Table of contents
- Revealing the geographic distribution of units
- Consistency between demand and supply
- Optimized route planning
- Mitigating risk and reducing costs
- Improved communication
- Supply chain statistics to know in 2024
- The research speaks
Supply chains are the backbone of businesses across the globe, ensuring seamless goods flow. Disruption in this flow can have adverse consequences, making optimizing and monitoring supply chain performance imperative.
Table of Contents
Revealing the geographic distribution of units
Visualizing supply chains on a map reveals the geographic distribution of suppliers, warehouses, distribution centers, and customers. This helps identify bottlenecks, redundancies, or underutilized assets.
Consistency between demand and supply
Visualizing customer locations and demand density helps optimize inventory distribution to meet regional needs. For example, spatial data ensures warehouses or distribution centers are strategically located near demand hotspots.
Optimized route planning
Spatial data helps optimize routes by integrating real-time traffic, weather, and road conditions, reducing delivery times and fuel costs. Adverse traffic and weather conditions are a major impediment to supply chains. Visualization tools, such as those integrated into mapping software, enable real-time route adjustments in response to unexpected disruptions like storms or road closures.
Mitigating risk and reducing costs
Mapping risks like adverse weather or infrastructure vulnerabilities allows proactive risk management. Mapping tools can simulate alternative supply routes, helping ensure continuity during disruptions.
Visualizing and analyzing spatial data can reduce empty miles and improve fleet utilization. Warehouses can be stocked based on spatial demand patterns, minimizing overstocking and stockouts.
Improved communication
Spatial visualizations can improve understanding of supply chain dynamics, facilitating strategy alignment between different teams, such as logistics, marketing, and finance.
Supply chain statistics to know in 2024
The supply chain management market was predicted to grow by 98.45% worldwide between 2020 and 2026. AI has valuable potential, reducing prediction errors by 20–50%, overstocking by up to 50%, and sales losses by 65%. The AI supply chain market will reach $20 billion by 2028, corresponding to an average annual increase of 20.5%. Supply chain visibility is limited for 62% of organizations. 15% focus on production, 17% have extended visibility, and only 6% achieve full visibility.
In retail, supply chain management was predicted to increase from $31.11 billion to $58.87 billion between 2023 and 2030, corresponding to an average annual increase of 9.54%.
Dealing with supply chain disruptions
67% of organizations spent more time on supply chain management in 2024, and almost two-thirds were able to optimize the life of existing resources. However, almost half (46%) incurred skyrocketing costs to procure required equipment as soon as possible. About the same percentage leveraged a temporary strategy to meet urgent needs. A third migrated more storage to the cloud than they had planned, and more than a quarter (27%) delayed responses to company requests due to supply chain issues.
The research
Spatial supply network models help visualize and estimate spatial commodity flows using data on company location and employment, material balance-type equations, and an input-output table of inter-industry transactions. Researchers have proposed a general method to visualize supply chains in detail across regions, applying the rule of preferential attachment to network gravity equations. Visualizations for US service, extractive, and manufacturing industries draw attention to differences in urban and rural interdependencies. They could prove very helpful in terms of improving one’s understanding of large-scale supply chains, as well as anticipating and addressing vulnerabilities to different disruptions.
Crowdsourcing to update mapping bases
Governments have yet to adopt crowdsourcing tools due to concerns about integrating potentially unreliable data, but navigation system vendors have embraced them to update their mapping bases. Google Maps calculates vehicle speeds based on GPS-determined sites transmitted from relevant mobile phone users and displays crowdsourced traffic conditions along major itineraries. It is feasible to use GPS vehicle tracking to update maps and correct errors. Further research is needed to enhance the adoption of reverse information flows. This could fall into several categories:
- data harvesting to collect and verify information quickly
- resolving the trust problem
- community engagement strategies to stimulate reverse information flows
- integration of crowdsourced and authoritative data
Supply chain efficiency and effectiveness will improve if stakeholders adopt the backhaul concept. This includes reduced long-term data maintenance costs, improved engagement with end users, and better potential for product innovations.
