Facing the far-reaching impact on Asia Pacific supply chains from the evolving pandemic, cyber-threats and the Russia-Ukraine war.

As countries in Asia Pacific struggle to deal with the evolving pandemic situation – opening and closing of borders to manage the surge in Omicron cases, including reports of lockdowns in China due the outbreak of the contagious variant – businesses must begin exploring new solutions or risk being a laggard.

In such times of uncertainties – when supply chains are impacted by infectious viruses, cyber-threats and the Russia-Ukraine war – this is where data analytics and business intelligence come in.

Data analytics and business intelligence are useful in helping businesses understand their immediate needs in the supply chain. They can also help predict whether a shortage or another supply chain issue will have secondary or tertiary impact on their business.

DigiconAsia discussed with C K Tan, Senior Director, Solutions & Value Engineering, Qlik how, with real-time data and insights, businesses can better understand correlations to make data-driven decisions to mitigate supply chain disruptions and other business issues.

C K Tan, Senior Director, Solutions & Value Engineering, Qlik

How major a disruption has the evolving COVID-19 Omicron situation had on the global supply chain? What about in Asia Pacific?

Tan: With the ongoing supply chain disruptions, supply assurance has been the most significant challenge. We see more suppliers failing to meet new requirements, and companies are expediting shipping to keep the critical chain flowing.

For instance, the global semiconductor shortage, sparked by pandemic-influenced demand spikes, has caused production lines to shut and orders to remain unfulfilled. In Asia Pacific and Japan, this same shortage has impacted multiple industries, such as the automotive and high-tech industries, putting them under severe stress.

These industries suffered revenue loss and brand damage, which caused consumers to turn to their competitors.

What are some secondary or tertiary impacts disruption in the supply chain could have on businesses that we need to be aware of?

Tan: Companies are finding ways to mitigate shortages in raw materials and semi-finished parts. Many have increased the number of days of safety stocks to ensure they have sufficient inventory to fulfil customer orders in the long run. However, in doing so, the cost of carrying additional stock, including transportation and storage, ties up the business’ working capital which directly impacts its bottom line.

If the demand does not match up due to obsolete components or shifting consumer behaviors, companies will risk writing off millions of dollars.

Some companies have also opted to diversify their supply base and reduce dependency on their existing suppliers. Unfortunately, this also presents a significant risk as building a new supplier infrastructure in a different country will take considerable time and money.

How can data analytics and business intelligence play a part in helping organizations understand their needs and make sound data-driven business decisions?

Tan: Whether it is disruption caused by the pandemic, natural disasters or other issues, supply chain executives need to think and act with agility. It is crucial for organizations to have end-to-end visibility across the supply chain to build greater resilience and create more transparency while ensuring accountability across the different functions. This is where Active Intelligence, the idea of creating in-the-moment awareness of the business through real-time information to trigger immediate actions, steps in.

Australian surf retailer, Ocean & Earth, uses live data to compare sales, product, and location performance against KPIs and forecast and monitor stock levels. Using Active Intelligence, Ocean & Earth connects data across its different channels to provide a complete picture of its operations. This boosts customer service by ensuring that it always has sufficient stock in store.

Another example is Multipack LJM, an Australian packaging services provider that strategically scaled its operations according to the fluctuating demand cycle during the pandemic. With the help of Qlik, the decision-making time was reduced from days to minutes, helping the brand take just-in-time decisions to streamline its production processes efficiently.

What should organizations do today to improve their processes for the future?

Tan: It is common for most companies to hold supply and demand reviews weekly or even monthly. With the continued uncertainties that the pandemic is bringing, supply chain executives and planners need to adopt a data strategy of navigating uncertainty. Organizations should employ a strategic use of analytics to extract data in real-time to take fast and decisive actions so supply chain operations don’t get disrupted.

While companies have invested in technologies to improve supply chain visibility, most have neglected supply chain disruption monitoring. For example, if the local government issues a new regulation overnight, potentially disrupting incoming shipment, how are companies equipped to take corrective action to secure inventory quickly to ensure production doesn’t get halted and ultimately affects customer satisfaction?

Companies need to go beyond the dashboard and enable every employee, from back-office to the front-line, to have visibility and access to real-time data, to close the gaps by triggering actions through automation. In doing so, they can foresee supply shortages and help build alternative sourcing and distribution channels.

For maximum impact, more timely insights can then be delivered directly into the hands of decision-makers. Companies with an Active Intelligence-led framework can look to make data-informed decisions to stay ahead of unprecedented disruptions in the present and future.