It seems like everything is expensive these days and on huge backorder. Do you want a new iPhone 14 for Christmas? Good luck with that. COVID-19 restrictions in China are causing significant delays this holiday season. And it's not just tech gadgets; it's across the board from retail to construction. The global economy is experiencing a time of significant volatility, with slowdowns in China and other key markets and falling commodity prices. Rising energy costs are causing pressures throughout supply chains.
All of this puts pressure on companies across the supply chain, from manufacturers to distributors to retailers. In particular, companies are struggling to manage inventory in the current climate. With demand uncertain, they are reluctant to over-order products and risk having to write them off later. At the same time, companies don't want to run out of stock and lose sales.
Another challenge is increasing labor costs amid unusually high employee turnover compounded by a shortage of available workers to replace them. This puts additional pressure on companies to find ways to automate or outsource production, which can be difficult and expensive. Finally, companies face pressure from consumers to keep prices low, even as costs rise. This makes it difficult to make a profit and can lead to price wars.
Technology can't solve all these problems. And, of course, an end-point wholesaler or retailer probably doesn't have access to, and certainly not control over, the people, processes, and technology of its downstream suppliers. So, no technology solution is going to be a silver bullet. But it can help significantly, as PwC makes clear, "In the face of disruption, technology solutions in the supply chain function can transform operations and distinguish a company from its competition. Technology has opened the door to a data-driven strategy, as companies can successfully measure operations and use predictive solutions that help plan for the future. Additionally, emerging technology implementation within supply chain operations is helping to deliver cost efficiencies."
What companies do have control over is their processes. There may be a lot outside of their control but ensuring that their processes are as efficient and effective as possible means they're not contributing to their supply chain woes. And well mapped and monitored processes, using digital twin capabilities, can be the canary in the coal mine, helping with the timely identification of potential issues in the broader supply chain ecosystem.
"Supply chain digital twins support a simple but critical organization role: providing greater visibility into the organization's supply chain and future responsiveness, allowing for potential disruptions to be simulated, different designs to be tested, and helping it make strategic decisions based on actionable insights. The end goal is preventing disruption and optimizing productivity." RTInsights
BusinessOptix's digital twin of an organization, DTO, enables companies to create a virtual representation of their parts of the supply chain, allowing them to monitor, analyze, and optimize their operations. This can help companies identify inefficiencies and quickly adjust their processes to meet changing customer demands. Additionally, digital twins can provide data on the performance of the supply chain, allowing companies to respond promptly to any potential disruptions.
A BusinessOptix DTO can also help companies collaborate with their suppliers more effectively. By providing visibility into the supply chain, companies can better anticipate and manage potential disruptions. This can help companies reduce costs and improve customer service. Furthermore, digital twins can help companies identify potential risks and develop strategies to mitigate them.
Finally, digital twins can help companies improve quality control. By providing insights into an organization's current state, companies can quickly detect any potential. They can then simulate various scenarios in a virtuous cycle of capturing process performance, modeling scenarios, running experiments, and using this information to set the next course of action and improve the process. This can help companies maintain the quality of their products and services and ensure customer satisfaction.
Overall, digital twins can help companies address current supply chain challenges by enabling them to monitor, analyze, and optimize their operations. Additionally, the BusinessOptix DTO capabilities can help companies collaborate with their suppliers more effectively, reduce costs, and improve quality control.
A digital twin will help to answer questions such as will using RPA improve productivity and performance and reduce bottlenecks? Are additional resources required to handle increased activity volumes, e.g., due to a successful sales campaign? Will a change in working patterns increase or reduce process cycle times? Will a change in a process increase or decrease our risk profile? By leveraging digital twins, companies can ensure their supply chains remain resilient and responsive to changing customer demands and be less affected by the challenges faced further down the chain.
Oh, and good luck getting that new iPhone 14 in time for the holidays.