How tech is reshaping supply chains

Advances in technology are rewriting the rules around supply chains, according to Hari Janakiraman, ANZ’s Head of Industry & Innovation, TB, placing deeply embedded trade systems around the world on the verge of disruption – and some even obsolescence.

Speaking at an ANZ customer event in May, Janakiraman said while it may sound like science fiction, technology like 3D printing could in some cases remove the need for shipping and handling all together.

“One good example I really like is professional golfers who are 3D-printing their own clubs,” he said.

“You don't need to walk into a golf club or shop anymore.”

For manufacturers in the space, this means no longer needing to “ship a physical product”, Janakiraman said.

“So if you [as a business] have a shipping issue, you can say, ‘I don't care about shipping anymore - I can send my product via internet and that can be printed'."

Janakiraman made the comments on a panel that also included Bronwyn Corbet, Executive Director, Sustainable Finance, and Simon Papagiorcopulo, Geopolitical Risk Manager at ANZ. The event was hosted by Jessica Iacobucci, Head of Sales Trade and Supply Chain, Australia and PNG.

Grounded

On a more grounded level, Janakiraman said businesses were already using artificial intelligence (AI) technology to help map out their supply chains, giving them a wider and more detailed view of their networks - and therefore risks - than what was available in the past.

While many businesses know "immediate suppliers very well and their immediate buyers”, he said, “the moment you go beyond that, it becomes a little bit murky”.

COVID-19-led disruptions taught the industry how important it was for businesses to fully grasp their supply networks, Janakiraman said, but existing methods of doing so are “very analogue”.

“It would take years for you to map,” he said. “Now we have tools [to] do it in a matter of three to four weeks.”

ANZ’s work with one client recently helped it map out “a few thousand” suppliers, according to Janakiraman, as part of a broader linked network (suppliers of suppliers and so on) of “300,000 to 500,000” – “and that is for one single corporation”, he said.

As well as the scope of these networks, the tech can provide company names, locations, and what they supply, according to Janakiraman – as well as valuable risk and compliance information around know-your-customer obligations and carbon footprints.

“Once you understand the supply chain, then it becomes a question of ‘how do you mitigate those risks?’” he said.

Approach

Tech is also changing how businesses approach environmental, social and governance (ESG) reporting when it comes to supply chains, Corbet told the event.

“One of the biggest challenges for companies at the moment is the heavy manual burden related to compiling climate data and emissions data, tracking and other ESG [indicators],” she said.

Technology will help business address that – and many other “challenges we're facing into [on the road to] net zero by 2050”, Corbet said.

“The use of AI and machine learning will really help make modelling more accurate and more predictable,” she said. “Where that will play into is [in] forecasting."

Future climate scenario modelling based on emerging technologies could help businesses make decisions around where to invest or which supplier to choose, according to Corbet.

Focus on the sustainability of supply chains will grow as regulatory expectations move beyond existing scope-1 and scope-2 emissions, she said.

“What we're really starting to see now is a big focus for companies on scope-3 emissions, Corbet said. “And that's all about the supply chain.”

Things

Janakiraman said tokenisation was another valuable technology for the future of supply chains, allowing participants in the network to easily “share information [they] deem relevant” on goods that pass through the chain.

The information can include what the commodity is, or whether there is a carbon offset associated with that particular product, he said.

“All that information in [one] line of software code which travels through the entire supply chain,” Janakiraman said. “And then that enables faster payment, [or] instant delivery [for] example.”

It’s also useful in the event of an incident like a product recall, according to Janakiraman.

“You can be very specific in terms of what particular supply chain, where that is an issue, [and] be much quicker than what you can be in the past,” he said.

Julia Bruhn is a contributor at ANZ Institutional Insights

You can click here to read ANZ’s The Future of the Global Supply Chain Report.