From EU vaccine procurement delays to semiconductor shortages and factory shutdowns, the past eighteen months have sent shockwaves through global supply chains and laid bare their complex, interconnected and brittle nature.
This trend shows no sign of abating. Just last week, we saw more signs of turmoil in the shipping sector, with yet further shutdowns of ports, surging shipping prices and persistent bottlenecks.
Manufacturers are implementing surcharges, while retailers find themselves scrambling to secure supplies of products. As the economy recovers, ports and warehouses look like they are going to continue straining to meet spiking consumer demand.
Are we on the cusp of a full-scale economic shock? Never before have supply chain capabilities been so prominently in the cross hairs of legislators, service providers, investors and consumers.
With recent OECD stats showing that the UK’s initial rapid economic recovery after the lifting of Covid-19 restrictions may be running out of steam, we’re not out of the woods yet.
All of this suggests a need to future-proof the global economy and, in particular, this comes down to improving supply chain collaboration. Those innovating in advanced digital technologies that allow us to harness supply chain data are poised to play a crucial role in this.
Organisations have a colossal amount of data at their fingertips, but the majority are either not gleaning the right insights from this data, or are failing to share meaningful information with key stakeholders.
Taking a look across our supply chains, the current system remains highly fragmented, often paper-based, with limited interoperability, sporadic collaboration and poor information flow. The result is materials, energy and money are wasted at almost every stage. Organisations have a colossal amount of data at their fingertips, but the majority are either not gleaning the right insights from this data, or are failing to share meaningful information with key stakeholders.
You may remember the adage ‘data is the new oil’; for a while, it was the hottest buzz-phrase. But in reality, if you’re not using this data properly, it’s no more valuable than the coppers gathering dust in your wallet.
Co-ordinating with blockchain
New technologies such as blockchain represent a massive opportunity to innovate across multiple parties to help improve trust, resilience and sustainability across industrial supply chains.
These technologies have been subject to justifiable speculation since the term first exploded into the mainstream. Despite the hype surrounding it, thankfully corporate-level speculation around cryptocurrencies like Bitcoin has translated into genuine interest in the applicability of other distributed ledger technologies like blockchain to help align supply chain knowledge.
Distributed systems technologies can improve coordination between disparate stakeholders in the supply chains through a secure system of trust – making processes more aligned, efficient and secure.
The logging and sharing of information through blockchain works like an agreement between multiple parties: everyone must agree on what has happened, at what time, who was involved, etc. In this way, these technologies enable us to track forensically the journey of products, parts and deliveries.
Through the work of Digital Catapult in a range of projects, we’ve already seen great examples of distributed systems having an impact in manufacturing industries including pharmaceuticals, construction, and food and drink.
For example, on a project with Bam Nuttall and Ferrovial we developed the Weather Ledger, a prototype system powered by blockchain technology. The prototype represents the first instance of an automatic, legally compliant smart contract working in an industrial setting which helps settle disputes over time and cost of weather-related delays in the construction industry.
Artificial intelligence for supply chains
With its extraordinary abilities to analyse large volumes of data patterns and relationships, AI can also help us make significant headway in streamlining supply chains. AI-based supply management tools help companies optimise their processes, predict delays or changes in demand, and even signal in advance when a process or machine is about to break down.
If corporate innovation teams rise to the challenge of implementing AI-based supply chain solutions, companies can identify logjams, iron out kinks and even predict supply chain disruptions far earlier than is currently possible. Digital Catapult’s work as part of AiEVO, a collaborative research and development project, looks at optimising data sharing in the supply chain. Trials have seen this approach delivering cost savings of up to 30% for participant companies. Testing continues to prove how far this approach can go.
Opening your doors to supply chain innovation
For any company working in a supply chain, there is a vested interest in how supply chain innovation could help – from large corporations, to independent sellers.
CIOs and chief innovation officers in larger companies are right at the heart of this supply chain revolution, primed to help their organisations embrace these technologies. However, many companies haven’t had a huge amount of experience in implementing organisation-wide technology – let alone inter-company innovation. There are lots of practical concerns which range from data security through to going over budget, to complex schedule overruns.
When it comes to supply chain technologies, a great opportunity to make more rapid headway is to work closely with or absorb knowledge from the start-up community. Digital Catapult has already developed projects with several large organisations that are taking this approach. In the nuclear industry, for example, we brought Sellafield Ltd together with two start-ups – Jitsuin and Condantis – who helped them implement blockchain solutions to improve tracking of waste and materials, and monitor industry skills to empower sector workers to do their jobs efficiently and safely.
This kind of knowledge-sharing is going to be imperative. That’s why, with the support of Innovate UK and UKRI, Digital Catapult recently launched a £20m programme bringing together technology providers, research organisations and academics up and down the country. The Made Smarter Digital Supply Chain Innovation Hub will develop a globally competitive, resilient and sustainable digitally enabled ecosystem for UK companies – uniquely positioned to solve the myriad challenges faced by today’s manufacturing supply chains.
Bullet-proofing UK supply and demand
We’re being faced with an unprecedented challenge and a new opportunity to build a world-class, digitalised, sustainable and resilient food system capable of responding to external shocks.
The UK is currently falling behind other countries in the digitalisation of our supply chains – but we do have some of the brightest minds here on the ground at the leading edge of this space.
We also have the capability to lead the world if industry and the innovation community choose to work better together, and I hope this programme of public investment will provide the incentive. If we can do this successfully, then we’ll be able to deliver more secure, efficient, resilient and sustainable systems for the benefit of all participants.