If you’re shelling out more than usual on your gas and electric bills at the moment, you’re not alone. Energy prices are expected to rise globally by more than 50% in 2022, according to the World Bank. There are multiple factors at play, mainly the war in Ukraine, which is forcing countries to find new sources as they turn their backs on Russia, and shortages of raw materials as more energy providers look to invest in renewables.
Supply chain shortages are still disrupting the global steel market, which is having a direct impact on the oil and gas market because new wells require steel pipes and casing. Additionally, transporting goods that support production is proving difficult and causing subsequent delays. “Workforce shortages and fuel prices are driving up the transportation cost of all goods, adding yet another layer of inflationary pressure… The trucking industry is itself struggling to get parts to make necessary repairs, causing fleets to be out-of-service for extended periods of time,” Energy In Depth reported.
There are significant risks in the renewables sector as well, as highlighted by Freshfields as the rising demand for parts and equipment has made it difficult to achieve full-scale operations, which can result in “unexpected insolvencies and difficulties accessing alternative suppliers”. Then there are ESG issues. Although renewables have a positive impact on the environment once they are up and running, they rely on raw materials to and the availability of new land when they’re being established, which brings multiple environmental factors into consideration.
All these various supply chain disruptions are hindering energy suppliers as many of them are not agile enough to respond to the change, or don’t have the capacity to scale up production in response to the rising demand.
In the face of these issues, organizations now need a lot more elasticity in supply chains. The first place many organizations are looking to become more agile is in the procurement of goods and services. That means adding new suppliers to reduce single source dependencies and increasing the data and intelligence in your demand planning through automated decision making. To do this you need fast and effective processes for vendor selection, supplier onboarding, and ongoing management.
Low-code automation enables you to design agile business rules and establish automated approval workflows so you can onboard new suppliers more quickly. So, if you find that you’re let down by your usual supplier due to shortages, it’s easy to select and onboard a new vendor. However, this process is rife with approvals as part of due diligence, and when these are shared over email, it can be easy to lose track of the chain, wasting valuable time. Establishing an automated workflow that sends approvals to the necessary people to ensure they are made promptly and limits supply chain disruption.
Global energy company, EDP, set up an autonomous workflow automation process across the business to help with decision making and business approvals. This helped the company to adapt faster to changes in the market and make better decisions based on the process data. Now over 2000 employees use these applications and new processes are launched 2x faster than before.
In responding to recent disruption, organizations have been forced to make decisions that have damaged the profitability of their business because they were not prepared with alternate suppliers and agile systems.
A core concept of agile modeling is single-source information. Hosting information on a centralized platform, rather than data that’s entered in multiple systems, helps to drive business efficiency. Yet many supply chains rely on an array of disconnected technologies. This creates a lack of visibility and performance data in supply chain operations. It can also be hard to use this disparate data to make business decisions. Intelligent technologies like Machine Learning can help you to predict any future disruptions, but only so long as your data is properly stored and managed.
In addition, companies often rely on legacy ERP systems that are simply too slow and costly to change. At best these systems are optimized for efficiency rather than agility – and at worst they are not meeting either goal. In responding to recent disruption, organizations have been forced to make decisions that have damaged the profitability of their business because they were not prepared with alternate suppliers and agile systems.
Low-code automation enables you to orchestrate all your systems by integrating systems and applications and coordinating tasks. This gives your organization an agile advantage that allows you to respond to supply chain disruptions. You can make amends within your business rules and instantly apply them throughout the business.
Connectivity and automation bring the efficiency and agility that so many supply chain operators crave. If you would like to find out more about how a low-code platform can help transform your supply chain, download our free ebook, The Strategic Guide to Supply Chain Automation. In addition to insight on how to optimize your supply chain, you will also learn:
• 3 steps to building more resilient operations • Best practices to tackle the key issues faced by energy and utility providers • How Bizagi's low-code automation platform has helped leading organizations transform their supply chains
