Part 2: New-Age Tech: A Supply Chain Lifeboat
Continuing our coverage of the Red Sea Crisis, we now look at how technology has redefined resiliency and how SCM is embracing the positive results on the back of AI/ML, powering scalability.
Home > Insight> From Crisis to Control: Technology Redefining Resiliency
In the first part of our coverage of the Red Sea Crisis, we highlighted how the global disruption has rejigged industries, challenged economies, and pushed the supply chain into an unknown territory. From efficiency spiraling down to inflation costs shooting high, the world of value chain management has a lot on its plate.
Carrying our scope ahead, we now look at how prominently the new-age technology is aiding organizations in finding new and seamless ways to carry out their operations.
The crisis has highlighted the need for real-time visibility and predictive capabilities in supply chain functioning. This is being achieved through investment in an AI-powered Control Tower, unlocking complete visibility through every stage of transit. Such capabilities cover proactive rerouting and predictive analytics to develop contingency plans.
Use-case: Notable retail and manufacturing conglomerates have embraced AI-driven platforms to aid them in weighing disruption scenarios. The technology has really come through, especially in minimizing downtime operations during severe unplanned bottlenecks.
Future Impact: By 2026, over 50% of large manufacturing conglomerates will adopt AI and machine learning for supply chain risk management. The investment is suggested to drive a potential cost saving of $60 billion globally.
Combating the severe unpredictability that comes tagged with maritime routes, organizations have diversified their logistics channels through multi-modal transportation. Through such hybrid models, the value chain operation stands to be more resilient as there is more room for collaborative risk-sharing among shippers and carriers. These joint ventures are significant functioning models more adept at sharing infrastructure and resources to ace challenging trade situations.
Use-case: Many logistics providers have started initiatives in the form of joint warehouse facilities and executing last-mile delivery networks. This has especially come in handy in Asia-to-Europe trade networks, where a combination of rail and air has resulted in intact efficiency and timeline adherence, with operational costs projected to be decreased by 10-15%.
Future Impact: Given its efficacy, the anticipated projected growth of hybrid logistics models by 2028 is set at 8% CAGR, with 35% of global shippers expected to participate in joint logistics ventures by 2027.
Citing prolonged uncertainty in supply chain operations, companies have reevaluated their inventory management strategies. With the decentralized warehousing model, organizations have achieved a reduction in delayed delivery timelines that started with the Red Sea crisis. Allowing flexibility in order fulfilment through multiple warehouses, the logistics operation found more adaptability.
Use-case: A prominent e-commerce giant has expanded its distribution network to regional locations, keeping them in good stead when fulfilling orders to local key markets. The plan is set to be more fruitful during peak seasons and unexpected disruptions, maintaining strong customer satisfaction levels and brand loyalty.
Future Impact: The strategy is expected to reduce stockouts by 20% and inventory holdings by 10-15%, with savings suggested around $70 billion across sectors.
The prominence of the data intelligence approach in the supply chain has taken center stage, and 3SC’s role is in the spotlight. With GenAI and deep learning mechanisms at the core, 3SC’s supply chain solutions have been known to build long-term strategies emphasizing resilience, adaptability, and proactivity. From giving a boost to sustainable operations to building a robust value chain framework that stands the impact of future uncertainties like the Red Sea, 3SC stands at its merit to deliver unparalleled value chain solutions across industries.
Disclaimer: We acknowledge the contributions of various sources referenced in this article, whose published content has greatly informed and enriched its content.