Supply Chain and Information Technology

By Daniel Cavallin, CIO at CELISTICS

 

CavalinToday’s Supply Chain is evolving, from planning to retail. With the high levels of automation that ERPs and logistics system have today, the main concern is no longer modeling the process and configuring the system, the new optic is based on information. Are we capable enough to make decisions after analyzing the data that our systems report? Are we intelligent enough to predict a behavior in our clients and have a good estimate of the demand? Well, I think that we are farther away of this goalevery time, but there is a solution.

In Supply Chain, and specifically in the case of the 3Pls and logistics operators, we know a lot of our clients, we share information of warehouse’s inventory, channels inventory, planning, transportation, and more. Therefore, the company that handles the Supply Chain has the power to analyze allthe data and create patterns, information, and ultimately business. Again, humans have a limited capacity to handle huge amounts of information, the Dashboard is not good enough. It’s the time of machine learning, it’s the age of algorithms, the algorithms of things era is born.

Algorithms alone are statics, the capacity to modify the algorithms creating new business rules and analyzing the data, is in fact Artificial Intelligence, and this is the core of the machine learning concept. We are at a point where we need computers to adapt, as Darwin said: “It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is most adaptable to change”.Therefore, if you are a CIO and think that your company is going in this way, it is time for you to start hiring data scientists, mathematicians, and people that can provide this level of analysis to create systems that can modifythemselves.

Another topic that makes this scenario even more complex, is the growing world of the Internet of Things. IOT is creating data, big data. IOT is creating interfaces, a lot of them. And again, it is not about an app in my smartphone where I can close down the curtains of my house, when the IOT explodes, we are not going to have time to think about it, we are going to need the system to close down the curtains of the east side of the house in the morning and keep the others open, for example. We need things, but we need them smart, intelligent.

In Supply Chain, the IOT is a reality, the boxes have RFID, the trucks haves GPS, everything is connected. When a smartphone is activated in a retail, the system knows it, the behavior of the consumer is adjusted, and our algorithms need to adapt.

Of course, in order for a technology department to confront these ideas, they need a level of maturity, the infrastructure, Cloud or On-premise software, the Business Applications, the quality of data. All of them to be, not perfect but acceptable. Not less important is the capacity of the IT department to handle projects in a precise way, and the capacity to offer services and support to all the workers in the company is a must. Otherwise, the CIO will be focused on other matters and this advice will only look futuristic and unreachable.

The information era is evolving, the companies are changing, and the main IT role in any industry is to lead a Technology Transformation. This sounds complex, but the key is to keep it simple. Every step has to be clean, easy to understand for the organization, and it can never be pushed by IT alone, all the C level has to agree toimpulse changes, to invest in information and intelligent ways to make it valuable and adaptable.