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Supply Chain Digitization

What’s Ahead for Digitalization in 2023?

Jan. 2, 2023
Supply chain, sustainability and workforce challenges present uncertainty and opportunity

Industry faces a year of uncertainty and potential in 2023 that can be encapsulated in three major trends: supply chain disruption, sustainability and workforce turnover. Each of these challenges is connected, and each offers an opportunity for innovation and transformation, especially considering advancements in digital technologies. Digitalization offers a foundation for companies to embrace exciting technologies: additive manufacturing, artificial intelligence and machine learning (AI/ML), augmented and virtual reality (AR/VR) and the industrial metaverse.

Each of these technologies has benefits and capabilities that can help companies solve the challenges that supply chain disruption, sustainability and a changing workforce bring in 2023.

1. Disruptions cause supply chain uncertainty

Despite the growing complexity and breadth of supply chains around the world, many companies continue to rely on relatively simple means of tracking and managing their supply chain processes. The difficulties of recent years have illustrated the limitations of this approach. Instead. The digital twin can be used to model supply chains and business processes, helping companies better understand the complexities of their value chains, identify problems and prescribe solutions. With the significant amounts of data available from across a company’s supply chain, digitalization is necessary to gain such a perspective.

One of the key deficiencies of today’s most common solutions for supply chain management is an inability to provide context or situational awareness across an entire supply chain. A comprehensive supply chain digital twin hosted in the industrial metaverse, which leverages existing technologies including AR/VR, can be used to create intuitive visualizations that are easier to digest than numbers in a table or points on a chart. The industrial metaverse enables companies to harness the power of large-scale computing and in-depth visualizations to analyze and interrogate the digital twin, providing a higher level of situational awareness on a global scale—again,  dependent on the availability of huge amounts of data.

Additionally, the integration of AI/ML into the industrial metaverse platform can further enhance the value extracted from the digital twin. AI/ML is already excellent at sorting and classifying large data sets to help uncover the most useful information. When applied to supply chain management, this capability can help quickly sort and organize the massive amounts of data that a modern global supply chain generates, making it easier to focus on the most important trends and patterns. Also, the more an AI/ML system is used, the better it gets at recognizing patterns and even predicting future supply issues before they occur.

2. Technology enables new sustainability solutions

The year 2023 will also be important for the pursuit of sustainable industries, which will in turn help companies become more efficient and competitive and better-prepared. Advanced digitalization technologies can facilitate the analysis and characterization of current practices and improve a company’s ability to develop sustainable solutions. In many ways, the challenge of becoming a more sustainable business is closely tied with constructing and managing a global supply chain (figure 2).  As a result, sustainability programs can also benefit greatly from the power of AI and ML. For example, an AI/ML engine can help automate the aggregation of all the information a company needs to generate collective intelligence without over-taxing employees with tedious information retrieval. This collective intelligence will then help a company make objective assessments about their sustainability performance and create solutions to address deficiencies.

Additive manufacturing is another important tool in the pursuit of sustainability. Casting and machining are common processes that produce waste as a matter of course. Switching to additive processes can greatly reduce the material cost of parts by eliminating the need for molds and the waste material produced in the subtractive machining process. Additive is also exciting because of the relative lack of design constraints it imposes compared to other manufacturing processes. As a result, designers can create components that are more efficient in several ways, including material usage, thermal performance and strength-to-weight ratio, helping companies reduce energy consumption and use fewer resources.

3. Digital solutions aid workforce development

Finally, many companies will be managing a transition in their workforce, with recent trends in employment continuing in 2023.  First, the most experienced employees at many companies are reaching retirement, taking with them valuable knowledge and experience that, unless captured, will be lost.

Second, there is a shift in demand toward employees with skills in advanced software and electronics, driven by the changing nature of products. This is creating a skills gap in many industries.

The third major workforce trend is the changing expectations and needs of prospective employees. The next generation of employees are seeking a technologically advanced workplace that matches the technology experiences in their personal lives. Additionally, the most desirable employers are those with strong records of sustainability and corporate responsibility.

Addressing this dynamic workforce market will require a nuanced approach. Simply investing in the digitalization of processes without intention or strategy risks leaving employees behind. It will be important for companies to strike a balance between modernizing for the sake of attracting new talent and not alienating current employees. Technology that is intuitive and easy to learn will help both new and current employees come up to speed more quickly.

In other roles, an immersive training environment may be more valuable. Technicians and manufacturing employees can benefit from hands-on, virtual training sessions conducted in the metaverse that offer a learning environment where mistakes are far less costly (figure 3). The industrial metaverse also will change the way companies work by creating a virtual space to work on real-world projects that are more collaborative, interactive, and immersive.

Some of the uncertainty of 2022 will persist in 2023 – supply chain disruptions, a continued push for sustainable innovation and a changing workforce. Yet, on the optimistic side, digital technologies will help companies foster collaboration, gather and leverage data and explore innovative solutions while saving time and money. 

Dale Tutt is vice president of global industries, Siemens Digital Industries Software.

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