or fail.
“I think people blow past all the essential data blocking and tackling and jump into the really fun part of trying to write cool algorithms,” Wakefield explained. “But, without putting in the time to properly structure the source data—to make sure it’s clean, usable and harmonized—supply chain organizations won’t get the insights they need to attain the resilience they want.”
Further, leveraging those digital solutions (such as those listed in the sidebar on page 32) on top of a solid foundation of usable data can generate more than 5% improvement in productivity annually, added Amadou Diaw, director of digital transformation services at MHI member Dematic.
“Digital solutions tools are often driven by data from systems—such as controllers, sensors, data historians or related systems in facilities—that may have not been fully captured and utilized. By collecting and analyzing this data, organizations can gain new insights into problem areas along with uncovering opportunities that have previously gone unnoticed,” he said.
Diaw noted that supply chain organizations who have done so report:
- Inventory reduction by up to 35%
- CAPEX reductions by up to 30%
- Improved delivery times by up to 15%
- Shorter lead times by up to 50%
- Quality improvement by up to 40%
- Reduction in mean time to repair (MTTR) by up to 15%
- Overall operational efficiency improvement by up to 20%
- Reduction in manual data collection time by up to 80%
Unfortunately, no “easy button” or magic wand exists to wrangle the data into submission. However, there are several data organization and management best practices that can help. Armed with these eight strategies, supply chain leaders more effectively harness data for enhanced visibility, transparency, analytics, responsiveness and more to better manage disruptions.