SUPPLY CHAIN
McKinsey associate partner Sebastian Reiter believes the Covid-19 pandemic has exposed vulnerabilities “ across the global value chain ” and pushed companies to prioritize risk management and operational resilience , against cyberattacks and other threats to supply chains . He agrees that technology has a critical role to play in this , but also sounds a note of caution , warning that the digital transformation of supply chains itself carries a degree of risk .
“ Companies are increasingly incorporating the Internet of Things into their plants ,” he says . “ This and other equipment , including the use of digital twins , can actually make them more vulnerable to a wide variety of cyberattacks .”
But he agrees that , ultimately , increasingly sophisticated artificial intelligence ( AI ) technologies - such as digital twin supply-chain simulations , advanced analytics-based forecasting and supply-chain network optimisation tools - will help companies “ improve their value-chain resilience-efficiency balance ”. But he stresses that the key is to use such technology “ when and where it matters , in order to mitigate risks and build operational resilience .”
Reiter continued : “ The next generation of end-to-end planning processes is fundamentally different . AI can help balance efficiency and resilience by incorporating uncertainty into realistic simulations of reality to evaluate scenarios and identify risks , and by finding optimal plans for different time horizons . He says AI can “ recommend operational decisions that balance cost with revenue ”, and he agrees that by providing real-time end-toend visibility digital twins help businesses “ better anticipate and react to supplychain disruption .” supplychaindigital . com 49