Accelerating Supply Chain Transformation with Digital
Digital transformation enables organizational flexibility in business process automation and accelerates supply chain innovation. Supply chains have been lagging in adopting digital transformation compared to other industries, and the ongoing pandemic has pointed out the necessity of digital transformation in supply chains. Only a minuscule percentage of supply chain leaders today have a comprehensive digital ecosystem.
According to a recent global survey, 93% of the supply chain executives reported planning to take steps to make their supply chain more resilient. Enterprises are willing to digitize the supply chain to improve process efficiency, agility, and visibility. Traditional supply chains are characterized by rules based on historical transactional inputs, while supply chains integrated with digital technologies function real-time. Let us look at the multiple benefits of digitizing supply chains.
With a digital operational model, management has more flexibility in determining the right degree of centralization required to enable specialization or reduce process costs, despite varying local labour prices and productivity levels. When an organization centralizes some critical operations, it gains significant value through improved quality and productivity.
With digital technology integrated into your supply chain, you’ll be able to make faster and more informed decisions for each function. You may also correctly and economically assess performance by aggregating transactions and accessible information at the macro level, allowing you to make appropriate decisions.
By automating various labour-intensive operations and simplifying decision-making at many stages across the lifecycle, an end-to-end digital platform improves efficiency, improves data accuracy, and increases supply chain efficiency. When purchase orders are in danger of being delayed or complicated, warnings are automatically produced. In addition, automation selects the best delivery model, carrier, and timetable based on time, speed, priority, and other factors.
All digital transformation efforts have one purpose: to increase innovation. This advancement over traditional supply chain management will aid in the strengthening of the company’s business model while also assisting in the development of connections with both suppliers and consumers.
End to end customer engagement:
Digital revolution in supply chain management will improve customer engagement throughout their journey. For example, after making an order, a client can use the supplier’s automated tracking system to keep track of his purchase until he receives it. Customers will have more control, feel safer, and value their experience while purchasing that brand due to this.
Now let us look at some of the trending technologies currently used in digitizing supply chains.
- SaaS and Cloud Computing
- Web 2.0 and Portals
- Digital Twin
- Supply chain Management Software
Many small and medium enterprises cannot adopt advanced technologies due to the high costs involved. Such organizations can go for SaaS (Software as a Service) to leverage technology without high costs. Software is delivered over the Internet based on client demand in the SaaS model. As a result, clients only pay for what they require. SMEs may now employ powerful SCM software or, better yet, only pay for their capabilities, thanks to SaaS. SMEs may employ SCM applications while avoiding hardware and software costs by using cloud computing. They only pay for what they use. SMEs may use SCM software through the Internet, and the services offered are scalable to meet their needs. The SCM partners may utilize cloud computing to run their applications and share infrastructure and costs.
Corporate portals allow businesses and their suppliers to collaborate closely. Procurement portals (for the company’s suppliers – “upstream” component of the supply chain) and distribution portals (for customers – “downstream” portion of the supply chain) are the two most common forms of corporate portals. Procurement portals streamline business operations involving the purchase and delivery of goods between a single client and multiple suppliers. Business procedures involving selling or distributing items between one supplier and several clients are automated through distribution portals. The creation of applications and services inside the unique Internet environment, which can be utilized for generating and sharing information among users, is the driving force behind Web 2.0.
It’s a simulation of the supply chain, including hundreds of warehouses, inventories, assets, and logistics roles. The digital twin mimics the supply chain’s performance using AI and sophisticated analytics, including all the complexity that cause risks and weaknesses. A digital twin also improves visibility and allows your employees to capitalize on possibilities, especially in complicated supply chains. The digital twin market was estimated to be worth USD 3.1 billion in 2020. According to some industry analysts, it might continue to increase substantially until at least 2026, when it is expected to reach USD 48.2 billion.
Digital twins have a wide range of applications. The shipping industry could use Digital twins to collect product and packaging data and use that data to discover possible flaws and recurrent tendencies to optimize future operations. Warehouses and facilities may also utilize the technology to produce precise 3D models of existing facilities and test layout modifications or the addition of new equipment in a risk-free environment. In addition, logistics hubs may generate digital twins and utilize them to test different scenarios and improve efficiency. Furthermore, delivery networks may leverage the technology to give real-time information, reducing delivery times and assisting autonomous cars on their routes.
Supply management software controls supply chain transactions and operations, data flow, supplier relationships, and associated activities. Following are some of the functions handled by supply chain management software:
Inventory Management: Stock and raw material availability and amount are all tracked by this application. It is also used to forecast future inventory inflow and outflow trends.
Warehouse Administration: This capability lets for the administration of all operations in a physical products warehouse and the study of factors like storage space and labour.
Customer Requirement Process: This entails coordinating activities from the arrival of raw materials to the delivery of the final product to meet client expectations.
Logistics: Supply chain management software also saves valuable room for future business expansion in the relevant industry, eliminating the need to buy a new one, which might cause some downtime.
Returns management: The SCM software also handles the refund process, keeps track of any returned damaged products, and analyses and files any insurance claims.
Sourcing and supplier management: To maintain a healthy vendor relationship, the software also offers tools for identifying and dealing with viable vendors.
Analytics: Some are equipped with the tools necessary to assess any issues, discover their causes, and give risk management advice.
Increasing technology advancements are transforming businesses, and logistics and supply chain management may be the most impacted. The supply chain function, which is known for its extensive use of manual procedures and enormous volumes of data kept in various methods and locations, stands to benefit the most from deploying new technologies and following the most creative Supply Chain and Logistics technology trends