“The supply chain is fundamentally changing through digitisation. Identifying how these innovations will affect the industry can give companies a leg up on the competition.”
Mark Skilton, Professor of Practice in Information Systems Management at the Warwick Business School just outside of Coventry, UK, instructs his students in the art of digital consulting. He’s spent 30 years as a consultant, working for around 400 companies on some 1400 projects, and is a specialist in digital economies, big data, social media, cloud computing and the next era of the information economy. He teaches his students how to interpret performance using the right metrics and lash it together into a cohesive business strategy.
Professor Skilton has studied the way that IT and supply chains have begun to intermingle and feels that, over time, this merging will redefine the logistics industry as we know it.
“The supply chain is fundamentally changing through digitisation,” says Skilton. “Identifying how these innovations will affect the industry can give companies a leg up on the competition.”
There are three major innovations, according to Skilton, that are revolutionising supply chain management: mobility, planned maintenance, and metrics and performance monitoring.
“In today’s world, mobile devices can monitor the movement of transport and cargo in real time,” says Skilton. “This mobility allows users to get information at any point in the supply chain, and thus offer usable data in real context. Mobility and mobile devices are a real game changer.”
Skilton also thinks that automating the use of capacity will help “reduce the cost of fuel, improve efficiency and manage the supply chain more effectively. Using technology to monitor equipment and thus use preventative maintenance strategies, for example, keeps downtime to a minimum, which is a vital consideration for most companies as it is a cost/supply issue.”
These examples fit right into Skilton’s third point, which is the effective use of metrics to monitor performance. “The interest in using advanced analytics to determine where performance is best or from where potential problems might arise has grown across industries,” says Skilton. “Going forward, there will be more real-time metrics measurements, with more fine tuning done to get even more detailed information.
Like most paradigm shifts, however, there are still some challenges to resolve before changes take root. One such issue brought about by information technology is what Professor Skilton calls the “Time is money” problem: “Every time there’s a delay in getting information from a point in the supply chain back to the planning process, and then returning to make a change in the process – what we call reactivity – there is a cost incurred. Real-time data needs to be more widespread in order to reduce this issue.”
Nevertheless, opportunities abound. As most supply chain companies operate internationally, the demands on staying up to date on essential regulations, tax systems and other considerations to working between boarders are immense. “It’s a dynamic situation,” says Skilton. “Understanding local market incentives, skills available in the market, the reliability of work, and local government security, are necessary for positive results overseas. Technology can help in this realm, replicating data and services offered in one part of the world and taking them somewhere else more easily, if you can control your knowledge management with technology.”