Digital transformation has championed numerous unprecedented changes in supply chain management. With the enormous opportunities abound, customers, suppliers & other critical stakeholders in the supply chain space can communicate effectively and seamlessly – defying the bottlenecks between the traditional and the digital worlds and obliterating ancient organizational boundaries.
The supply chain has taken massive advantage of today’s digitized world. Benefits of these transformative digital technologies include eliminating inefficiencies, reducing costs and boosting flexibility; all of which are highly critical to increasing your resale value. One of the objectives of the supply chain is the effective and efficient management of risks across the chains of its process. Beyond that, supply chain management is also highly instrumental to providing a competitive edge. All aspects of the supply chain network are increasingly dependent on business intelligence and elevated collective benefit.
Modern digital transformation is being driven by the collaboration of various technological solutions. There is so much behind the overarching and unprecedented revolution: from big data and analytics to innovative machines, machine-humans connectivity, automation technology, artificial intelligence (AI) and augmented reality (AR).
All over the world, organizations are increasing their focus on mitigating the risks associated with their day-to-day business processes and increasing resiliency. While digital transformation has attracted many businesses today, it is sufficient to say that global pandemics have created operational crises and contributed to these disruptions. Indeed, the increased capitalization on digital technologies across all aspects of the value chain is expected to help several companies easily identify potential risks. That said, they will also be more proactive in responding to those unwanted disruptions.
Are you ready to forge ahead of the journey of harnessing the opportunities of digital transformation for your supply chain? Let’s briefly examine six key ways digital transformation in supply chain is boosting supply chain management:
Connected Supply Chain
The supply chain industry has witnessed increased connectivity with the help of digital transformation technologies and tools. At this current period in the industry, smart logistics such as cargo tracking, remote fleet management and automated warehouse are bringing about revolutionary changes. Tools like the cloud-based GPS and low-cost Bluetooth low energy sensors simplify the process of tracking your assets and detecting real-time location updates quickly and efficiently, including when freight is shipped or delivered.
In addition to the benefits of the cloud-based GPS, you can also gain real-time insight into your transportation system’s performance and the inefficiencies associated with the delivery routes. Without any doubt, automation and business intelligence tools and technologies have increased adaptability and supply chain management to meet various clients’ ever-changing demands. The sensors connected to these asset tracking devices make detecting disruptive agents in your supply chain network easy and hassle-free.
Demand-Driven Supply Chain Management
Demand-driven supply chain management is not alien to the industry because a wide array of supportive data is available. The capacity to evaluate that data and translate it is not a difficult task either. The ancient or traditional demand forecasting methods are often cemented based on demand levels. However, those data points may not accurately reflect the demand curve’s current state. Therefore, digital transformation has introduced sensor-based systems, which could seamlessly help monitor, gather, collect and report data while also responding to remote commands.
The accuracy of demand planning, forecasting and replenishment is hugely simplified with improved data analysis. The science and techniques like predictive analytics and machine learning, with their level of imperfection, can also account for these different characteristics. The result is a reliably anticipated demand, reordering and restocking system.
Formation of the Digital Thread
When data and information are evenly distributed to all consumers, whether upstream or downstream to establish a constant feedback loop, it is known as the digital thread. Apart from connecting data and systems, the digital thread functions efficiently by integrating people and workflows. With improved communication between data, the entire products in the supply chain become even more responsive, specifically concerning manufacturing, design, reworking and after-sales service provisions.
The aftermath of digital thread across the critical participants in the supply chain, such as your company, suppliers and customers, will make a significant difference as it brings about an integrated value chain. Ultimately, this results in increased collaboration between suppliers, your organization and your customers, increased efficiency, reduced costs and excellent supplier performance and customers behavior.
Co-Creation of Values
With digital transformation, the supply chain industry is built on a new degree of information exchange and transparency. From the inventory levels to the supply statuses, delivery inefficiencies and future-focused demand shifts, digital transformation has heralded a new era of enhancing bidirectional communication and inter-organizational insight into everything just with the tap of a button.
Best practices are now being shared between internal and external stakeholders to promote efficiency, effectiveness and interoperability. For end-to-end visibility to be adequate, an enhanced system must be in place to facilitate access to data across business networks. It is based on the premise that combining data from all supply chain networks is better than leveraging data from a single source. Ultimately, this prepares you for a synergistic co-creation of data, where opportunities and savings are distributed across business partner organizations, resulting in a win-win relationship.
Evolving Customer Expectations
Since the beginning of the pandemic, consumers’ shopping habits have rapidly changed, and many companies have been redefining their distribution models. Customers now have little or zero tolerance levels for delayed or inaccurate orders. Manufacturing, distribution and logistics, including warehousing, must be executed with accuracy, speed and agility to meet today’s demands. It results in the movement of several organizations from their direct stories to centralized distribution centers using real-time inventory management software. It reduces the dependence of order points on warehouse inventory levels and increases responsiveness to demands.
During the peak of the global pandemic, there was a rapid change in the shopping patterns of most consumers. It forced several companies to adopt the culture of building their e-commerce capabilities, taking a cue from retailers. Some B2B model companies decided to shift their selling patterns to a DTC (direct to consumer) model while also leveraging retailers’ strategies for improving their customer service capabilities in the digital space.
These include creating e-commerce stores and digital order forms, providing remote communication with customers. The opportunities brought by virtual and augmented reality offer seamless simulations of facility tours while showcasing new products or service offerings.
While we cannot deny that technological advancements have significantly advanced in recent times, the industry remains open to more opportunities and threats in the future. One of the effects of digital transformation is the breakdown of traditional barriers to collaboration and innovation, resulting in a significant increase in the potential bad actors breaking in.
To gain access to their ultimate targets, third-party vulnerabilities are becoming increasingly available for sophisticated attackers. Whenever there is a security loophole in any organization, it presents a massive opportunity for hackers to gain access. On the other hand, companies also serve as entry points for hackers to pose their threats to supply chain partners and customers, especially if the victim organization has porous security systems. All providers should understand the potential risk of cyberattacks.
Organizations and other partners should implement contractual cybersecurity provisions and standards to proffer practical solutions to these highlighted cyber risks. Apart from that, appropriate measures should also be in place to balance their relationships’ levels of risks and values.
Withum’s ERP Implementation Services: Integrating Digital Technologies with Your Supply Chain Network
Eliminating the bottlenecks and roadblocks in the supply chain with digital transformation can be challenging. At Withum, we offer businesses and organizations in the supply chain industry the confidence they need to make the best planning decisions to optimize their performance in today’s digital world.
Trusted by top supply chain brands, Withum has solved complex supply chain-related problems with our ERP implementation services. Our methodology is designed to effectively and efficiently help you monitor and manage risks and opportunities effectively, blending machine learning and artificial intelligence, which will help you make informed business decisions.
Book a meeting with us to learn how we can work together so you can realize higher revenues, lower costs and reduced risks.