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Here’s How Top Companies Implement Customer-Driven Supply Chain Transformation

 & Akshara Ajayan
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Each year Gartner conducts research to find out Gartner Supply Chain Top 25 organizations globally. 2021 was a year that tested several organizations’ supply chains in unprecedented ways. According to Gartner, the organizations had to exhibit high levels of agility and flexibility to rise to the challenges of the pandemic. Highly efficient logistics was not enough for a company to succeed in a year as challenging as 2021. An important factor that sets apart a company’s present supply chain system from the past is the investment made in technology that drove resilience, agility, and innovation. So, what did the top companies mentioned in the Gartner list do to adapt their supply chain to the changing demand in 2021?

What did the top performers do?

All the companies that topped the Gartner list focused on customer-driven supply chain transformation, digitization of supply chain, and implementation of ‘green’ and ‘people-oriented’ strategies.

#1 Cisco

Cisco takes the top spot second time in a row, highlighting the efficiency of their supply chain, which stood the test of the global pandemic situation. After Hurricane Katrina and Rita, in 2005, Cisco understood that their supply chain was not efficient enough to respond to such major disasters. They were not able to comprehensively assess the full financial impact of the disasters. Cisco then formed a dedicated supply chain risk management team, which focused on resilience, quality, security, sustainability, and compliance to evaluate and mitigate risks in the supply chain and develop its capabilities to respond to unprecedented situations.

Cisco combines innovation and leadership to rediscover how materials, parts, and products are sourced, moved, and assembled worldwide. So, where does Cisco’s leadership come into play? The leadership is involved in better tracking, communication, networking, and implementation of security technologies at every level of their supply chain, including its suppliers (component, manufacturing, and logistics). Hence they assure the quality of their products even with a 100% outsourced manufacturing supply chain.

Cisco practices renewable resource consumption and promotes the same at their supplier’s end. Cisco’s goals for its suppliers include: by FY 2025, 70% of suppliers by spend will achieve zero waste diversion at one or more sites,  80% of Cisco’s suppliers by spend will have a public, absolute GHG emissions reduction

#2 Colgate-Palmolive

One of the major causes of concern for companies is the reliability of the supply chain, especially in the current pandemic situation. Colgate-Palmolive has been strengthening its supply chain reliability by transitioning towards predictive maintenance of its machinery. The company has incorporated a mechanism that monitors the machine’s health 24/7 using Predictive Maintenance. This is a better solution than preventive maintenance. This digitally-enabled system takes care of diagnosing machine problems in advance, which helps in quick remediation and reduces downtime of the supply chain process.

Colgate partners with Augury to improve the technological aspect of its operation. First, Colgate provides the data to Augury. Then, the whole data collection and analysis process is automated using wireless sensors. Finally, Augury compares this data to the analytical data from over 80,000 machines worldwide. Again, this vast repository of information helps Colgate-Palmolive make quicker and smarter decisions at the least expense.

#3 Johnson & Johnson

During the pandemic, Johnson & Johnson’s supply chain team took all measures to ensure the availability of its products was on par with its customer’s demands. They made trade-offs like reducing the production of complex products and utilizing those resources to produce higher volumes of high-demand products. They also leveraged data science and complex algorithms to keep track of typical order patterns and markdown significant deviations.

The technology that Johnson & Johnson employs constantly monitors thousands of orders placed by its customers, so any unusual fluctuation in demand is caught early on and notified to supply chain professionals so that they can analyze the anomaly. As one of the world’s largest providers of pharmaceuticals, medical equipment, and healthcare items, Johnson & Johnson’s products need to travel thousands of kilometers to reach different parts of the country and world. So, track and trace sensors that travel with the shipment are employed, which continuously monitor every stage of shipping from the source until it reaches its ultimate destination. As a result, it is easy to track where the product is at any point in the supply chain. Temperature is also measured, so any disturbance experienced by the product which might hamper the products’ quality can be easily detected.

#4 Schneider Electric

Schneider Electric had started improving its supply chain four years ago, especially in digitization, sustainability, and customization. The goal was that the supply chain must cater to the different customer segments of Schneider Electric. Therefore, customization was the way forward. Five supply chain models were designed to meet the expectations of the diverse customer base. Digitization of the end-to-end processes allows them to be monitored, controlled, and optimized at every step of the way. This creates an end-to-end view that can be monitored at control towers spread across the global supply chain, and thereby on-site, real-time knowledge-driven by data analytics is generated. This analysis can help make better decisions and customer demand predictions, improve performance, detect issues, and create diagnoses even before outages occur.

#5 Nestle

Nestle has consistently invested heavily in the innovation of its supply chain, thus making it more resilient. Nestle is an integral part of the global supply chain as the largest food manufacturer globally, with a footprint in over 186 countries. So it has gone to great lengths to ensure its supply chain’s flexibility, resilience, and sustainability.

Nestle has incorporated a blockchain mechanism into its supply chain system to keep track of all its products from its factories to the store shelf. Nestle has collaborated with OpenSC, a blockchain platform, and is the first major food and beverage manufacturing company to introduce open blockchain technology into its supply chain. Since its open blockchain technology, all of Nestle’s partners could share the data securely across the vast network, thus enhancing the visibility of its supply chain.

Nestle has committed itself to responsible sourcing, keeping a sustainable and ethical future in mind, and this is another area where the blockchain technology-enabled supply chain can help. For example, if a consumer wants to know where his food is from, blockchain technology can help trace the supply chain.

Conclusion

By 2023, about 50% of the product manufacturing companies will invest in real-time shipment tracking platforms to have a reliable supply chain. Incorporating Artificial Intelligence (AI) and advanced analytics capabilities is essential, especially in supply chain organizations, and by 2024, about 50% of supply chain organizations will invest in them. Companies will be following the paths of the global leaders in the supply chain sector to address issues with data quality, disparate silos, visibility of the shipments, and timely delivery.

Here’s how LatentView Analytics can help your company drive supply chain transformation

LatentView Analytics is working with several supply chain organizations and their long-term data analytics partner to enhance their capabilities. According to Sunder B, who leads the Supply Chain Analytics division in LatentView Analytics, the company has been part of some exciting engagements. Notably, LatentView has done predictive analytics around manufacturing stops and wastages; for a leading tire manufacturer, the company has made out-of-stock predictions and inventory adjustment recommendations. LatentView has also utilized analytics to aid field service technicians of an organization in having the relevant supplies for each of their field visits, thus significantly increasing the efficiency of their service.

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