Pipedream or Reality: Why Digitally Connecting the Supply Chain is the Only Way Forward
AUTHOR: WILLIAM CASWELL
Digitisation is sweeping across the world, transforming businesses, entire industries, and forever changing the human experience - and the supply chain isn’t immune to its transformative effects.
In fact, digitisation - and the ongoing global adoption of Industry 4.0 - unlocks visibility, and completely transforms the operations of a supply chain network, company or procurement process.
Better still, the next-level technology empowers developers, suppliers, and general contractors by providing them with real-time information as it happens - cutting the time it takes to make strategic decisions, and boosting operational efficiency.
So, what can digitisation do for the supply chain?
A lot actually.
For starters, improved productivity; reduced risk; and certainty of supply are just some of the top benefits. And as the linear supply chain continues to transform to a value network orchestrated within a connected ecosystem of construction participants, these and many other benefits will continue to surface.
For example, digitisation of the supply chain provides greater visibility and boosts control as it uncovers ‘visibility’ issues on active construction projects. This allows project teams to manage upstream risks linked to large or critical path orders, which can impact the profitability of an entire project.
What’s more, digitisation of a supply chain enables three core outcomes:
- Virtual connections between all parties to enable electronic communications/ collaboration;
- Storage of all business documents in electronic format in a bid to share documents electronically; and
- Electronic tracking of product flows through manufacturing and shipment to enable clear visibility and responsiveness to variations in supply and demand.
Hurdles to clear
But let’s not jump ahead too quickly. Before the built world can completely transform the supply chain - and take advantage of digitisation on a large scale - there are several hurdles to clear.
In fact, there are five main challenges:
- Inability to scale to deliver quality outcomes consistently;
- Risk of margin erosion due to delay and fragmentation across the supply chain;
- Poor visibility across the supply chain quality compliance and provenance;
- Expensive on-site workforce wasted on non-value added activities; and
- Information asymmetry between different stakeholders.
What’s more, the industry has traditionally been slow to adopt digitisation and is continually bogged down in the ‘manual chasing’ of information through repeated phone calls and emails. There’s even the flawed, yet accepted communication practice of siloed information gathering - whereby the ‘sole reliance’ on a specific individual to get access to vital information is the norm.
What these and other disconnected processes speak to is the fact that the construction industry is generally behind the curve in adopting digital technology. For example, many contractors, sub-contractors, distributors and suppliers tend to be local to projects and don’t have sophisticated means of tracking and communicating supply information outside of their own organisations.
But once these and other issues are ironed out, and surmounted, the vision is to secure a digitally connected supply chain that provides transparent access to more timely information (better information), which enables more informed decision-making and improves business performance.
Part of that vision is about re-engineering processes and digitising documents. The other part is about improving communication and the ability to collaborate electronically.
And while the face-to-face meeting won’t be eliminated due to the fact that the context of a building project can’t be fully understood without discussion between the parties, the only way forward and to get full control of the supply chain is to digitise communications and operations.
Real-time info anytime, anywhere
Certainly, the goal of digitisation is to provide real-time information as it happens – anywhere, world-wide 24-7. In other words, it’s about being more agile. When all stakeholders have access to great information at their fingertips (and everyone on the project has the same information), they can make better decisions at the coal face.
In fact, having a smooth, streamlined and transparent information sharing process across the construction system is what Industry 4.0 is all about - and even gives greater insight into unforeseen issues.
Let’s think of it this way – and consider two practical examples:
- A late shipment of façade panels might cause delays to other works across a project. But with greater access to data insights, these can be detected early so any impacted works are rescheduled as soon as possible.
- During the global health pandemic, supply chain data provided stakeholders with a much better understanding of the location of supply products, which, in turn, helped manage the flow-through impacts on any active project or worksite.
Indeed, digitally enabled processes increase the speed at which users interact with the supply chain. At the same time, costs are reduced by virtue of efficiency and time savings.
By digitising the supply chain, stakeholders get real-time information in a timely and meaningful way, which allows for the delivery of better business projects. Teams and businesses access information that’s crucial to delivering successful projects.
This signals two main benefits:
- It creates a system to collect and move information from analogue sources to digital formats that are more easily managed and shared. The analogue information is combined with other digital native information.
- It organises the digital information into a structure that allows it to be easily shared, updated, tracked, and acted upon.
Finally, the now digitally organised information is available for use in defining and managing work flows, data analysis, and for decision-making to be used to manage and improve the performance of work necessary to supply materials to job sites at the right time, in the right sequences – and with this information available to all that need it just in time to support their responsibilities and involvement.
In a perfect world, digitisation provides instantaneous access to supply information, allows for rapid response to changing conditions and creates a transaction record that documents the entire process.
Solving ‘disconnect’ with one common platform
So, how can developers, suppliers and contractors - or any other industry stakeholder – get supply chain automation and consistent access to real-time information to solve some common industry challenges?
Implementing one common digital platform like Lendlease Podium - that connects all supply chain ecosystem participants - and provides a core set of tools and services to enable supply chain processes is part of the answer and one practical solution to the traditional dysfunction plaguing the supply chain.
Enter Lendlease Podium, a platform that automates, digitises and optimises existing processes to add value and reduce complexity of transactions.
As part of the plan for a connected ecosystem, Lendlease is offering solutions from Podium Envision to automate the building design; as well as Podium Supply Automation to digitise the flow of supply (i.e. manufacturing/transport) into the construction of a building. Podium Supply Automation, for example, is being designed to offer visibility, as well as the ability to monitor the status of product flow and alert stakeholders to deviations.
This is a big step forward for the industry: The implications of putting data into the hands of people - where and when it’s needed - is a game-changer. In fact, in this newly digitised world, all stakeholders (including developers, designers, manufacturer, suppliers, general contractors and subcontractors) get access to the data that’s relevant for them to provide their respective service.
Better still, the fact that all data is stored in a single data set that’s shared by all stakeholders across project teams (including project engineers, construction managers, operations managers and procurement teams) is yet another reason to build this connected ecosystem, and yet another value proposition.
Get onboard the digital wave
Undoubtedly, in the age of greater access to information and greater transparency on the lifecycle of industry products - and the fact that communication is so crucial in the daily lives of construction workers - it’s time for the construction sector to join the party.
On a granular level, end-to-end transparency is the initial goal and can be the ultimate goal. But beyond transparency, there are opportunities to add proactive monitoring of shipment status against a plan, with alerts to notify users of deviations from the plan. In addition, analytics could provide possible alternatives to help recover the plan.
And as these and other opportunities continue to emerge from the digitisation of the supply chain, the industry needs to think big: Work off a common platform to ensure information can be well managed and that the supply chain runs smoothly.
Let’s think of it as a supply chain marketplace that can deliver straight to site – who wouldn’t want this reality?
Connected supply chain empowers people:
Developer: Better visibility into supply options, access to supplier early engagement and better control over costs and delivery schedule; ability to free supply preferred supplier products to contractors.