Riskier Supply Chains Call for Better Data, Savvier Strategy

Visibility

According to Jabil's survey, organizations have recognized the necessity of harnessing usable supply chain data, with 69% of respondents saying they have limited visibility and need more. 

But the pursuit of supply chain visibility is more than an exercise in data collection; it's an intentional strategy to use data to anticipate and circumvent disruptions before they evolve into full-blown crises. The goal of enhanced visibility should indeed be predictability, enabling companies to forecast issues and adapt strategies proactively.

Here is where the role of artificial intelligence can extend far beyond automating routine tasks. Two thirds (66%) of survey respondents are using AI and ML with predictive analytics to make strategic decisions about their supply chain activities, with 76% of respondents citing increased visibility as a key expected benefit of AI and machine learning adoption.

In the years ahead, AI will likely play a critical part in helping supply chain professionals navigate vast quantities of complex data in their decision-making. Therefore, it’s important that data governance strategies are implemented alongside AI deployments. By ensuring the data used in AI applications is standardized and simplified across our organizations, we can increase the efficacy of those applications once they get up and running.

Optimization

Optimizing supply chains to mitigate risk is critical for organizations to succeed in this era of disruption. More than eight in 10 (82%) of survey respondents said optimization for resiliency is a top priority for their organization over the next two years. 

To further this goal, companies can start by assessing the capabilities of the technologies they already use and performing a gap analysis to determine what other technologies may need to be added.

Building a customized, connected technology stack that provides decision-makers with a comprehensive view of their supply chain operations is one of the most effective optimization strategies.

Strategic technology selection is paying off for the respondents in Jabil’s survey, as almost all (93%) of them said the supply chain and procurement technologies their company is leveraging are providing measurable results.

Technologies like AI and machine learning have the potential not only to provide greater visibility into the supply chain to help organizations proactively manage risk, but also to create competitive advantages like improved efficiency and cost savings. For example, 70% of survey respondents expect to reduce their labor costs through automation, and almost two-thirds (64%) anticipate AI and machine learning will help refine their demand planning processes.

More than half (54%) of organizations think AI could even provide insights into how they can improve their sustainability—an emerging area of risk for companies around the world.

Sustainability

It’s becoming increasingly true that a resilient, risk-mitigated supply chain is a sustainable supply chain. As government regulations on companies’ greenhouse gas (GHG) emissions, waste and water usage tighten and stakeholder expectations rise, organizations around the world are putting a greater emphasis on sustainability.

Many organizations are already taking action ahead of expected legislative changes by developing processes for waste and energy reduction (79% of survey respondents), establishing sustainable procurement policies for their suppliers (74%) and sourcing materials and components from validated sustainable suppliers (68%). These types of sustainable shifts are not only good for the planet but are also strategic business decisions that support the long-term viability of supply chains.

Still, it’s fair to say sustainability has not hit its stride in supply chain. Only 23% of decision-makers said that supporting their company’s sustainability goals is a major priority for their supply-chain organizations. As regulations evolve, particularly within the European Union's (EU) landscape, that number will likely increase.

Companies doing business in Europe must anticipate and quickly adapt their supply chain strategies to stay in compliance with changing sustainability legislation, such as ReFuelEU to increase clean energy use in aviation and the EU ETS to reduce corporate GHG emissions. Navigating these requirements requires a collaborative effort between supply chain organizations and their supplier and customer partners.

As we forge ahead, the next global supply chain disruption is always just around the corner. Organizations must invest in capabilities that support visibility, optimization and sustainability, prioritizing actionable solutions to mitigate risk. Our industry’s capacity to anticipate change with a clear-eyed view of costs, benefits and challenges will dictate our success in creating supply chains that are resilient, responsible and ready for the future.