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It’s never good news
when the words “Supply Chain” are included in a headline. Something along the
line has gone wrong, and it likely affects several million people. Earlier this
year the Suez canal debacle grabbed headlines when a container ship beached itself.
The blockage exasperated a supply chain that was already under stress from
Covid-19 and cost roughly $6.7
million per minute.
Article by Indiana Lee
In the UK, Atul Kariya,
a partner at MHA, recently commented
that the labour shortages wreaking havoc on UK supply chains were “not caused by Brexit but has been worsened by restrictions on
movement as a result of Brexit immigration rule changes, in addition to
tax measures”.
The Suez Canal blockage and Mr. Kariya’s comments reflect
an underlying theme: supply chain issues rarely exist in isolation. Instead,
supply chain problems come in clusters. In the words of Jennifer Canstenon,
writing for Forbes, “it’s a messy
paradigm”.
Trying to establish a route through the mess of supply
chain management is tricky at the best of times. However, recent developments
in information systems show promising signs for the future. Widespread adoption
of artificial intelligence (AI) is going to take time, but business leaders are
already recognizing the potential risk-reducing
benefits of AI-led supply chains. Construction is one industry that may benefit
greatly from the wider adoption of AI in supply chain management, as it faces
unique supply chain issues in our post-pandemic reality.
Supply Chain Issue in Building
and Construction
Building and construction companies currently face a number
of supply chain complications. This is a serious issue as poor supply chain
management will lead to delays, fines, and inefficient business practices.
In the UK, Darren Dodd, of the Financial Times, has warned
that warehouses across the UK may run out of space within the year.
Further reports have found that 8 out of 10 builders are currently
facing a materials shortage.
The stress placed on supply chains globally will
invariably lead to higher costs, meaning that strategic leveraging of emerging
information systems like AI will be pivotal for those looking to remain on
track in construction and building.
Benefits of Information Systems
Complex information systems have been
informing supply chain management decisions for a number of years. However,
companies are now looking to leverage technological developments to boost supply chain resiliency and improve their
bottom lines. By adopting new information systems like predictive analysis, companies can make more
accurate forecasts of potential supply chain issues and can adapt their
practices in response to increasing demands or potential areas of slack.
Information systems can also directly benefit
the highly competitive building and construction industries. Knut Alicke,
writing for McKinsey, found that “early adopters to [AI]
improve logistics costs by 15 percent, inventory levels by 35 percent, and
service levels by 65 percent, compared with slower-moving competitors”. For
those in building and construction--who are often pitched directly against
competitors--a reduction of logistical cost and an increase in inventory
management efficiency of this level is impossible to ignore (particularly as
the idea of self-building continues to grow in the UK and younger generations express significant
interest in building their own homes).
Hires You Need to Make
In order to utilize information systems,
companies need to hire information system specialists. Information
system specialists are well-educated employees who combine various skills and
approaches. They are adept computer system managers and are capable of
maintaining and understanding key analytics, but they also have the ability to
look beyond the program and consider the business as a whole.
An adept information system specialist should
also be capable of managing teams, as supply chain management typically
utilizes an array of employees who assert their value and specialisms along the
supply chain.
Risks to Consider
The use of information systems in supply chain
management is not a clearly defined science. It is impossible to predict the
problems of tomorrow, and information systems must be redesigned to consider sustainability. In addition, AI relies on massive
amounts of data in order to make accurate predictions.
Currently, there may not be enough data for AI
to make accurate forecasts, and businesses that are transitioning to AI-led
supply chain management may be feeling some growing pains. That said, the utilization of
AI is all about patience. AI systems grow as data grows--as more data is made
available, AI will have a greater tolerance and will contribute massively to
the overall reduction of risk in supply chain management.
The Future of Building Supply
Chains
Researchers and business leaders are always
looking to align developments in information systems with
current business practices. Advancements in artificial intelligence and the
technology we use for shipping and handling can increase the overall efficiency
of a supply chain, which ultimately improves companies’ bottom lines.
While there will be significant growing pains
with all new technologies, the future of building and construction points
towards technological development and the adoption of AI in decision making.
Posted by Dr. Tim Sandle,
Pharmaceutical Microbiology Resources (http://www.pharmamicroresources.com/)