Sustainable Supplychain with Smart Technologies

Accelerating value-driven Supplychain with Digital Twins"

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Inspiration

Global supply chain is an integral part of almost every business, comprising a wide range of chain of events from Factory to Front door - design, planning, procurement of raw materials, manufacturing, managing & handling entire production, inventory, flow of goods & services up to final delivery of ordered goods to customers. Global disruptions & unforeseen incidents have mandated to bring end-to-end visibility, build ways for resilience in creating successful & future proof supply chains. Supply chain management encompassing optimal execution of activities from production processes to delivering products to right customers, is adopting transformational potential of digital technologies to unlock traceability, real-time monitoring, effective decisions in increasing operational efficiencies & step towards sustainability.

Another factor profoundly impacting supply chain are customer purchasing behaviours. With easy access to information customers are increasingly influenced by Environment, Social, Governance (ESG) principles & initiatives adopted across supply chain. Hence businesses are also embarking on their journey towards more sustainable supply chain, as they thrive to build strong & lasting customer relationships founded on trust & mutual relationships. Sustainability has enormous potential to spread good business practices across the globe, while delivering tangible & lasting benefits to suppliers, business & customers.

Another primary driver pushing retailers to innovate & push boundaries to find new ways of enabling commerce & shopping experience is new generation consumer demands.

But real-world supply chains are dynamic & complex in nature & affected by below challenges:

  1. Difficult demand forecasting - Increasing Price pressures & Global crisis is leaving suppliers & retailers without a forecast model as to how much inventory to stock or manufacture at any given time
  2. Gaps in communication - No tools for effective data interchange, thereby significantly reducing transaction speed, efficiencies, and accuracy
  3. Poor SKU management - Unable to forecast & manage inventory levels leading to high holding costs due to stockpiles, increase warehousing cost due to frequent stockouts & less available capital
  4. Changing consumer demands - Outdated fulfilment process is causing delays in delivery & returns resulting in negative impact on brand reputation
  5. Environment Social Governance (ESG) - Regulators & consumers are placing increasing pressure on businesses to make greater sustainability commitments

Eco-efficiency, technology & resiliency are opportunities business needs to consider to tackle supply chain challenges. Sustainable & highly productive supply chain requires continuous redesign & optimization of overall processes to overcome inherent challenges, anticipate disruptions, test potential breaking points, withstand setbacks & keep achieving excellence, to reap many rewards along with being strong driver of value & success

What it does

Companies are making progress towards sustainability goals with 3 key levers - resource efficiency, circular economy and energy transition and developing innovative strategies to redesign processes & products with short-term & long-term transitions. Businesses are approaching these shifts with fundamental rethinking of current business models, as well as embracing emerging tools & technologies to meet new objectives for overall success

Complexity of tradeoffs between business profitability, quality & sustainability is daunting task. Companies are working hard to anticipate risks, demonstrate company values, enhance governance practices, increase overall satisfaction, and ethical business approach to demonstrate progress & achievements in these areas. Sheer volume of information to be analysed & the need for agility & scenario development creates unique challenges. Digital solutions provide more transparency, traceability, analysis & data-driven insights to address inherent supply chain challenges with target-oriented approach to achieve operational excellence, integrity & sustainability goals.

Ours is a prototype solution that can be leveraged by companies to build more resilient supply chain design & planning by embracing eco-efficient complementing technologies Cloud, Digital Twin, APIs, 3D Rendering, 5G & Edge Computing, Artificial Intelligence (AI), Internet of Things (IoT), Blockchain to:

  1. Provide greater visibility across supply chain to identify patterns & discover opportunities for improvements
  2. Stress test supply chain embracing dynamic, continuous designs, resolve challenges in dynamics & behaviours
  3. Discover bottlenecks early on, monitor risks & test contingencies, take actions to eliminate inefficiencies & optimize current processes
  4. Plan alternate logistics, routes, suppliers, raw materials & optimize inventory to reduce carbon footprint while meeting profitability & sustainability targets
  5. Analysis of financials, KPIs, iterate responses to bounce back quickly by testing operations while reducing cost of recovery
  6. Enable procurement & finance empowered with data needed to adapt quickly to changes in demand, production & make decisions that improves overall business objectives
  7. Run multiple scenarios in parallel & shorten the time to answer different questions in different areas, show the tradeoffs to conclude best strategy & pivot quickly
  8. Create a playbook of options with comparison analysis to respond to crisis before they happen & bridge potential points of failure without involving all departments or impacting their productivity
  9. Make supply chain more mature, efficient, effective, agile, resilient & sustainable

How we built it

Sustainability imperative has taken great momentum as economic situations, regulations, investors & customers are demanding more measures to improve environment & social responsibilities while seeking transparent reporting. Taking data first approach to accelerate sustainability progress, we leveraged the potential of Azure Cloud Platform & Digital Twin technology, as a bridge between physical & virtual worlds, to 1. Collect Data, 2. Analyze Data, 3. Run Simulations to Make Predictions, 4. Visualize Insights, 5. Enable Data Driven Decisions, 6. Optimize & Run to improve visibility, operational efficiency, mitigate risks, uncover new business opportunities & to fulfill sustainability agenda. By simulating real supply chain players & functions using digital twins to monitor, predict and simulate scenarios in supply chain, better utilize resources, optimize supply & transportation networks, reduce carbon emission to future-proof processes.

Data is everywhere, channeling this to have unified view across the supply chain, reduce environmental impact of operations, build sustainable IT infrastructure has been key focus of our MVP leveraging the right technologies. Lot of our clients have spoken to us about the challenges they are facing in their supply chains. They have volumes of siloed data in their custody but monitoring & managing requires tremendous effort & struggle to make meaningful sense and optimize their end-to-end supply chain.

*What we did? *

  1. Created an application, which gives Supply Chain Manager (SCM) end to end view with modules for Supply Chain, Factory & Warehouse Key Performance Metrics, Supply, Fulfilment & Logistics Planning to get holistic view of supply chain health right from sourcing, manufacturing, shipping, fulfilment & inventory management for timely order delivery & entice customers.
  2. In MVP, power of Digital Twins were leveraged to create models of Factory, Warehouse & Logistics. Each model is represented with associated attributes. Digital Twin extends model properties, an entire taxonomy is created which gets updated in real-time based on data from multiple siloed systems.
  3. 3D models representing the digital twins are associated certain behaviors like inventory count, shipment status. 3D models shows a visual representation of the entire process seamlessly. Based on the behavioural changes, the application can be configured to trigger certain business processes automatically like inventory procurement in case of stock out at a certain plant or sourcing of raw materials from alternate suppliers due to global disruptions.
  4. ESG & Carbon Emissions scores for each shipment calculated and alternatives recommended to give organizations options to view sustainable procurement spends.
  5. Better decision making by weighing in all available options.

Azure services leveraged:

  1. Azure Digital Twins
  2. Azure Storage
  3. Azure Front Door
  4. Azure Functions
  5. Azure IOT Hub

Challenges we ran into

  1. Supply chain is a huge epic, breaking it down into pieces and building use cases where Digital Twin can really help optimize is the biggest challenge
  2. Understanding sustainability equations, calculation standards & assessment services that can be leveraged to provide authentic scores. Thankfully Microsoft Cloud for Sustainability, Principles of Sustainable Software Engineering, Microsoft partnership with Green Software Foundation for Azure Workload optimization has helped us to choose the best possible combination of services.
  3. Creating 3D models digital twin model graphs for representation of complete supply chain network.
  4. Initial understanding of the DTDL language.
  5. Connecting to data sources for real-time updation & insights.

Accomplishments that we're proud of

  1. Azure has committed to focus on four key areas of environmental impact to local communities—carbon, water, waste, and ecosystems. So, we are glad to have used an ecosystem which is looking toward being carbon neutral in the years to come.
  2. With lot of organizations on the path to build a greener planet, we are proud to have built a POV which focusses on how to better optimize the resources and align to the ESG goals to make the planet a better place for the future generations to come.
  3. Being a partner of Microsoft, we had access to preview versions of services. Collaboration with Microsoft Subject Matter Experts, Partner teams to mature service features has been great.
  4. Microsoft's Supply Chain Platform, a recently introduced platform, bringing best of Microsoft applications in a composable way, to design supply chains for agility, automation & sustainability has reinstated our bets in resolving Supply Chain complexities faster in standard, secure & robust way.

What we learned

  1. Organizations are tasked to bring down carbon emissions in the years to come. While technology has always been an enabler, leveraging technology to help organizations reach to the goal faster has been a key take away. We learnt a lot about ESG, Sustainability and how even architecture, software & services can be configured to contribute towards ESG goals.
  2. Microsoft's portfolio of sustainability offerings, is empowering to unlock, build & scale to adapt capabilities & meet demands quickly

What's next for Sustainable Supply Chain with Smart Technologies

  1. Currently MVP is ingesting static data from multiple systems & centralizing to overlay in layers. Evolve MVP to bridge gaps, choose right technology, extend data models with real-time sources to provide unified insights, accurate planning & accelerate sustainability progress.
  2. Build full blown co-sell ready solution to scale sustainability transformation, market outreach & offerings with plug n play connectors to legacy & custom systems, innovative services to realize scenarios, build brand trust, enhance efficiencies and unlock new service opportunities.
  3. Provide differentiated value & growth drivers with evolving standards of ESG capabilities & Sustainability specific platform Microsoft Cloud for Sustainability, Microsoft Supply Chain Platform, Sustainability Engineering, Well-Architected-Framework Sustainability Pillars & Green Software recommendations for flexibility, extensibility to deliver greater value to customers

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