The autonomous supply chain – characteristics and benefits
Blog: Capgemini CTO Blog
In the first article in this short series, we considered the supply chain challenges organizations typically face, and the extent to which they have been complicated by current pressures. This time, we’re going to look at the autonomous supply chain model in a little more detail.
Everything shared, everything smart
The key characteristics of the autonomous supply chain include standardization, interconnectedness, and intelligence. When everything is uniform, shared, and smart, everything is visible, and it’s easier to anticipate events, to develop plans, and also to improve logistics. Indeed, operations overall can be cognitive and touchless, and decision-making can be data-driven and customer-focused. This is probably why, in a recent report conducted for Capgemini by NelsonHall, 100% of supply chain leaders surveyed said they sought end-to-end visibility of both supply chain information and supply chain performance.
For example, demand forecasting can be made much more accurate. Data on current orders can be supplemented by lead information, and real-time order changes and statuses can also be incorporated to ensure that forecasts are based on the most current information.
Real-time access to retailer point of sale (POS) data can also make a major contribution here. As part of this, machine learning has considerable potential, for example, increasing accuracy in demand planning and connecting interactions and decision-making in fulfilment. The results can be impressive: for instance, an international FMCG company has indeed significantly made its forecasting more accurate, and has also reduced its planning costs by over 25%.
It’s all part of what we at Capgemini call the Frictionless Enterprise – in other words, the smooth and seamless flow of information and collaboration between employees, their departments, and those with whom they work. In the case of the supply chain in particular, it also encompasses relationships with partners, customers, and obviously, suppliers. NelsonHall’s survey found that 94% of supply chain leaders sought supply chain standardization, and 88% saw the benefits of increased collaboration with external partners for planning and fulfillment.
There are additional benefits to the autonomous supply chain:
- It saves time – it eliminates many cumbersome day-to-day issues, so people can devote more of their day, and more of their energy, to longer-term and more strategic activity
- It lowers overheads – a frictionless flow of information will lead to improved inventory and logistics, enabling reductions in working capital
- It increases agility – when information flows freely, supply chain teams can anticipate and address exceptions more readily, improving overall flexibility and resilience
- It improves customer service –the NelsonHall survey reports that 98% of its respondents said supply chain automation was highly important – and they were right. Intelligent automation reduces exception levels, which not only lowers costs, but also reduces the need to engage customers in issue resolution. The result: more things happen without intervention or hassle, so more customers can more often simply make a decision, click, and move on, secure in the knowledge their order is safely in hand.
In short, an autonomous supply chain enables you to process more, faster, and with fewer errors – and at the same time create greater added value for your customers, while also achieving a healthy combination of margin and revenue increase.
A future of expert support
In the next and final article in this series, we’ll explore the current climate for the adoption of the autonomous supply chain approach. We’ll also look at critical success factors, and the support an external services provider can provide.
To learn more about the autonomous supply chain and its role within the Frictionless Enterprise, read NelsonHall’s full report “Moving to an Autonomous Supply Chain: An Essential Guide for Manufacturing & CPG Firms.”
Read the “Fast Forward: Rethinking supply chain resilience for a post-COVID-19 world” report by the Capgemini Research Institute (CRI) to understand how you can future-proof your supply chain for a post-COVID world.
Nilesh Kulkarni leads the Digital Supply Chain Solutions team for North America. He is an accomplished supply chain operations and change management leader, with over 14 years of experience in leading strategy and transformation initiatives.