IS TECHNOLOGY THE SAVIOR OF SUPPLY CHAINS?

Supply chains have undergone immense pressure over recent years. According to a report by DHL, disruptions have surged by 183% since 2019, driven by challenges such as global health crises, geopolitical conflicts, and extreme weather. Constant shifts and volatility have made resilience a top priority for businesses. 

This raises an important question: can technology make supply chains more resilient? To explore this, we spoke with Andreas Anyuru, Chief Technology Officer at Consafe Logistics. 

Andreas Anyuru

Supply Chain Resilience and the Role of Technology 

As the virus is still among us and lockdowns are being used to battle this threat, the economy as well as the buying behavior have accelerated the digitalization. McKinsey has reported extensively on the increase of the online shopping intent and change in shopping behavior. This is not going unnoticed and companies are adapting quickly to these insights. According to the Gartner Board of Directors Survey 69% of boards of directors accelerated their digital business initiatives due to the pandemic and 67% expect a budgetary increase in technology.

As economies reshape, the demand and supply of goods will require a more safe and intelligent approach. There are several approaches for supply chain to become more intelligent and resilient with the use of technology.

1 | Digital Twin Technology 

A digital twin is basically exactly what it sounds like. It is a virtual copy of a process, product, or service, bridging the physical and digital worlds. NASA was one of the first to use digital twin technology, developing ways to test, operate, and maintain systems remotely. This is precisely one of the main advantages, shifting the execution to remote working. 

In a supply chain setting, a digital twin can be used for visualization, simulation, and emulation throughout the entire life cycle. An example of use is for the design of the warehouse and simulation of the warehouse operation. The digital twin lets you test new flows as well as warehouse automation remotely and without altering the existing sites. 

According to research done by McKinsey, leading companies recognize the strategic value of digital twins, ranking it among their top three investments to address supply chain disruptions. 

2 | Artificial Intelligence 

AI is increasingly viewed as a cornerstone for building resilient supply chains. Gartner notes that AI technologies can transform supply chains into adaptive systems that thrive under uncertainty. A lot of potential, but where to start? 

One practical application involves using genetic algorithms—an approach inspired by Charles Darwin’s theory of evolution—to optimize packaging solutions. By identifying the optimal configurations, businesses can ship less air, reduce transportation costs and emissions, and improve cost efficiency. The Swedish postal service PostNord estimates that up to 30% of the space in standard truckloads is wasted, highlighting the significant savings AI can unlock. 

3 | Sophisticated Automation 

With ongoing labor shortages and a growing focus on e-commerce, more companies are adopting sophisticated warehouse automation. These can range from complex decision-making logic to managing material flows. 
 
In highly automated warehouses, it is mostly a mixture of equipment that is used to optimize order fulfillment. These could be AS/RS (Automated Storage & Retrieval System), conveyors, automatic sorters, AGVs (Automated Guided Vehicles), robotic picking systems, and automatic palletizers. However, a significant financial investment is required to implement these solutions, which should be aligned with the long-term business strategy. 
 
A quicker win could be implementing complex decision-making logic, often referred to as the ‘brain’ of warehouse operations." This could increase picking speed by optimizing the actual route the pickers take through the warehouse. Finding the optimal route through a warehouse is an example of the “traveling salesman problem,” where an AI algorithm is used to calculate the shortest possible route for each pick round instead of using a traditional aisle pick route. 
 
 

To return to the initial question: will technology be the savior of supply chains? Can it enhance their resilience? I firmly believe it has a critical role to play. Time and again, history has shown that innovation rises to meet challenges, and I’m confident the supply chain is no exception. 

Sources 

DHL, Supply Chain Diversification Report 
Procurement Magazine, “Global Supply Chain Top 25 Unveiled by Gartner” 
World Economic Forum, Future of Jobs Report 2023  
Ehandel, “PostNord ska leda kampen mot paketluft: Vi har ett ansvar” 
McKinsey & Company, “What is digital-twin technology?”