The vision of the smart supply chain

The roll out of a smart supply chain involves the adoption of new technologies and the enhanced use of data to create the flexibility needed in modern supply chains to take account of disruptive events, accommodate short notice changes in customer needs and mitigate supply-related risk for both suppliers and customers.

For more on rebuilding resilient supply chains post Covid-19, see our guides to managing distress in the manufacturing sector; rebuilding resilient supply chains through collaboration; and creating a resilient supply chain regime.

Experience gained during the Covid-19 pandemic has provided more than enough justification for investment in the systems and data required to provide enhanced forecasting and more accurate supply chain resource planning. With disruptive events now a permanent fixture in relation to any supply arrangement, ranging from Brexit to the longer term drive for sustainability, the move towards smarter supply arrangements is more pressing than ever.

In practice, digital transformation in the supply chain means the replacement of manual and paper processes with digital and autonomous mechanisms, including the digitisation of data flows and the adoption of technologies that create more flexibility and agility in the supply chain.

The transformation of supply chains is long overdue. Even hybrid supply chains, involving a mix of digital and traditional paper-based mechanisms, trigger real inefficiencies due to a lack of transparency, an inability to integrate systems and a general absence of operational flexibility.

When adopting a digital transformation agenda, it is vital to appreciate that any initiative goes far beyond the implementation of advanced technologies. The strategy and associated activities need to be planned and executed in a way that is holistic and systematic with sufficient flexibility to allow a business to fine tune its supply chain arrangements over time.

Whilst there are a number of critical components that are required to operate any smart supply chain, including automating processes, use of analytics and enabling digital interaction, the most important element of any system is data.

To support businesses in implementing smart supply chains, we have created a checklist looking at how the quality of data shapes the types of model that may be available, the role of smart contracts and the growing range of legal technologies that are available to enhance smart supply chains.