Many businesses don’t like to admit that back-end systems often struggle to keep up, even with all the incredible advances in customer-facing technology. According to one survey quoted in Logistics Management, 80 percent of businesses surveyed said that digitized supply chains were the model of the future — but only 16 percent believed they were the model of now. That translates to a lot of room to grow and improve.
Nerve-wracking as the idea of transitioning your supply chain to a new system might be, it also means big opportunities to get ahead of the competition. Companies like SAP and Oracle offer digital supply chain software aimed at creating cooperation, integration and transparency at all levels of your process.
Digitization creates value in thousands of small ways, but there are four big ones to understand when you’re weighing the benefits. Let’s take a look at each one.
A cooperative system is an efficient system.
Ever heard the phrase “the right hand doesn’t know what the left hand is doing”? Silo-ing off key elements of your supply chain will give you that effect, only with far more than two hands!
Logistics and supply chain management is inherently an integrated field, so it’s surprising how opaque and segmented many supply chains are. Every piece has to work together — which is why a digitized supply chain can do so much to help your business. Cooperation is absolutely essential for a functioning supply chain, which is why seamless integration is one of the main goals of digitization.
SAP’s work with Microsoft is one great example of how adopting sophisticated digital supply chain tactics can have great productivity yields. Integrating their business elements through SAP allowed them to introduce machine learning algorithms into their supply chain and, in turn, reduce waste, implement predictive maintenance and leverage their IoT devices into a solid foundation for the future.
An integrated system is a responsive system.
Shortages, damaged cargo, late deliveries — these are just a few of the headaches all supply chains encounter. Sooner or later, you’re just about certain to face all of these. What’s really important is how your business reacts to them.
In such situations, it’s important to focus on the chain part of supply chain. Often, your biggest priority will be minimizing the downstream issues caused by problems further upstream. That’s where a digitized supply chain is invaluable.
Imagine you get the call one day that unexpected weather events have delayed an important shipment by several days. When upstream and downstream elements of your supply chain are able to communicate through a common platform or system, it becomes significantly easier to adapt in real time and minimize the damage to your bottom line. A good digital supply chain system will give you options including:
- Allocating stock and scheduling deliveries from alternate warehouses
- Changing manufacturing schedules to work around supply chain interruptions
- Adjusting inventory and production targets to the reality on the ground
- Near-instantly notifying all relevant parties of interruptions, schedule changes and inventory adjustments
When you’re adapting on the fly, as supply chain management inevitably requires you to, it’s essential to have these options at hand. A digitized supply chain gives you the tools when you need them the most.
A transparent system is a secure system.
This one might sound like a paradox, but it’s true. When deployed correctly, a system with increased visibility presents myriad opportunities for more secure transactions and operations.
For a very simple example, think of an Amazon or FedEx package and its tracking number. You can see where it’s been, where it’s going and when it’s expected to get there. If your package isn’t where it’s supposed to be by the intended date, you know where it was last and when it was supposed to go out. This transparency helps cultivate trust and efficiency at all levels of the system.
Other security benefits of a digitized supply chain can include:
- Permissions Control: Giving employees access to all relevant data doesn’t mean giving them free reign over the whole system. In fact, a digitized supply chain means more sophisticated control over who can see what, when.
- Digital Footprints: Using the term “paper trail” might seem ironic when discussing a digitized system, but that’s one of the big benefits of digitization. A properly designed and implemented digital supply chain system gives administrators increased monitoring ability over personnel logs, inventory, logistics and more.
- Facilitating Trust: A digital supply chain’s increased transparency is also helpful when cultivating relationships with partners and suppliers. When you have a digital supply chain, you always have receipts. Enhanced documentation capabilities are key to increasing the speed and satisfaction of dispute resolution.
An innovative system is a cleaner system.
Almost all businesses are now taking at least some steps to reduce their carbon footprint, such as using eco-friendly packaging materials. But a digitized supply chain offers golden opportunities to cut waste out of your practices, benefitting both the environment and your bottom line. A few of these waste-busting technologies include:
- Systems that monitor route planning, weather and traffic can maximize shipment efficiency and reduce fleet idle time. That means fewer fossil fuels burned and a substantial savings on fuel costs.
- Remote data monitoring through IoT systems allows you to keep tabs on variables like warehouse temperatures and prevent product from going bad.
- Improved ability to monitor breakage and damaged goods can help you design high-performance custom packaging solutions that are often greener and more efficient.
- Predictive analytics can help you ship only what you’re likely to need, when and where you’re likely to need it.
The best part is, that’s just the beginning! Like nature itself, green supply chain technology is still evolving. Getting started now makes it easier to ride the coming wave of green tech from a position of strength and stability. More generally, that’s true of the whole digital supply chain ecosystem. Early adopters are often able to leverage tech innovations most effectively as they continue to grow. A truly digitized supply chain may be a few years off for many businesses, but if anything, that’s more reason to jump in now. Get started with this list of digital supply chain providers, find one that fits your needs, and start getting ready for the future of supply chains.