The post-pandemic recovery was a major shock to the supply chain landscape. The emergence of varied and powerful headwinds saw many lingering inefficiencies exposed as firms scrambled to maintain inventory levels against the backdrop of an uneven recovery from the health crisis, geopolitical unrest, environmental concerns, and staffing shortages to name a few. 

Legacy processes have been adversely impacted by changing consumer sentiment, and it’s becoming increasingly clear that digital transformation is essential in helping businesses at all ends of the chain overcome mounting pressures. 

Pressure Amid Mounting Headwinds

Supply chain issues can be varied. The lockdowns driven by the pandemic saw a surge in economic activity throughout Western economies, and growing chain pressures were compounded by closures and staff shortages impacting shipping, ports, and haulers. 

For major shipping routes like the Suez Canal and Panama Canal, geopolitical conflicts and drought have impacted the flow of trade through both areas respectively, and these issues are showing no signs of improving soon. 

These drawbacks come at a time when the ‘Amazonification’ of trade means that customers have evolved to expect to know where their orders are at all times, and they want delivery times to be rapid as a minimum requirement. 

When it comes to international supply chains, offering such clarity and accuracy can be extremely difficult. Many silos exist between global warehouses, suppliers, and vendors. This can make the accurate fulfillment of orders more complex, and fall short of customer expectations. 

However, we’re already beginning to see the emergence of digital transformation as a tool for optimizing international supply chains for enterprises of all scales. With this in mind, let’s explore five essential ways that technology is helping supply chains to overcome its challenging headwinds: 

Embracing the AI Boom

Artificial intelligence is a technology that’s emerging at an extremely fast pace for countless industries, and it’s through the ongoing AI boom that businesses can gain more supply chain optimization capabilities. 

The beauty of AI solutions is that they can interpret big data on behalf of firms to generate automated and actionable insights to enhance the performance of supply chains. They can be utilized throughout chains to improve performance in areas such as: 

• Anticipating demand

• Production planning

• Optimizing delivery routes

• Improving packaging
• Reducing costs

We’re already seeing the unity of big data and AI in Amazon’s supply chain optimization processes. Given the sheer scale of the store, fulfilling orders at scale is a challenge perfectly suited to artificial intelligence.

To manage extreme customer demand, Amazon utilizes AI to optimize its supply chain by forecasting customer demand, optimizing inventory levels, using data to effectively route orders to the best fulfillment centers, and planning delivery routes to save fuel. 

The addition of AI alongside machine learning helps to anticipate product popularity based on a series of metrics and emerging trends and to adjust inventory levels in advance. This process helps to limit waste and ensures that all customers can receive their orders in an efficient and time-efficient manner. 

Blending Data and Analytics

The sheer volume of data businesses produce each day can pave the way for comprehensive operational insights, but the vast majority of it is too unstructured to be effectively utilized.

Without accessing these insights, businesses are prone to sticking to their existing processes without the ability to stamp out supply chain pain points effectively.

However, the emergence of cutting-edge tools like process mining has empowered business decision makers to democratize their data to solve lingering supply chain issues.

For instance, it’s estimated that at least 60 million shipping containers are shipped yearly. However, silos mean that businesses run their inventory, production, order management, and shipping processes in an isolated manner, meaning that many containers could be left underutilized on a regular basis. 

In this instance, analytics could help to monitor shipping capacity in real time to bundle orders and maximize the cost-saving potential of this particular aspect of the supply chain. 

Building on Automation 

Additionally, automation technology and robotics are improving the efficiency of logistics and facilitating more interconnected supply chains.

The blending of AI and machine learning means that more algorithms can be utilised to analyze significant volumes of data to identify patterns and make autonomous decisions regarding key supply chain processes.

One key example here is demand forecasting, whereby algorithms can identify emerging trends or alterations in customer demand and automatically order more inventory to ensure the ongoing spike in demand can still be facilitated by the company. 

Because this is a pre-emptive measure, these automated ordering systems can help to improve customer satisfaction from order fulfillment and save on costs through data-driven forecasts for demand.

The Internet of Things (IoT) is another key technology here, and the use of logistical tools like RFID tags and GPS trackers can help to facilitate a more holistic overview of the location, quality, and supply of goods through international supply chains.

Enhancing Order Visibility

One major disruptive influence in the supply chain landscape is blockchain technology.

While much industry attention has been focused on the AI boom, blockchain is capable of revolutionizing supply chain transparency, particularly for cross-border chains.

Having the ability to keep an accurate and immutable record of where your products are and have their quality assured at every stage of the chain is an invaluable asset for upholding complete visibility of a chain. 

Because blockchain is a distributed digital ledger that requires a consensus to be reached among its network of nodes, records can be fully accessible and tamper-proof for all parties involved in the supply chain.

Additionally, smart contracts, which are self-executing, algorithmically-backed tools that work alongside blockchains, can leverage instant payments to parties based on the perceived quality of delivered goods.

Forming Connections with Suppliers

The only way to overcome industry silos is for businesses to form a conducive connection with their respective suppliers. In doing so, they stand the best chance of overcoming supply chain headwinds and can facilitate greater resilience should setbacks occur.

Through a blend of automation and analytical software, it’s possible for companies to manage its payouts across various vendors and actively build transparent relationships that put performance at the forefront of partnerships.

This simultaneously helps companies to manage vendors and leverage AP automation while avoiding falling into its own on-chain silos when it comes to keeping avenues for communication open at all times. 

Building a Sustainable Supply Chain Infrastructure

As more globally firms face up to supply chain disruption and the frailties of legacy systems throughout international chains, the emergence of technology like AI, machine learning, automation, the Internet of Things, and blockchain help to overcome industry headwinds and point to a more collaborative and transparent future for the essential industry.

With geopolitical, environmental, and staffing factors remaining as uncertain as ever, the implementation of these technologies to overcome industry silos may be imperative for the future sustainability of international supply chains.