Global supply chains, vital to the global economy, have recently faced disruptions that impact everyone, from Fortune 500 executives to the average consumer. An Ever Given container ship's recent blockage of the Suez Canal increased prices worldwide for some goods and even caused panic in some markets. The estimated loss from this mistake was calculated at $14 million in revenue for each day, and the total cost to global trade was estimated in tens of billions of dollars, demonstrating the crucial roles of supply chain resilience and risk management.
Although most supply chain interruptions aren’t that spectacular, they often have big effects. Some disruptions can create a ripple effect where a delay or failure early in the manufacturing/delivery process results in much more losses at the end of supply chain.
Some of the more common supply chain failures include:
Technological failures
Geopolitical and economic factors
Weather / Natural disasters
Human-error
Regulatory changes
Market demand fluctuations
All of the above need to be addressed on many levels, starting with recognizing challenges that could be addressed by proper risk management. All potential sources of failure should be identified and managed within a proper risk registry and process that allows companies to mitigate, resolve, or accept some risks for various scenarios. Risk management is a crucial part of building supply chain resilience since it allows you to recognize different scenarios—including worst-case situations that need to be tackled with various tools, including software. And to a certain extent, improving your resilience may come down to addressing a backlog of issues with software.
Example: Technological failure — A company without a connection to a central server could easily manage this potential failure point by building networks that run on the edge with scattered nodes that keep part of the business logic, store backups, and build tools for disaster recovery scenarios. Without proper assessment, this would be omitted and could result in huge financial losses.
The role of real-time tracking and dispatch:
Modern supply chain management is a complex network of processes, devices, software, and actors where efficiency and resilience have grown to be the most important parameters. Traditional dispatch systems have many points of failure:
Scheduling issues caused by fixed routes that don’t address changes in conditions
Poor communication between manufacturers, dispatchers, drivers, and customers leads to inefficiency and errors
Increased management times require manual adjustments to schedules and manually communicating the changes.
Fortunately, these challenges can be resolved by real-time solutions—and in many cases with simple out-of-the-box solutions.
Real-time tracking is the backbone of supply chain efficiency nowadays. It provides businesses with monitoring capabilities throughout the whole process, offering instant visibility into the status of each stage, the state of assets, and the exact location of shipments. Proper visibility is crucial during any supply chain disruption and allows businesses to mitigate the impact swiftly by rerouting shipments or communicating to stakeholders.
Different parts of the supply chain may be connected with real-time tracking solutions—like delivery dispatch software and fleet tracking software—which not only track various process parameters but also influence different challenges using different methods. Let’s review how tracking can be used throughout each part of the supply chain.
Production / Manufacturing
What can be tracked: Location of raw material shipments, volumes, extraction rate
Potential failures: Hold-ups in raw material extraction, shipment delays, production bottlenecks
Potential response: Predict delays based on extraction rates and past volumes and suggest alternative suppliers and/or materials.
Processing / Refining
What can be tracked: Production progress, machine status, inventory levels
Potential failures: Machine failure, inventory shortages,
Potential response: IoT sensors can monitor equipment status/health metrics and inventory levels, and alerts can be triggered using predictive maintenance methods.
Suppliers and Vendors
What can be tracked: Supplier performance, compliance with standards
Potential failures: Supplier delay and quality issues,
Potential response: Vendor management software can get information on supplier performance in real time and enable quick changes to alternative sources of supplies
Warehousing and Inventory Management
What can be tracked: Inventory levels, order fulfillment rates
Potential failures: Stockout, low fulfillment rate
Potential response: A warehouse management system with real-time tracking could optimize stock levels based on previous data reducing errors, preventing stockouts.
Distribution / Retail
What can be tracked: Shipment location, vehicle condition, and route efficiency
Potential failures: Transportation delays, damaged goods, sub-optimal routes
Potential response: Transportation Management Systems can use real-time GPS tracking to run route optimization algorithms on the fly. Keeping track of vehicle conditions and driver parameters may prevent accidents and delivery delays
Conclusion: How can we reduce supply chain disruption with PubNub?
There is a need for geo-tracking across every section of the supply chain. PubNub is a universal tool for real-time communication that can be used for geo-tracking. In part two of this blog, we'll cover how software developers can use PubNub to set up geo-tracking and improve their supply chain resiliency. If you'd like to explore PubNub yourself, you can set up a free account here!
