Sweeping market changes, capped by a global pandemic, have made it clear that supply chains, long managed to be cost-effective and reliable, must also now be resilient and sustainable. Making this resilience a reality, however, requires executives to have visibility into how materials and goods enter and move through the chain, as well as the ability to trace inputs and outputs all the way to the hands of the customer.
Yet, new research from Bain & Company and World Economic Forum finds that fewer than 15 percent of executives feel their current capabilities allow them to deliver consistent traceability.
Meeting growing demands from stakeholders for sustainable supply chains means executives must have a view into what is happening across their supply chain and the ability to trace items as they travel from field to factory to customer (and beyond).
A majority of companies have started to build some capabilities, but most give their efforts low marks for sophistication as they struggle to scale them, integrate them or realize business value. Unreliable or nonstandard data top their list of common barriers to traceability, with technical and organizational barriers close behind.
In their joint report, Bain & Company and the World Economic Forum find that the journey toward traceable supply chains involves four key steps for companies:
- Carefully defining how visibility and traceability will provide value. To produce the greatest benefits, companies should pursue visibility and traceability approaches that are closely tied to their business and customer strategy.
- Mapping out the data model and collecting the necessary data across the supply chain. Despite vast amounts of siloed, partially structured data, companies often still find the data they need doesn’t exist in internal systems—or isn’t available at all. They must learn how to integrate external data sources, including logistics systems and suppliers’ ERPs, and how to begin collecting critical data that is not available today.
- Assembling a next-generation technology stack to facilitate data collection, analysis and sharing. When evaluating the market, companies should consider how these new systems will fit into their current systems landscape. Some systems will primarily serve as source for required data while others will be the enablers for aggregation, analysis, and sharing.
- Implementing the right data operating model both inside and outside the company. Effective data sharing starts inside each company by overcoming silos to create a single source of truth for relevant data. Companies need processes, systems and talent for data collection, cleansing, and analysis to turn data into insights that can fuel business decisions. Only then can they figure out the right way to share the data with ecosystem partners. Companies also need to consider who owns the shared data and the resulting analyses, and figure out how to ensure strict privacy for the source data.