Weather The Supply Chain Storm with Digital Technology

By Hans Thalbauer, SVP, Extended Supply Chain and IoT, SAP

Hans Thalbauer, SVP, Extended Supply Chain and IoT, SAP

Natural disasters are occurring with alarming frequency. With the mudslides in California, hurricanes in the southern United States and Caribbean, and earthquakes in Mexico and Pakistan, and rising floodwaters on the Seine River in France. This devastation is often exacerbated by the lack of supplies reaching the hardest hit areas, stalling relief efforts and prohibiting victims from getting the assistance they need. The ripple effect of the disaster can be far reaching,disrupting economies beyond the local damage and preventing raw materials and other goods from reaching their final destinations.

While we can’t fully plan for these natural disasters, smart enterprises will have contingency plans in place to ensure their operations are not interrupted due to an unforeseen event. The most successful plans will be built with insights and support from the latest technological innovations. Here’s a look at how these new technologies can be leveraged for disaster prepping your supply chain:

Blockchain: There is a lot of interest in distributed ledgers across a wide variety of industries, and we are seeing immediate uptake in logistics and the supply chain. Blockchain has huge potential to better track and trace materials back to the source, prove authenticity and origin, get ahead of recalls, and accelerate the movement of goods.

When it comes to the shipping and delivering of goods during a natural disaster, blockchain’s benefits are twofold– 1) it can be used to speed up delivery times, and 2) it can be used to ensure that the goods being delivered to those in need are legitimate. As soon as a storm ends, it’s critical that any affected disrupted supply chains resume running quickly. Blockchain can help reroute and keep track of global shipments faster and with shared visibility to all participants. Regarding legitimacy, price gouging has become an unfortunate consequence following natural disasters, contributing to an increase in counterfeit goods from those looking to make a profit off the less fortunate. Blockchain can ensure that all goods are in their original state, safe for human use.

Digital Twins: A digital twin is a virtual representation of a physical asset. Paired with data collected using machine learning and artificial intelligence, digital twins can help prevent operational problems before they occur. They also can enable new insights and business opportunities by using simulations.

"Blockchain has huge potential to better track and trace materials back to the source, prove authenticity and origin, get ahead of recalls, and accelerate the movement of goods"

Perhaps most critical in disaster preparedness and response is the ability of digital twins to reduce the need for physical inspections. Because digital twins can dynamically change in close to real-time as the state of a physical object changes, operators are able to see whether there is a problem with one of their assets, immediately, but more importantly, without being there. For example, when Hurricane Harvey swept through southern United States, it affected at least 10 oil refineries, causing operators to shut down wells and take pipelines offline. Having a digital twin in place could enable operators to monitor the health of their wells and other machines from safer locations during the storm.

Predictive Analytics: When talking about natural disasters, many people immediately think about relief efforts instead of the preparation that can mitigate risks beforehand. That’s why ahead of a storm, we typically see barren store shelves, with no water or bread in sight. But as supply chain managers, we can and should account for this increase in demand. Predictive analytics can help anticipate future behavior and outcomes based on actual historical data from supply chain systems.

Predictive analytic software leverages automation and machine learning to give supply chain managers real-time insight and a greater understanding of upcoming demands driven by a hurricane, flood or other disruption. Managers can also run proposed scenarios to ensure that they are well prepared to handle whatever mother nature may throw their way.

With global warming contributing to the frequency of natural disasters, disruptions show no signs of slowing down. As supply chain managers, we can change the way critical goods and relief supplies are provisioned before and after a disaster. Ultimately, we have a responsibility to ensure that our supply chains are well equipped to handle a storm, not just for our businesses, but for those that depend on our products and services. When we consider the gains in digital technology available today, being well prepared and even one step ahead—can be much easier than it used to be.

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