SAP’s Richard Howells and SAP Fieldglass’ Arun Srinivasan elaborate on the importance of IoT coupled with skilled contingent labor for companies to safely maximize their resources during the 2020 holiday season.
The holiday season will look a lot different this year as COVID-19 continues to affect manufacturers and supply chains worldwide. Up and down the supply chain, organizations are looking to minimize human contact and maximize the use of intelligent technologies to ensure that customers are satisfied, operations are streamlined, and employees are safe, especially as the peak season progresses, and COVID numbers appear to increase.
If we have learned anything from 2020, it is that resiliency and agility are essential in our efforts to respond to volatile demand, unstable supply, and constrained capacity. Connected technologies can allow for smarter manufacturing, logistics, and distribution. At the same time, onboarding skilled contingent labor helps companies to counter disruption with flexibility in response to fluctuating demand.Â
Let’s look at each capability in detail, as well as the trends that got us here.Â
The Socially Distant Supply ChainÂ
COVID-19 has been a catalyst for the adoption of digital transformation, and agile organizations are leveraging technologies like the internet of things (IoT) to evolve their business models to preserve their customers and focus on supporting them through economic uncertainty.Â
Industry 4.0-enabling technologies such as connected sensors and the resulting intelligent assets and products have provided an opportunity for companies to diversify revenue channels, minimize the economic detriment of the pandemic and help optimize, innovate and deliver new services.Â
According to GartnerOpens a new window , at least 50% of enterprise applications in production will be IoT-enabled by 2024. Smart technologies are on the rise, helping many manufacturers to reopen or continue to stay open.
The Connected WorkforceÂ
Intelligent technologies alone are seldom sufficient. At a time of profound disruption, businesses need a highly-skilled, tech-savvy workforce. According to a recent survey Opens a new window of 1,000 top-performing companies by SAP and Oxford Economics, almost all supply chain leaders (92%) say their employees are prepared for digital innovation; and they are constantly refreshing their employees’ skill sets as the technology landscape evolves.Â
With IoT technologies driving intelligent products and assets, machines and business processes are now both augmenting and enhancing employee productivity and, in some cases, interacting without human intervention. At the same time, people remain an organization’s most valuable resource â€” and they always will be.Â
Giving them the tools they need to perform their jobs safely and effectively is crucial. The key is to provide them with the data to make rapid yet informed decisions to manage unforeseen events in real-time. Connected devices, for example, guide operators with working instructions in virtual reality or 3D overlays and warn employees when environmental conditions become unsafe to work.
As the degree of automation increases, so does the complexity of the decisions that workers need to make. If components are not available at the expected level of quality, for instance, the production sequence must adapt without imperiling critical customer orders. The same is true for an unplanned machine breakdown. An organization’s people require detailed information to act decisively and preserve customer value.Â
The Rise in Contingent Labor
Looking back at the 2008 Great Recession, we saw an increase in freelance and contract work as companies hesitated to hire full-time employees during long-term economic volatility. A 2019 studyOpens a new window conducted by SAP Fieldglass and Oxford Economics found that the external workforce comprises roughly 42% of the total workforce spend. This reliance only increases during the pandemic, as agility is key to keeping pace with rapidly shifting market conditions and skilled talent increasingly open themselves to contract work.Â
The pandemic has sparked a shift to more regional and localized supply chains. As this trend continues, we’ll likely see greater engagement with external workers in the manufacturing and supply chain. Managing these workers effectively involves compliance with local and regional guidelines.Â
A vendor management system needs to be sufficiently nimble, for example, to keep pace with local office closures, reopenings, and changes in maximum occupancy limits or social distancing requirements. At the same time, the supply chain for talent runs parallel to that for direct and indirect goods. The data underlying each informs the other, so transparency across both supply chains is essential.
Flexibility is always important, and it stands to become even more so this year as companies grapple with the challenges associated with COVID-19. It will take cloud-based technologies and contingent workers and services providers working in tandem for the season to proceed as smoothly as possible. While the coronavirus is the furthest thing from anyone’s wish list for the holidays, it has ultimately spurred change for many businesses that should position them to come out stronger on the other side of the pandemic.