The Supply-Chain Innovation Rush

The Supply-Chain Innovation Rush

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Part 1

Cisco makes light of supply-chain; Google delivers a Digital Twin; Amazon weathers the storm – it’s time to innovate and thrive

As supply-chain disruptions roil industries across the world, tech start-ups offering solutions in this space have raked in US$7.7 billion in venture funding in Q1, an increase of 90.6% over last quarter and a staggering 355.1% year-over-year, as the sector continues to respond to the glaring gaps exposed and exacerbated by the pandemic, according to latest research from analysts. Companies are in a rush to leverage artificial intelligence (AI) to ride out this crisis, and create long-term supply-chain resilience. Organizations like Cisco had already rejigged their supply-chain strategies, and are now raking in the profits.

Of course, the transformation of logistics and digital supply-chains began well before the onset of COVID-19, but the pandemic has accelerated this evolution. The continuing shift to online retail, combined with sky-high freight rates, and consumer demand for faster, more reliable delivery times, has placed extraordinary pressure on businesses and their supply-chains. One of the most effective ways for businesses to compete in this new environment, is with full, digital visibility of their supply-chains and logistics operations.

Supply-chains need end-to-end visibility

Cloud and no/low-code platforms are playing an important role in supply-chain transformation. Beacon, a UK-based digital supply-chain and freight platform maker, which raised US$50 million in a series B funding round, has a software designed to optimize digital supply-chains with insights and visibility. Its cloud-based platform offers a freight forwarding service across all modes integrated with its end-to-end visibility platform, connecting each stage of the supply-chain to deliver a record of all the information teams need. The platform connects bookings to order management, live tracking, and document management.

Cambridge, Massachusetts-based Quickbase, offers a no- and low-code platform designed to help companies connect and automate systems, processes, and workloads. Its platform is about empowering experts at the edge of the business that understand where the existing software gaps and problems are.

Quickbase lets customers visually orchestrate workflows across apps and third-party tools using simple business logic, prebuilt integrations, and API-powered extensions. Leveraging the platform, employees can tweak a business app, transform data, or change the schema without having to take an app offline. Moreover, app builders and administrators have full control over who sees what information is stored in Quickbase – as well as over the duration for which that information is retained.

Cisco making light of supply-chain challenges

Cisco is an interesting case study in developing an innovative resilient supply-chain strategy. Its products and parts circle the globe at a dizzying pace. Cisco is making it more sustainable and equitable. The company has been combining innovation and leadership to reimagine how materials, parts, and products are sourced, moved, and assembled around the world – along with how workers are treated along the way.

The company is using its ESG (environmental-social-governance) charter to create products that are energy efficient, smaller, lighter, therefore occupies less space, and easier to ship across the world. Recent advances like the Silicon One chip – which enables Cisco’s new 8201 router to gain 35% more bandwidth, with 26x less power draw, in a smaller, lighter, and lower-cost package – are paving the way for a more transformative internet of the future.

Cisco reported results for its fiscal Q4 2021 (the three months ending July 31, 2021).Revenue of US$13.1 billion was up 8% year on year, with net income of US$3 billion up 14%. By segment, Infrastructure Platforms revenue from its switches and routers increased 13% to US$7.5 billion, while Applications revenue fell 1% to US$1.3 billion. Security revenue rose 1% to US$823 million. Including US$4 million from other products, total product revenue grew 10% to US$9.6 billion. Services revenue was up 3% to US$3.4 billion.

The company as set clear goals for improving supply-chains. By 2025, for example, 80% of Cisco’s component, manufacturing, and logistics suppliers by spend will have public absolute greenhouse gas emissions reduction targets. And the company plans a 30% absolute reduction in supply-chain Scope 3 greenhouse gas emissions by 2030. Scope 3 emissions are the result of activities from assets not owned or controlled by the reporting organization, but that the organization indirectly impacts in its value chain. With better tracking, communications, networking, and security technologies, supply-chains become that much more seamless and transparent. At the same time, products are getting smaller, lighter, and more energy efficient, while generating less packaging and waste.

Our next episode will look at how a new generation of AI-powered simulations – called “digital twins” – are turning the game around.

(To be continued)

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