As in many industries, the events of the past year have served as a watershed moment for firms in the commodities space, especially as they relate to the global supply chain. Last year, a report by McKinsey & Company found that 73 per cent of supply chain executives encountered problems with suppliers, 75 per cent struggled with production and distribution, and nearly half experienced delays in planning and decision making.
Just recently, the Wall Street Journal reported on massive supply chain disruptions stemming from the historic winter storm in Texas. Perhaps even more stunning was the Ever Given container ship becoming lodged in the Suez Canal for a full week, blocking passage through one of the world’s most important waterways. In both cases, recovery could take months, with broken contracts and pricing issues adding layers of complexity. These events underscore the fact that, even as we recover from the pandemic, the global supply chain will be rife with risk and uncertainty, meaning continuity and resiliency must be top priorities.
Historically, commodity market participants have taken numerous steps to mitigate this risk: diversifying portfolios, participating in exchanges, structuring contracts to hedge against loss. But these steps, while crucial, are just the beginning of a truly modern optimisation and risk management strategy. Risk lies not only in asset allocation, but in the myriad logistical processes that support global industry.
Organisations seeking to master this volatility must be able to scrutinise every step of the supply chain. They face a number of obstacles in doing so:
- Global complexity – raw materials often cross multiple international borders along the supply chain, inviting inefficiencies in terms of trade, compliance, consumer demand and weather
- Multiple systems for handling origination, handling and processing – most organisations rely on disparate and disconnected systems, hampering their ability to take a comprehensive view of the supply chain
- Little support for complex business processes – raw materials still move from production to storage to transport with little insight. Market behaviours and price fluctuations are often invisible, data capture is prone to errors and audit trails are nonexistent
- Multiple parties, too little communication – keeping suppliers and producers connected across multiple touchpoints is difficult, especially in remote locations where digital infrastructure is spotty and collaboration occurs mostly via smartphones
At Eka, we help our clients solve these problems through digital transformation. Our integrated tools and technologies help companies plan and execute the movement of goods across the trading value chain with more insight. Commodity producers can manage capacity, shipping and storage with greater flexibility, while other entities on the supply chain can automate process decisions, improve use of assets and gain real-time visibility into material movement, inventory and quality, whether in agriculture, energy, minerals or mining.
How do we enable this? Our offerings are too numerous to list here, but we can share a few of the most exciting innovations that are driving digital transformation in this space.
For example, stockyard operators need the ability to view the contents of their stockpiles and assess where space could be better used, but are hampered by their current systems – you can’t employ a two-dimensional solution for a three-dimensional world. Eka is pioneering 3D modelling for stockyard management, enabling operators to see all their assets in a graphic representation. This can serve as a crucial addition to a supply chain control tower, usually defined as an integrated, personalised dashboard of data, insights and relevant events across the supply chain. This level of precision means machines can work in greater proximity, as opposed to adhering to one-size-fits-all standard collision requirements.
We also strive to quantify aspects of the supply chain in new ways, helping stakeholders optimise operations and uncover opportunities. One of our new research and development initiatives is combining 3D modeling with machine learning to answer new questions about stockpile management. How many stockpiles are optimal for any given stockyard or bulk terminal? What elements are best combined to deliver more value to a customer? Organisations that identify answers to these questions are the ones who will thrive as this space continues to modernize.
Individually, each one of our offerings has the potential to transform how raw materials move along the supply chain, but their greatest value may lie in their ability to work together. While we offer more than 50 apps for a huge range of functions, Eka’s extensible cloud platform delivers a single user interface and a single enterprise-grade security model.
This enables the seamless integration of data across the front, middle and back office, meaning firms can take a complete view of their operations through all-encompassing analytics. Productivity is maximised through built-in schedulers and a workflow engine, while the platform’s modular architecture unlocks rapid application development for expanding functionality. These capabilities are supported by Eka’s deep commodities experience, which enables us to deliver a best-in-breed solution that contrasts sharply with generalised procurement or enterprise resource planning suites. This combination of efficiency and insight leads to results far beyond what is possible with a siloed legacy system.
While the pandemic won’t last forever, there are a host of other factors – climate change, new technologies, geopolitical complexities – that will create supply chain disruptions for as long as materials are moving around the globe. Digital transformation is the solution, and we look forward to helping organisations throughout this journey.
by Manav Garg, CEO and founder, Eka Software Solutions