Supply chain management

Reimagine supply chain as a digital network that operates in perfect harmony, so it's better for people, the business and the planet.

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What is supply chain management?

A supply concatenation transforms raw materials and components into a finished product that's delivered to a client. It is fabricated upward of a circuitous network of organizations and activities, such as raw materials suppliers, manufacturers, distributors, retailers and the customer.

Supply chain management is the orchestration between these networks comprising procurement, management and storage of raw materials and manufacturing, equally well as the moving, delivery, and storing of finished appurtenances and later-market place services to create maximum efficiency, lower toll and net value.

Supply chains: From linear to network

To empathise the importance of supply chains management, information technology's worth first thinking about the importance of a supply chain at its most basic level.

Traditional supply chains follow a linear progression. The output of one step is typically the input of the next step. For instance, suppliers must ship raw materials to the manufacturer before the products can be made. If in that location's a trouble at any footstep, the entire linear concatenation is disrupted.

Today'southward supply bondage, however, are more complex than linear models—they're sophisticated supply networks that are more flexible and efficient. This helps meet customer expectations for a wide selection of customized, sustainable products and fast deliveries that come across individuals' specific needs.

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Securing the supply chain

Securing the supply chain

We explore supply concatenation risks & vulnerabilities and provide steps to integrate supply chain security.

The future digital supply chain

The supply chain is no longer but an efficient maker and mover of appurtenances; it'south now required to be a principal driver of business concern growth. Resilience is as well disquisitional, every bit hereafter supply bondage must manage ongoing disruptions. Sustainability is vital, too, and then that supply chains not but accost the concerns of investors, board members and governments, but also make a positive contribution to society through achieving zero waste matter, building circular processes and building trust.

Why? Disruption is the new reality. Technology is advancing. Client demands are evolving. Complexity and uncertainty are increasing run a risk. Supply chain management is key to solving this conundrum—and it touches everyone, everywhere.

Supply concatenation is now a main driver of business growth.

    Being more efficient throughout the supply chain and delivering goods for customers needn't come at the expense of the planet or become in the fashion of good governance. On the opposite, in fact. Effective supply chain management tin can and should put sustainability at its core. It's not just the more responsible thing to exercise; it'south what customers want. They likewise look companies to protect people through enhanced human rights efforts. Accenture's Human Rights Due Diligence Tool helps companies identify and assess risks in sourcing and production, besides as visualise risks by country and site. Technologies like this, beyond all aspects of ESG, ensure that companies are held accountable. Companies can no longer fall back on the "we didn't know" defense, and should instead focus their attention in creating a business model that not only delivers products customers need, but produces them in the fashion customers await.

    Intelligent supply chains are built on digital technologies, including Cloud, data and artificial intelligence (AI). They enable companies to implement supply concatenation strategy and achieve 3 primal outcomes:

    • Operational resilience, which helps companies withstand disruptions
    • Customer and employee relevance, which provides flexibility and agility to respond to changes in demand and personalization in a cost-effective way
    • Business responsibleness, which fosters sustainable practices enabling prosperity for society and the environment

    These outcomes are important to business concern, club and the planet. To achieve them, companies must build intelligent supply chains that bring humans and machines together. And this all starts with effective supply chain management.

The basic components of supply chain direction

Supply bondage vary by company and industry. But at their cadre, they contain several interdependent disciplines and, at a high level, usually contain seven bones components:

  • Technology: Creating a new production that customers will want
  • Planning: Anticipating and optimizing events through visibility within every step of the supply concatenation
  • Sourcing and Procurement: Identifying and buying the components that make upwards a product, with the aim of ensuring quality and reliability at the lowest cost
  • Inbound Logistics: Handling the transportation of goods into a business organisation
  • Manufacturing: Making enough products to satisfy demand and maintain target inventory levels
  • Fulfillment and Delivery: Getting a product to the customer as apace and economically as possible
  • Service Management: Maintaining or fixing a product to ensure customer satisfaction

From Engineering to Service Management, each area's output is the input to the next—each link relies on the others to form a potent supply chain. For case, Sales and Operations Planning tin can provide real-time sales results to inform product innovation that drives repeat business. In improver, Procurement must source and buy the right parts and go them to the right establish in time to meet production schedules. And products must be made and shipped on fourth dimension to ensure that customers get what they want, when they were promised.

Intelligent supply networks are similar, but they have one key difference: They leverage digital tools and technologies to optimize the supply chain and provide visibility across the ecosystem to deliver deeper insights and greater value, more quickly. This shift has a knock-on impact on the 7 core components of supply chain direction, and the skills that each requires.

This shift has a knock-on impact on the seven cadre components of supply chain management, and the skills that each requires.

A expect at current supply chain sub-disciplines

Each discipline within supply chain management must transform to come across the needs of the hereafter. That'south not merely our opinion—it's what supply concatenation executives told u.s.a. equally part of our Accenture Technology Vision 2021 research, which explored applied science trends.

Applied science

Engineering drives the ideation, design and development of a new product or service. In the future, AI and cloud technologies will aid engineers introduce using new capabilities, automate deployment and testing for faster product launches, and volition connect with the business organization to optimize functions.

Planning

Today'due south planners determine how to go the correct product or service at the right place and fourth dimension to meet demand. Tomorrow, algorithms will make nearly twenty-four hours-to-day planning decisions. A digital twin can optimize outcomes based on different variables. Information and AI will provide insights into what's happening in the supply chain to react efficiently.

Entering logistics

AI and deject technologies will transform logistics to provide existent-time visibility and optimize controlling for more than efficient movement of raw or finished goods from supplier to manufactory, warehouse or shop.

Manufacturing

Factory managers will have a wealth of information from avant-garde AI and algorithms, coupled with sensors across manufacturing facilities. They'll demand to be extremely adept at using this information to brand the right decisions. Read more: case study.

Service management

Rather than being reactive in supplying parts and personnel, companies will have AI and cloud technologies that enable them to make real-time decisions nigh product support, subtract resolution times and meliorate service performance and profitability.

Effective supply chain direction strategies

Correct now, many companies' supply bondage are built on dated, legacy technologies. They tin't support end-to-end visibility or existent-fourth dimension controlling, significant they struggle to deliver strategic business value. They're substantially analog machines trying to solve problems in a digital world. The result? Slow response times, waste, alien priorities between functions, delays and rigidity. What's more, companies struggle to meet increasingly granular client needs.

Furthermore, traditional supply chain organizations normally focus on optimizing a detail aspect of the supply chain—not all of information technology. Instead, organizations should share data across silos and optimize along the entire value chain.

Digital transformation of supply chains

To accost these challenges, companies should create intelligent supply chains based on data, analytics and AI. These, along with digital twins, are among the peak technologies that supply chain executives are looking to deploy in their organization. Enabling and optimizing them all, however, starts with the cloud.

Operating in the cloud is critical considering information technology allows companies to procedure huge amounts of information—from virtually unlimited sources across the entire supply chain—at speeds and volumes never earlier possible. Deeper analysis of more data, faster, means developing critical business insights and smarter decision making. This includes gaining the ability to reconfigure how people work, and gaining the agility to respond apace to new insights that the data generates. Forth with being more than powerful, simple and flexible, the cloud is too more affordable. This opens upward endless possibilities for improving and optimizing the supply chain, especially in terms of building in resilience and ensuring responsible operations.

In that location are additional benefits, too. When companies transform their supply chain organization, the focus shifts from driving profitability to delivering value across growth, sustainability and trust. Along with driving profits, the supply chain becomes instrumental in positively impacting the planet and gild akin.

Digital technologies and data lay the foundation to make supply bondage customer-centric, service-oriented, self-learning, intelligent and agile. There are five keys to executing an constructive intelligent supply chain strategy:

  1. Suspension downward barriers between functions. Traditionally, some roles (such as planning) operate in carve up timeframes and don't interact enough with other teams. In an intelligent supply chain, everyone works closely together.
  2. Build a digital foundation. Create transactional layers of real-fourth dimension data visibility. Ensure that the insights are digestible, so that leaders can brand quick decisions.
  3. Transform your talent. Technologies like artificial intelligence, digital twins, the internet of things and cloud are changing the game brings big changes to existing supply chain roles. Successful supply chain transformations put employees at the centre and give people the skills and support they need. This requires building new digital skills, but also involving anybody in the implementation of new tools and processes and so teams have a sense of ownership and the opportunity to introduce.
  4. Create partnerships and collaborate in new ways. Source engineering science partners who can assist boost operational efficiency, increase yield or introduce products.
  5. Automate routine work. Redirect staff to focus on strategic analysis and innovation.

This helps build an intelligent supply concatenation that improves customer experiences, increases competitive advantage and drives assisting growth.

New technology means big changes to existing supply chain roles

Sustainable supply chains

Supply bondage generate effectually threescore% of all carbon emissions globally. Companies that are serious virtually sustainability are working hard to make their supply concatenation networks more responsible and resilient.

There are many opportunities to increment supply chain sustainability, including:

  • Production design: Developing products with sustainability in mind.
  • Planning: Reducing waste matter by accurately matching supply and need.
  • Sourcing and procurement: Making sure suppliers follow ethical and environmentally friendly practices, and ensuring transparency across the entire supply chain.
  • Manufacturing: Making product more than efficient to reduce waste and energy consumption, and more than responsible past using ethical labor practices.
  • Logistics: Optimizing distribution and transportation to reduce fuel consumption and emissions.

Greenhouse gas (GHG) emissions are categorized into one of three unlike scopes. Telescopic one involves GHG emissions straight from an organization's endemic sources; scope 2 involves indirect GHG emissions; telescopic 3 emissions are caused past an organization's value chain, simply not owned by the organization. Reducing carbon emissions can occur all the style through the supply chain.

Companies that find new sources of value at the intersection of digital technologies and sustainability are two.5x more likely to exist amid tomorrow'south strongest-performing businesses.

    Cloud is i of the core ways to create supply chain sustainability and responsibility—merely also creation of a resilient supply chain. The cloud enables companies to efficiently procedure huge volumes of data, they tin can also use new technologies to reduce their environmental impact, heave efficiency, ameliorate compliance, mitigate run a risk and maintain efficiency even amidst global disruption. Net of Things (IoT) and blockchain are examples of cloud-based technologies that can help optimize the supply chain by avoiding overproduction, minimizing shipping distances, maximizing sell-through and managing returns more than efficiently.

    Companies can connect their products, besides. This paves the way for the use of a wide range of circular business models including rental, re-commerce of used goods and product-as-a-service. It'southward a bully fashion for companies to infuse greater sustainability and trust into their businesses.

    Leading companies are taking greater responsibility for what's happening at the terminate of the supply chain. This means looking at what customers do with products and packaging when they've finished with them.

    Some businesses are creating formal takeback programs, whereby people tin can send back products at the stop of their lifecycle so the materials can be transformed into new, useful products. Only taking transformative steps toward circularity isn't solely about responsibleness; it'south virtually creating new opportunities for competitiveness and sustainable prosperity.

    Helping customers reduce their ecology impact has several knock-on benefits, including a boost in customer loyalty, increased sales, a competitive advantage and reduced materials costs. The key is using circular economy principles, in which manufacturers are responsible for their products throughout the lifecycle, to assist supply bondage address resource scarcity and ascent demand for sustainable goods.

Join the team

Run into several of our supply concatenation leaders from around the world. In that location's never been a better time than now to assist solve business organisation and national issues and be part of supply concatenation transformations. Learn more.

Supply Chain & Operations People of Change

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Often asked questions

What is a successful supply chain?

Successful supply chain leaders can better anticipate and adjust to shifts and disruptions in the market. They maintain high levels of customer satisfaction because they have a holistic view of their service levels, are sustainable, are responsible and create trust through data that helps generate actionable, predictive insights.

Once companies migrate their systems and applications, and gain the ability to process massive and diverse data sets from across all functions, they speedily experience the erosion of organizational silos as data is shared and acted upon more than intelligently and with greater speed and accuracy.

Companies can become even more informed by using technology to build digital twins of their supply chains. These virtual supply bondage allow companies to model and simulate disruptions or changes, likewise as identify means to improve supply chain operation before implementing those changes in the physical world.

What are the unlike types of supply chain?

At that place are ii types of supply chains: Reactive and Data-Driven. Reactive supply chains brand operational improvements based on guesswork or imitating competitors. A Data-Driven arroyo, all the same, helps every function within the supply concatenation, including even best-in-class manufacturing operations find new ways to better efficiency.

What are the master functions of supply chain direction?

Supply chain management involves five main functions: engineering, planning, sourcing, fulfillment, manufacturing and aftermarket services.

For example, supply chain management helps ensure vaccines are manufactured and delivered safely and on time. It helps retailers maintain acceptable stock levels of disquisitional supplies. It directs recyclable products to the right facilities instead of landfills. It enables the power to feed billions of people around the world.

When supply chain management is truly effective and optimized for flexibility and efficiency, it makes coping with uncertainty and responding rapidly to ever-irresolute demands less of a challenge, and more "business organisation as usual."

What does a good supply chain look like?

The characteristics of a good supply chain are visibility, price reduction, growth/value, responsible/sustainable business management, manage enterprise and a digital cadre.

What is the futurity of supply chain?

Through 2024, 50% of supply chain organizations will invest in applications that support artificial intelligence and avant-garde analytics capabilities, and run with cloud computing. The COVID-19 pandemic amplified the demand for supply chain organizations to seek tools that help them make better and more informed decisions, faster.

New digital supply chains volition be based on a flexible, asset-light model that places customers firmly at the center so they can anticipate and withstand disruption, as well equally back up environmental, social, governance and other sustainability practices. Companies volition be able to serve diverse customer segments through multiple active and responsive supply chains based on a network of shared avails. Ecosystems partners and digital technologies will be at the center of this shift in supply chain planning, all the way through to aftermarket services.

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