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Lack of technology usage magnifies current supply chain issues: Maersk

Vincent Clerc, AP Moller-Maersk speaking at TPM21
The lack of use of technology has magnified current problems being experienced in the supply chain says Vincent Clerc, ceo of ocean and logistics for AP Moller-Maersk.

Speaking at TPM21 Clerc said that global supply had never been tested in the way it has in the last year and that this test is still ongoing.

“The need to reconsider what a strong and robust supply chain looks like has only been reinforced by the 2020 experience,” he said.

The containerised shipping supply chain is currently struggling with a huge surge in demand in the second half of last year, port congestion on the US west coast leading to lengthy delays, and shortages of containers at key export locations in Asia.

“We as an industry are experiencing challenges with the lack of equipment, surging demand and strained gateways. It is a situation that is first and foremost caused by external factors but magnified by the lack of use of technology,” Clerc said.

“While do everything in our power to repair the situation it will take time to reach a tipping point where we have sustainable solutions that are not simply fighting fires.”

As a result of current issues digitalisation is expected to play an increasing role in the supply chain in the future.

“When it comes to digitalisation we have been struggling for a long time with the fragmentation of data, low visibility and low level of collaboration between partners because our industry is behind the curve of digitalisation,” Clerc said. “The consequences of being behind were costly as we dealt with these sharp shifts in demand.”

In the space of a year the supply chain shifted from cancelled orders and delayed shipments to a rapid ramp up in production to meet consumer demand.

“Coping with these sharp changes and their impact on supply and the need for visibility from PO to shipment to distribution more acute. It made the need for collaboration across the supply for more innovative solutions more acute. It has rendered the need for accountability of the final outcome more acute.”

The result is companies worldwide fast-tracking technologies to simplify and give them greater control over their supply chains.

“The combination of big data applications and AI algorithms makes all aspects of the supply chain, such as demand forecasting, inventory allocation, and operations scheduling, more accurate, efficient and perceptive to change,” Clerc said.

The lack of common platforms to share data in the industry was also highlighted.

“The need for more standard and granular access to data across providers and suppliers has become an imperative, as has the need for a common platform for collaboration across the supply chain eco-system.