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Ushering in convergence: Unified supply chain platforms are key in 2024
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Global supply chains are facing a complex landscape in 2024, marked by disruptions, evolving consumer demands and technological advancements. In this dynamic environment, companies are increasingly seeking convergence: the seamless integration and optimization of disparate processes and systems across their supply chains. This is where unified supply chain platforms come in, playing a pivotal role in driving this much-needed approach.
These platforms are important for different reasons. First, supply chains have become a lot more dynamic, circular and real time, and old, siloed applications that work in a linear chronological way cannot keep up with the speed the world moves at in 2024. Second, supply chains have historically been fragmented, with data and operations siloed in separate systems. This creates a multitude of challenges from disconnected systems that impede visibility into inventory levels, order status and potential disruptions throughout the supply chain. This lack of transparency hinders proactive decision-making and hampers responsiveness to fast market changes and global disruptions. Multiple systems often also lead to redundancies, data inconsistencies and manual workarounds, resulting in operational inefficiencies and increased error rates. Finally, collaboration between internal teams and external partners like suppliers and logistics providers becomes cumbersome when information flows through diverse and incompatible systems.
Unified supply chain platforms offer a solution by integrating various functionalities within a single platform, facilitating data exchange and workflow automation. They drive convergence through centralized data management, as they act as a single source of truth, consolidating data from disparate systems like inventory management, transportation management, yard management and warehouse management. This enhances visibility across the entire supply chain, empowering real-time decision-making and proactive planning. Not only is the data streamlined, but the unified supply chain automates manual tasks and workflows, eliminating redundancies and streamlining information flow. This improves efficiency, minimizes errors and ensures consistency across various operations. Unified platforms also provide a centralized platform for collaboration between internal teams and external partners. This fosters transparency, facilitates communication and enables seamless information sharing across the entire supply chain ecosystem.
And finally, we should not underestimate the impact these technology platforms have on the people working through these processes. In times when talent is scarce and under threat from big competition, having technology solutions that improve lives can augment a company’s talent attraction and retention.
We have heard for many years about resilience, which became even more important during the COVID years. At the start of COVID, resilience was the ability to buy inventory and deliver products while manufacturing plants were shutting down, ports and distribution centers closed, and lead times increased dramatically. But this came at a high cost as transportation costs dramatically increased and shippers were buying inventory where they could find it. This could be categorized as “resilience at any cost.” But this type of resilience is simply not sustainable. U.S. business logistics costs increased by 19.6% in 2022, the highest-ever increase. And 50% of the increase was due to inventory carrying costs.
In 2024 there is a clear focus on cost management. Companies want even greater resilience, which means being dynamic and agile — both of which require connectivity and real-time data. But we need to be able to reduce cost to improve profitability. Companies can’t continue executing their operations at these high fulfillment costs with high inventory, fulfillment and transportation costs. We need smarter systems that helps us execute smarter.
Improved visibility across the supply chain allows for proactive risk management and faster response to disruptions, minimizing their impact and ensuring business continuity. Streamlined workflows and automated processes translate to cost savings, reduced cycle times and optimized resource allocation, leading to overall operational efficiency. Enhanced visibility and real-time tracking capabilities enable companies to fulfill orders efficiently and provide accurate delivery timelines, leading to improved customer satisfaction. There also needs to be a greater focus on the ecosystem of solutions between the planning systems, the execution applications, visibility platforms and other data solutions.
In 2024, a unified approach to supply chain management is no longer a luxury but a necessity. By embracing unified supply chain platforms and the convergence they enable, companies can navigate the complex global market, build “profitable” resilience and remain competitive in the ever-evolving landscape. This is not just a technological solution but a strategic investment that paves the way for a more efficient, transparent and customer-centric future for supply chains.
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Bart De Muynck is an industry thought leader with over 30 years of supply chain and logistics experience. He has worked for major international companies, including EY, GE Capital, Penske Logistics and PepsiCo, as well as several tech companies. He also spent eight years as a vice president of research at Gartner and, most recently, served as chief industry officer at project44. He is a member of the Forbes Technology Council and CSCMP’s Executive Inner Circle.
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