Real-time Data Isn’t the Only Thing Supply Chains Are Missing
Before the polar vortex in Texas, the biggest logjams at the Port of LA, and the start of the Great Resignation, McKinsey found that major production disruptions were estimated to occur every 3.7 years. In the months since, it has become clear these incidents are far too common to be referred to as black swan events. Instead, they are evolving into a new set of expected challenges that businesses endure on a regular basis.
While supply chains and the companies that rely on them have faced the greatest hardships, they haven’t always invested in the technology that’s necessary to persevere. However, that’s quickly changing.
As supply chain problems persist and inflation continues to rise, many businesses and their suppliers are rushing to digitize their operations. The most critical benefit they can achieve is end-to-end visibility of data as real-world events unfold, providing a full spectrum of insights for enterprises to build their supply chain muscle and long-term endurance.
Let’s look at how businesses can lead with data to improve their supply chain resilience and reduce the risks of the unknown.
Make data-driven decisions in the moment
Supply chain vulnerabilities may seem obvious now, but they weren’t always so apparent. Few businesses prepared for unexpected events ahead of COVID-19. They built forecasts with old data, believing that prior trends would be indicative of future developments.
This paid off during typical years in which past behavior repeated—for example, buying seasonal attire or going to a blockbuster movie. In 2019, box office receipts exceeded $11 billion; in 2020, they plummeted more than 80% to $2.1 billion, the lowest earnings in roughly 40 years. Instead of waiting to see the next superhero film, people formed lines to buy toilet paper during the early months of the pandemic.
From that point forward, traditional forecasts were thrown out the window as businesses sought real-time data analytics that would empower them with active intelligence. More than ever, businesses need to make data-driven decisions in the moment, not hours, days, weeks, or months later.
Better understand supply chain impacts with third-party data
Now businesses are in a hurry to update their technology to capture real-time insights, and with good reason—they can’t make accurate decisions by relying on outdated information. But there is one critical element that I’d urge not to overlook: third-party data.
When paired with internal insights, third-party data can provide a deeper and fuller picture of what is impacting the supply chain. It is an essential component for any business looking to preview the next wave of disruption, allowing for quicker action to reduce or eliminate the impact.
Generally, third-party data can be obtained from your suppliers. That said, the journey to accessing and then using third-party data may not be an easy one, especially when dealing with a global supply chain. There may be hundreds or thousands of suppliers involved, depending on the industry. As a start, businesses should begin the conversation by detailing their requirements in any third-party contracts. This will help set expectations and ensure that prospective partners understand what data needs to be captured and shared from the very start.
Lead with data to manage fluctuations in availability and demand
While many businesses had come to recognize the importance of real-time insights in driving smarter decisions, supply chains lagged behind. Based on what’s unfolding in the world today, market disruptions won’t cease and businesses need to take what they learned from the last two years and be ready to pivot accordingly.
Real-time insights will help overcome many supply chain hurdles and allow organizations to get ahead of the fluctuations that follow. When combined with third-party data, supply chains can finally achieve the level of resilience they need to better manage fluctuations in availability and demand. It’s this end-to-end visibility of data as real-world events unfold that will define the successful supply chains of the future.