Minimising economic disruption with digitisation

Minimising economic disruption with digitisation

Digitalisation is helping businesses access information, control supply chains and protect market share

Terry Simpson |

When someone says ‘supply chain disruptions’, the word that comes to mind is uncertainty – and uncertainty is the last thing a business wants to face.

This was borne out in recent McKinsey surveys. In October 2021, corporate CEOs identified supply chain disorder as the greatest threat to both their companies’ and domestic economic growth. Six months later, when much of the world had returned to pre-pandemic routines, it was still cited as a major threat.

We can all relate to the example of when the pandemic hit and people bought mountains of toilet paper, creating an artificial spike in consumption. Although people were hoarding it, this still resulted in demand going up and supply going down.

Businesses are doing the same thing with raw materials. They have moved from just-in-time to just-in-case inventory management. To hedge against uncertainty, many businesses are stockpiling raw materials as well as finished products, which increases demand all the way up the supply chain.

A better approach is to take control of the inventory by finding multiple suppliers and diversifying the supply chain as far back as possible. The first step is to get a crystal-clear understanding of what that supply chain looks like. If an organisation hasn’t already gone digital, now is the time.

Organisations need to document and map their supply chain, from the time the raw material comes out of the ground or is produced, all the way until the product reaches the customer. This helps supply chain managers to pinpoint ways to add efficiency and reduce costs, and to influence what is happening along the supply chain.

Many organisations have numerous systems of record that hold crucial data about their inventory needs and supply chain issues, but these are often not connected so they can’t share information. The only way to leverage that data is with digitisation. By using a workflow, organisations can reduce multiple inefficiencies through the supply chain.

Gaining control of the supply chain isn’t just about logistics; it’s about protecting market share. The further we get away from the height of the pandemic, the less patient consumers are going to be with shortages and other results of supply chain disruptions.

And if you don’t take control of your supply chain, your customers won’t be happy, which will result in a different level of uncertainty altogether.

Terry Simpson is manager of presales at Nintex

This article was originally published in the Autumn 2022 issue of Technology Record. To get future issues delivered directly to your inbox, sign up for a free subscription.

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