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Supply Chain Monitoring: What Is It? How Does It Work?

Prewave Supply Chain Monitoring 101

A timely response to crucial events within the supply chain could spell the difference between falling behind and getting ahead of the competition.

In fact, International Data Corporation (IDC) recently found in their 2020 Global Supply Chain Survey that, “After years of being relegated to support status, the supply chain is now perceived by manufacturers and retailers as a strategic tool for business performance and growth.”

But how can an enterprise ensure that it is in the know of every important detail in its supply chain? What does addressing critical supply chain incidents entail? That is where supply chain monitoring comes in, and this post takes a deep dive into its basics.

What Is Supply Chain Monitoring?

Supply chain monitoring is the general process of tracking various operations and events in the supply chain—i.e., from the time enterprises order raw materials or parts from suppliers until the final products reach customers’ doorsteps. Essentially, it is part of the overall operational supply chain management. The process involves a broad range of activities, such as keeping an eye on logistics and other intricate operational processes and evaluating specific supplier risks. 

One of supply chain monitoring’s ultimate goals is to detect disruptions as early as possible to avoid adverse effects on the entire business operation.

What Are Some of the Examples of Supply Chain Monitoring Activities?

Part of supply chain monitoring consists of locating and tracking the status of assets, such as raw materials, final products, and human resource personnel, in a timely manner. Internet of Things (IoT) solutions are often being deployed to address this need. Data from IoT sensors, for one, can provide companies with real-time information about their inventory, and eventually increase supply chain visibility. 

One example would be the possibility to continuously monitor the temperature of pharmaceutical products to ensure their quality. COVID-19 vaccines, for instance, must maintain certain temperatures; otherwise, they are rendered ineffective. Therefore, monitoring its condition in transit is crucial to guarantee the vaccine’s efficiency. 

At the other end of the spectrum is the need to ensure that suppliers don’t pose risks, or such risks are detected early on, at the very least. An essential aspect of supply chain monitoring is, therefore, concerned with gathering supply chain risk intelligence. This involves screening partners and suppliers for a range of potential issues using online platforms. The objective is to be among the first to learn about certain events that could impact the supply chain. Such events can include natural disasters, industrial accidents, and consumer-related issues, among others.

What Can Be Detected through Supply Chain Monitoring?

An interruption to any aspect of the supply chain can have adverse effects on an enterprise’s bottom line. A delay in the delivery of raw materials from a single supplier, for example, can create a domino effect and result in unfulfilled customer orders. Needless to say, customer satisfaction, sales income, and business reputation are on the line.

By monitoring the entire supply chain, enterprises can prepare for or avoid possible disruptions. Some of these disturbances are listed below.

Production Equipment Repair 

Production equipment is naturally subject to wear and tear, and unplanned repairs can tremendously affect an organisation’s operations. As such, keeping track of the production line equipment’s health is a significant component of supply chain monitoring. Technologies, such as IoT sensors, can help enterprises by alerting them to the possible need for repair, allowing time to schedule these on lean seasons.

Logistics Issues

A common cause for supply chain disruptions relates to logistics. The transport of goods could be affected by a wide range of factors, including natural disasters, traffic congestion, and unprecedented weather conditions. However, technologies, such as sensors and Global Positioning System (GPS) devices, can help relay new routes to avoid possible causes of delay. Companies can also rely on end-to-end monitoring platforms to gain better visibility into their supply chain—e.g., to uncover logistics blind spots or optimize decisions with regards to route planning. 

Cyber Attacks 

A cybersecurity incident in the network of a supplier, vendor, or partner can be a major threat to an organisation. Not only can it disrupt operations, but also expose their networks and sensitive data to the same threat. That’s why it’s crucial for enterprises to monitor their suppliers’ cybersecurity integrity and, at the same time, prepare for unexpected cyberthreats.

Failure of Suppliers and Partners to Deliver

Detecting delivery delays from the suppliers’ end could be challenging for enterprises, but it is of utmost importance. By predicting how a supplier or partner might perform as part of the supply chain, enterprises can make better business decisions. That involves using machine learning (ML) to listen in on real-time news and gather data about a supplier to create relevant alerts.

For instance, after receiving an alert that a hypothetical “Supplier A” is facing labour unrest, an enterprise can immediately contact the vendor for confirmation. Furthermore, the company can already start planning where to source the same products in case of nonfulfillment. 

Supply chain risk monitoring also helps answer these questions:

  • Are the suppliers or partners reliable?
  • Have they been involved in large-scale incidents in the past?
  • What news and events could affect the supplier’s performance?

How Supply Chain Monitoring Works

By now, it’s clear that technology, most notably IoT and ML, plays a vital role in the way supply chain monitoring works. Some of the most frequently used instruments for monitoring include supply chain management software platforms, supply chain analytics solutions, as well as cloud-based tools to reduce costs and improve collaboration with partners. Enterprises use these to keep track of every relevant aspect of the supply chain, which allows them to gain valuable insights and avoid supply failures. 

ML, in particular, can further give supply chain monitoring a broader scope. Real-time and up-to-date data about suppliers can be gleaned and analysed, regardless of their location or language. As a result, risk alerts are generated, allowing companies to respond to events faster. Here’s one example of how this works. 

Prewave detected a pollution warning regarding the ArcelorMittal plant in Taranto, Italy, as early as 15 August 2019. Our Supply Chain Risk Intelligence Platform continued to pick up warnings (and in turn send out alerts to affected clients) over the ensuing months, including the closure alert in December 2020. On 14 February 2021, the plant was finally shut down.

In effect, informed enterprises working with the ArcelorMittal plant in Taranto as a supplier had more than a year’s notice from the first pollution alert in 2019 until the recent closure. Early notices enabled them to start taking early actions, where adequate, and implement the necessary safeguards.

Prewave is a Supply Chain Risk Intelligence Platform that helps enterprises understand their global supply chain by providing alerts based on real-time data. The platform enables supply chain management specialists to discover and predict supply chain risks based on historical data. For more information on how Prewave can make your supply chain more resilient, feel free to contact us.

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