A fascinating insight is provided here by the German Prospitalia Group’s brand new CEO, Dr Marcell Vollmer, into the meaning of GLOCALISATION and the technologies that are crucial to ensuring a successful transition to this trend in the supply chains arena.
Nearly 75 percent of companies report supply chain disruptions in some capacity due to Coronavirus-related transportation restrictions, and more than 80 percent believe that their organisation will experience some impact because of COVID-19 disruptions. “The story the data tells us is that companies are faced with a lengthy recovery to normal operations in the wake of the virus outbreak,” says Thomas W. Derry, Chief Executive Officer of ISM.
Enterprise businesses, governments and small to medium companies are currently rethinking their supply chains due to the impact of the Coronavirus. Will Globalisation stop? Probably not, but there is an ongoing discussion to bring back production for critical supplies to have closer proximity to the consumer markets, like for masks, disinfection fluids or critical pharmaceutical substances. Even the term De-Chinatisation is used to transfer production capacities back. The trend of rolling back some manufacturing activities is applicable for critical goods for production to mitigate risks.
Glocalisation (combines GLObalisation and LOCALisation)
Glocalisation is the “simultaneous occurrence of both universalising and particularising tendencies in contemporary social, political, and economic systems”. Glocalisation is a “simplistic conception of globalisation processes” and “indicates that the growing importance of continental and global levels is occurring together with the increasing salience of local and regional levels” according to Wikipedia.
For global supply chains, Glocalisation combines the global sourcing for categories to benefit from labour arbitrage or competitive technologies with the proximity of local and regional availability of critical supplies. Glocalisation might impact the sole sourcing by having only one supplier, e.g. in China or the Far East, and being fully dependent on their capabilities to be reliable to deliver the goods needed at the agreed quality in time.
New innovations and technologies impacting Supply Chains
A supply chain can be defined in four simple words: Plan, source, make and deliver. Or by focusing more on the overall process, a supply chain includes everything between the quote-to-cash and source-to-pay process.
Seven innovations are key for supply chains to operate in the future, but also to leverage technologies to get full transparency and to run every aspect from planning goods & services, making or buying decisions including procurement, and the distribution to the customer (and the return). The following technologies are essential and will be briefly explained with a short description as well as real examples (use cases):
(1) Internet-of-Things (IoT) and Sensor Technology
Description: connected devices, sensor data from all spare parts of machines used for manufacturing as well as IoT along the entire supply chain. Basically all data from machines, including vehicles with GPS sensors are connected to the internet and used for monitoring and optimisation. Consumption data (including those in households) can get connected today.
Use cases: predictive maintenance can be used based on the real-time data collected. Digital Twin establishes a direct connection between the physical product (or asset) and its designed, manufactured and deployed digital representation in an ERP-System. Kaeser Kompressoren provides an optimised IoT service by SAP for customers buying compressed-air based on consumption. Walmart is using Bossa-Nova robots with HD cameras to monitor and check inventory.
(2) Autonomous vehicles transporting supplies
Description: News about autonomous vehicles is in the media on a daily basis. Tesla and Waymo are pacesetters combining electric vehicles with autonomous driving capabilities. The automation of transportation from a supplier to a customer with autonomous or partially autonomous vehicles (cars, trucks, ships, drones or robots) will revolutionise the increasing demand for logistics within or between regions.
Use cases: Robots take over last-mile deliveries (Fedex, Ford with Agility Robotics) or self-driving delivery trucks (UPS). Drones are delivering medical supplies during COVID19.
(3) Virtual Reality (VR) and Augmented Reality (AR)
Description: augmented reality enables technicians and other logistic functions to provide guidance during driving, loading or at any given time of transportation activity. Smart glasses or smart devices can guide warehousemen for pick-by-vision and lead them through unknown logistic centres to pick up the right material or deliver it to the right place.
Use cases: Latest generation of Glass Enterprise Edition by DHL for their worldwide logistics operations or virtual reality guidance through shopping areas for consumers.
(4) Digital Factory with 3D-Printing
Description: fully automated manufacturing in digital factories. Manufacturing of digitally designed products with 3D-Printing (SLS: selective laser sintering for metal or SLA: stereolithography for plastic).
Use cases: 3D-printed shoes according to the design ideas of customers by Adidas. Fabrication of spare parts, which are no longer produced, like Airbus, Boeing. Oregon Health & Science University (OHSU) to produce a low-cost version of ventilators for COVID-19 patients with 3D-printing.
(5) Robotics for warehouses and logistics (including the intra-logistics within a production site)
Description: self-driving conveyor vehicles and Internet-of-Things (IoT) connected automation for warehousing & consignment.
Use cases: robots or butler systems are transporting goods within a warehouse or to the production line. The human-machine interaction can also happen with exoskeletons. Amazon or Zalando are using autonomous robots for their warehouses.
(6) Process Mining for Supply Chain Analytics and Process Automation
Description: Capturing and integrating data sources to provide transparency, optimise and monitor all steps in a supply chain. From the farm to transportation to manufacturing to wholesales and retail, every step of a supply chain is critical and has to be discovered, enhanced and monitored. Process Mining is the technology providing all operational applications to derive actions from discovered frictions in a process to increase automation and allow consistent monitoring.
Use Cases: BMW as the leading automotive company is optimising their car manufacturing lines. Risk mitigation strategies can be defined based on unforeseeable events, like COVID-19. Merck ensures success with Robotic Process Automation (RPA) initiatives. Uber delivers customer service optimisation on a global scale.
(7) Business Networks with Collaboration on Cloud-Platforms
Description: Real-time collaboration is essential to react quickly to on-demand changes and to innovate across countries. Coronavirus is only one example which shows the need for immediate online collaboration via phone or video-conferencing. Control Towers are used to provide proactive information in case of friction or disruption in the supply chain. Insights in consumption rates for production, but also from customers, are key to reacting immediately.
Use Cases: BASF is automating the data interfaces with logistics providers for 31 production sites (AX4-platform). SAP Logistics Business Network provides a central entry point to manage logistics transactions. IBM has rolled out a Watson-powered machine learning algorithm for use in business supply chain management.
What’s next for supply chains and will Glocalisation be the next trend after #COVID-19?
Emerging technologies provide the capability of faster reaction to on-demand changes, real-time insights in all aspects of any supply chain with connected devices, and drive value to realise Industry 4.0. Investing in technology to bring manufacturing, supply chain and business processes to the next level is essential to get a competitive advantage and survive, even in times of an unforeseeable crisis, like COVID-19. Technology is also key to managing and monitoring supply chains independently if they are local, country-based or cross-regional.
By Dr Marcell Vollmer, Chief Executive Officer, Prospitalia Group