Technology firms are drowning in information – but what they need are actionable insights for supply chain resilience. Everyone expected the data revolution to transform how companies manage every aspect of their business. Having the right data would put leaders in a position to spot opportunities and challenges early and act accordingly.

Supply chains, in particular, looked set to reap significant advantages. That is critical given ongoing and often escalating supply challenges including geopolitical tensions and conflict, climate change and adverse weather, labour shortages and talent gaps. But it hasn’t worked out like that:

• Maersk’s recent research on supply chain resilience, Course for Change, revealed that, on average, technology companies lost more than 3.6% of annual revenue to supply chain disruption in their most recent fiscal year.
• Our survey of senior supply chain, logistics and operations leaders in the technology sector showed that it’s not a lack of data that’s the problem. Rather, it’s turning that data into actionable insights.
• Around one-third of the technology companies in our research say they lack the skills to do this. This leaves them with ‘blind spots’, slowing decision making and weakening supply chain resilience.

The data insights gap in supply chain resilience

“There is no shortage of data,” says Matteo Pecci, the chief operating officer of small appliances manufacturer De’Longhi. “But there is a shortfall in the ability to process that data and turn it into meaningful indicators that support decision-making across all functions.”

Many technology companies face these challenges. They are missing opportunities to optimise their supply chain flows and are finding it hard to prioritise and coordinate action across business functions and with key partners.

But it doesn’t have to be this way.

Analysis of ‘resilience frontrunners’ in our research – technology businesses that lost less than 1% of revenue to supply chain disruption in the past fiscal year – shows that these companies are better at extracting insight from data.

• Just 6% of the frontrunners lack visibility of lead times for critical components or finished goods, against 25% of the least resilient businesses (the “followers”).
• Just 3% of the frontrunners lack insight into their exposure to geopolitical risk, compared with 18% of their low-resilience counterparts.
• Not a single frontrunner reported issues accessing real-time inventory levels of high-value or time-sensitive products, while 18% of the followers reported low visibility.

Whether from supply chain partners, internal systems, or macroeconomic indicators, the frontrunners excel at extracting useful data.

This puts them in a position to manage supply chain costs. Companies that see upcoming raw material shortages early, for example, can stock up before prices escalate.

Asked which resources or capabilities that they currently lack would most help balance supply chain agility with long-term stability, technology firms most frequently mentioned real-time risk visibility and actionable insights.

Technology sector supply chains: from overload to action

So, how should companies tackle the data deluge?

1. Getting more from the data you already have

One priority, suggests De’Longhi’s Pecci, should be to extract better quality insights from the data already available. “We’re now working on tools that summarise data so that it’s more usable for decision-making,” he says of his company’s approach.

Scenario-based financial planning tools, for example, can help companies move from a focus on theoretical data points to real-life objectives. However, less than half of technology businesses use them to improve financial supply chain resilience.

2. Turning signals into rapid decisions

Companies should also seek to accelerate the conversion of data into insight. Global electronics manufacturing services company Jabil has built its own platform capable of assessing the impact of a huge range of external risk signals on key suppliers and components.

Frank McKay, Chief Supply Chain and Procurement Officer at Jabil, explains “We scrape the web for information and subscribe to a range of data sources, which we then combine with our practitioners’ own expertise to help us to make more informed decisions quickly.”

This puts Jabil in a position to react at speed to even the most unexpected events, such as the recent earthquake in South-east Aisa. “Within seconds, we were able to start working on contingency plans and to identify where we might need to use alternative suppliers,” he says.

3. Setting up control towers

At Schneider Electric, rolling out “an ecosystem of digital twins” and setting up control towers has been crucial to collecting, processing and analysing data from 153 factories and 27,000 suppliers. “Your technology stack and data infrastructure are fundamental,” says Stuart Whiting, Senior Vice-President, Global Supply Chain – Logistics, Planning and Services. “We can intervene or manipulate proactively wherever there is a challenge in any particular touchpoint right up to that point of delivery.”

4. Building the talent

To get the best out of data, technology and infrastructure, companies need the right talent. Our survey shows that almost four in 10 technology companies have an urgent need to add data analytics and interpretation skills to their supply chain teams over the next two years . “You've got to make sure you've got the right competencies to really take advantage of what technology and data bring,” says Whiting.

5. LSPs as insight partners

Logistics services providers (LSPs) have a crucial role to play in helping technology companies extract insight from their data. Tools and services such as Maersk’s Supply Chain Management (SCM) and Supply Chain Resilience Model support supply chain visibility and agility. Maersk’s SCM model can also foresee disruption and recommend actions to ensure logistics remain uninterrupted.

Many technology companies are already incorporating LSPs into their data ecosystems, although the frontrunners are more likely by a margin of 13% over the followers to do this . Nevertheless, many followers indicate they are keen to collaborate in the future.

Schneider Electric is among the technology companies leading in that respect. “We've been quite strategic with our logistics partners,” says Stuart Whiting. “Even though we've got multiple LSPs, we co-host in our control towers to allow us to ensure end-to-end solutions and execution.”

What to do next for supply chain resilience

To improve data use, companies should focus on four priorities:

• Improve data architecture – break down silos, consolidate systems and integrate all internal and external feeds.
• Acquire smarter tools – invest in functionality such as digital twins, AI and predictive analytics, with a focus on solutions that support decision-making at speed.
• Build up skillsets – strengthen competencies around data analysis and interpretation, so that teams are confident in their ability to act quickly.
• Reinforce partnerships – use relationships with suppliers and LSPs to increase access to data and insight; integrate partners into planning and control frameworks to underpin collective decision making and joint action.

The aim is to transition from data overload to data advantage. Insight is the currency of resilience, and leading companies in the technology sector are no longer daunted by disruption. Rather, they understand how to interpret it and, above all, how to act decisively to contain it, getting much closer to supply chain resilience.

Be ready for intelligent supply chain resilience to go all the way! Explore the full Course for Change report and learn more about Maersk Supply Chain Resilience Model, or for more logistics trends and insights, read and download The Logistics Trend Map.

About FT Longitude

FT Longitude is a specialist thought leadership agency, owned by the Financial Times, working with a wide range of the world’s most prestigious B2B brands across Europe, the US and Asia-Pacific. FT Longitude’s 80+ clients are concentrated in the professional services, financial services, and technology sectors, but also stretch into energy, infrastructure, manufacturing and other industries. Headquartered in London, the company was founded in 2011 and was selected as one of Chief Marketer 200, Top Marketing Agencies of 2020, an Inc. 5000 Europe in 2018, an FT 1000 company in 2017, and a 2016 Leap 100 high growth UK company by City A.M. and Mishcon de Reya. It is led by founders Rob Mitchell (CEO), James Watson (COO) and Gareth Lofthouse (Chief Revenue Officer). For more information: visit longitude.ft.com.