Like many other disciplines across many industries, the age of digitalisation, often called “Industry 4.0”, has been incredibly disruptive for the supply chain sector. However, according to Gartner’s report, almost 50% of organisations don’t have a clear roadmap for supply chain digital transformation.
The more forward-thinking businesses are beginning to drive efficiency and effectiveness in their supply chain processes through digital transformation. With digital innovation, companies can now boost their supply chain capabilities and processes and reap the financial rewards.
What is Digital Transformation?
Digital transformation is an incredibly wide-ranging term and at its most holistic, it involves a full culture shift across an organisation involving people, process, technology and data.
For our purposes, we’re generally referring to online technologies that allow businesses to become more agile, responsive, productive, and deliver value to the target audience at a low cost. As such, digitalisation of offers a wide array of benefits to the supply chain function within companies.
Why Supply Chain Companies Need Digital Transformation
Digital transformation can speed up most inefficient supply chain processes and streamline overall business operations.
As we’ve discussed above, digital transformation is more than moving from a paper system to a digital platform, as most of this has already occurred in many businesses. It’s also not simply a fit and forget tech upgrade. In fact, it takes positive reinforcement through people and continuous improvement and reviews to keep up with the changing business and technology landscape. It takes an ongoing curiosity and keeping abreast of trends and technology to seek a better way of doing things.
The digitalisation of your supply chain allows you to adapt to the changing demands of markets and customers.
It enables you to sustain efficiency and meet the high, and ever-evolving expectations of customers. Through this digital transformation, you can combine, or at least make more cohesive, the planning, logistics, manufacturing, and operations with the supply chain.
You can use integrated digital solutions to make your end-to-end supply chain processes more efficient.
In a logistics context, you can ensure prompt deliveries, eliminate or reduce dead miles, and make supply chain processes more sustainable. When your supply chain processes become smarter and run in tandem with other operational functions, you can achieve peak performance.
When a company invests in advanced digital supply chain technologies, it creates a new window of opportunity to scale up the use of the new digital platform to create more growth, mitigate risks, cut more costs, and, achieve more innovation.
Supply Chain Connectivity and Digital Transformation in Logistics
Recent tech advancements paint an optimistic and bright future of the logistics elements of the supply chain industry. Even though we’re focusing on logistics here, this has an impact on any company moving goods to any location. Just think from a consumer perspective how your expectations have changed on deliveries to your home, with accurate locations and delivery windows available from most online stores.
Digital supply chain tools allow companies to navigate asset location and status in real-time. For instance, your supply chain firm can use smart logistics like automated warehousing, remote fleet management, and cargo tracking.
On the other hand, there are also affordable cloud-based Bluetooth and GPS solutions to make tracking more efficient. With real-time tracking, you can measure transportation performance and spot inefficient route deliveries.
You can also use supply chain automation and intelligence tools to take adaptability of your supply chain variables to next level. You can also use digital sensors to spot major or minor supply chain disruptions and address the production problems in real-time.
It’s a brave new world and supply chain companies can minimise human intervention without compromising on visibility and responsiveness.
Shared Value
More collaboration and communication equal more value creation.
Digital transformation of supply chain processes improves transparency and creates a value chain. As a result, it makes it easier to share consistent information, improve visibility of inventory conditions, update order or project statuses, investigate future delay factors, and conduct neutral communication based on facts – not anecdotes.
By using digital technology and practices the efficiency of your supply chain processes can be viewed transparently by external and internal stakeholders. At the same time, it also improves your interoperability and end-to-end visibility meaning that people can take appropriate action to resolve issues before they become massive problems.
Supply chain digital transformation helps organisations plan and execute reciprocal, win-win strategies and maintain strategic relationships with supply partners and customers.
Meet Customer Expectations
Through digital transformation, supply chain companies can meet to the changing customer expectations. Digitalisation has allowed many companies to reassess their supply chain models. It is no secret that modern customers simply don’t have tolerance for incorrect or delayed orders.
Remember, supply chain teams that use digital tools can optimise their warehousing, order fulfilment, and shipping process. In a sense, digital transformation allows supply chain leaders to create a centralised virtual space to make changes in inventory, respond to demand and make vital logistics decisions in real-time.
Planning for Success
Unlike traditional planning, supply chain teams have to be aware of their internal capabilities to meet the vastly different demands of digital planning.
Examples of these demands are the use of advanced analytics and cross-functional collaborative tools to make data-driven and logical decisions. The same digital tools can help supply chain companies understand the traits and behaviours of the target audience better. It’s an effective way to adapt and take calculated risks but it’s certainly not the way “it’s always been done!”
Effective supply chain roadmaps for digital transformation allow companies to centralise their analytics function and help train and upgrade personal competencies as the roll out continues. This dedication to upskilling and fresh, new, exciting challenges, also helps companies to attain and retain top talent in the future.
Align Your Supply Chains with Digital Transformation
One point that is often missed in these transformations is the alignment of your supply chains (partners, suppliers etc) with your own digital transformation goals.
In Conclusion
With digital transformation, supply chains are striving to drive more growth, reduce costs, and mitigate potential risks across many sectors.
In 2021, it’s time to review your company’s entire supply chain function. This includes team competencies and capabilities and how you’re implementing digital technology and data governance to achieve success.
