Seeding Digital Transformation in Southeast Asia – Part 7: Building a Smarter Supply Chain

Part 7 of this 8-part series explains how Buttercup Spices enabled a smarter supply chain using Alibaba Cloud and how they can overcome challenges and bridge gaps between production and delivery.

By Shantanu Kaushik

Today's global marketplace is a volatile space with supply chains expanding globally. The supply chain is a fragile structure, and the speed of supply does not solve the challenges. Minor miscalculations can have major consequences throughout the supply chain. In this blog, we'll discuss the fictional Buttercup Spices DX strategy included major innovation towards the supply chain. As a product-based company, their supply chain must be a smart one. The factors that make a supply chain work efficiently are listed below:

1. Balanced Costing

Balancing costs is critical. Balancing the costs related to your supply chain solution provides a solution that fits the standard bill throughout the supply chain. Balancing costs helps you keep a buffer between cost spikes due to major inflation in wages and commodity prices. The supply chain includes logistics operation counterparts that are susceptible to fuel prices and other costs.

2. Better Visibility of Supply Chain Links

Visibility is a major management challenge with a supply chain. Visibility is required to get information and make informed decisions.

3. Customer Experience

Identifying what your customer wants can lead you to an effective supply chain practice. Organizations indulge more with their suppliers than they do with customers. However, technology has made it more feasible and easier than ever to work with customer feedback and design solutions focused on a detailed supply chain approach.

4. Risk Assessment and Management

Risk management is among the top challenges with a supply chain. We know that globalization and supply chain interdependencies have elevated the total risk factor related to supply chain management and have made it more complex to manage. Risk assessment needs standardization of processes, data collection, metrics collection (observability), and technological innovation inclusion in practice to lower the overall risks.

5. Reach

Supply chain global reach has brought along massive revenue growth for enterprises. A supply chain has to work through issues with supply gaps and poorly connected networks.

The Smart Supply Chain Solution

Buttercup Spices proposed the idea of a smarter supply chain for their product deliveries throughout Southeast Asia. As a product-based company, the face of their brand is not services. Alibaba Cloud was brought in as the digital transformation partner again. After considering all the demands and checklists of a smarter supply chain, Alibaba Cloud presented a solution:

1. Technological Processes

The use of automation and the inclusion of machine-generated metrics and information can help the supply chain brain make smarter decisions. The Internet of Things (IoT) is a technological marvel that can read data and instructions efficiently and execute processes based on the received information. This machine-led automation is based on sensors, RFID-based product tagging, GPS tracking, and more.

Buttercup Spices can enable automated inventory handling using IoT and RFID. While the products are in transit, the smart containers can reveal the content and quantity without human intervention. If a package is off track and headed to the wrong address, the GPS system can talk to the IoT device and send an alert to get itself back on track.

2. Interconnected Supply Chain

A well-connected supply chain makes a hassle-free solution. There could be more than one supply chain at play. These supply chains will be working for different regions while providing smart data to update inventory, billing, product cycles, suppliers, IT infrastructure, and customer experience. This centralized system processes data from different sources.

As Buttercup Spices have an existing customer base in multiple regions, they built this smart supply chain mechanism to enable more efficient product delivery.

3. Advanced Analytics and Modeling

Alibaba Cloud has been among the top players when it comes to data analytics and modeling. Solutions, such as DataWorks and DataV, provide top-notch data based on extensively refined analytics. Any smart system must know:

How the overall business has performed until a specific date (historical data)
What were the key challenges faced by the organization?
How can they handle future risks?
What points can they emphasize when formulating future strategies?

These questions can be easily answered using Alibaba Cloud Data Analytics and AI. This solution helps decision-makers evaluate alternatives against a complex and dynamic set of risks. This smart supply chain can also automate some segments of the overall process to enable faster delivery. This will enable the supply chain to communicate and collaborate without any human intervention.

4. Intelligence

You can incorporate the supply chain with business intelligence easily. The supply chain is a business process that focuses on product delivery, but it is also the beginning of customer relations and feedback. This means we can select a set of metrics or feedback can make real-time decisions and add to the data analytics modeling of your future strategy. Buttercup Spices was very interested in using data analytics to enable sophisticated modeling and simulations to predict the outcome of changes with your supply chain. This is as pure as business intelligence can get.

Running simulations allows you to manage your supply chain and take note of costs, service region, manufacturing potential, quality, and production to delivery times.

5. Flexibility

Flexibility is the most in-demand trait of a supply chain, especially for Buttercup Spices. Buttercup Spices has different product catalogs for different regions. However, after shifting to the cloud, they have a centralized approach to order handling. This enabled Buttercup Spices to leverage cross-region order fulfillment and expansion planning.

Flexibility is introduced into the system by interconnecting a network of suppliers, manufacturing, and service providers. This flexibility can help you gain control over a sudden surge in demands or stock loss in another region.

Wrapping Up

An intelligent and smart supply chain can be the difference between a successful and unsuccessful business. The supply chain must be a robust entity within your organization to enable an efficient business cycle.

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Seeding Digital Transformation in Southeast Asia – Part 7: Building a Smarter Supply Chain

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