Leveraging digital technologies to tackle supply chain complexity
The global supply chain market has evolved significantly post-pandemic. Labor availability issues, shortage of raw materials, and limited logistics services force supply chain managers to continually revise their strategies. However, businesses were operating in an unstable climate, even before the Covid-19 pandemic hit. Flexibility and agility are increasingly becoming essential organizational capabilities and also have a huge impact on supply chain management. This calls on leaders to think of creative ideas to adapt to the growing demands of the digital age.
Today, with advancements in technology, the physical and digital worlds have become intertwined, disrupting the logistics industry. There is a ton of potential to improve supply chains, make them more adaptable, and reduce risk through the convergence of the physical and digital worlds. The transformation of conventional supply networks into a networked, intelligent and incredibly efficient digital supply chain is a key part of this.
A typical supply chain still frequently consists of a variety of mostly independent processes, including marketing, product development, manufacturing, and customer sales. These silos can easily be dismantled by modern digital technologies, which can further transform the supply chain into a fully integrated and transparent ecosystem for all parties involved, starting with suppliers of raw materials, components and parts, in passing through the transport companies as well as the customer who reaps the benefits.
Supply and demand signals originate from all points in the digital supply chain and propagate rapidly throughout the network. Additionally, increased openness gives businesses the ability to not only react quickly and effectively to disruptions, but also to anticipate them, model the entire supply chain, and change course quickly if circumstances change.
Building a whole new type of supply chain, more responsive and robust than the one you have today, is an ambitious goal. It is not enough to buy a variety of new technologies and master them for a successful digital supply chain implementation. To be able to survive in today’s dynamic market, companies must also discover the talents that exist today, both inside and outside the organization, and embrace a cultural shift that views digital transformation as a positive change and an opportunity.
Two closely related driving forces are driving this transformation. On the one hand, innovations such as big data analytics, cloud computing and the Internet of Things are spreading rapidly. On the other hand, customers, staff and business partners are increasingly demanding of companies to create more reliable and responsive supply chains.
The objectives pursued with a digital supply chain are diverse and go far beyond simply getting the right product into the hands of the customer as quickly as possible:
- It aims to improve responsiveness so that it can react more quickly to disruptions and changes in the supply chain.
- It should make it possible to continuously predict the operation of the supply chain in order to anticipate problems.
- The digital supply chain improves efficiency and reduces costs by automating SCM procedures.
- Using artificial intelligence and advanced analytics, supply chain management should be able to learn for itself from delays and errors, which should improve appointment accuracy and scheduling. the supply chain in general.
- In addition, the digital supply chain can form the basis – always up to date – of all financial processes of a company.
These goals can only be achieved when the supply chain is completely integrated, i.e. when suppliers, production, logistics, warehousing and customers are all connected and managed seamlessly from from a single, cloud-based command center. Only when you have succeeded in achieving full integration into your supply chain will new opportunities to react quickly and flexibly to interruptions or unforeseen developments arise.
The workflow in the digital supply chain can be accurately modeled, enabling the integration of all processes and ultimately allowing the customer to be informed quickly and accurately when the product is delivered. Delivery times can be drastically shortened, freight and inventory management can be optimized, and all of this can be done by integrating data across the entire supply chain, ideally in real time and without human intervention.
The success of any supply chain depends on an efficient and rapid flow of information. Since data comes from a variety of places, including suppliers, freight forwarders, warehouses, and dealers, its interoperability and quality are critical and can be major technology hurdles for businesses. These can be harnessed to produce very real competitive advantages: for example, Amazon can now accept order cancellations even when the delivery truck is already on its way and a short distance from the destination.
Forward-looking design, the next stage of development, can only be made possible by digital supply chains and enables supply chain managers to quickly integrate various highly complex scenarios as needed. As a result, businesses should be able to continue operating even in times of crisis, or at the very least, provide accurate information about the effects of disruptions and implement workable solutions.
The opinions expressed above are those of the author.
END OF ARTICLE