Digital Supply Chain

Digital Logistics: How New Technologies Will Transform the Digital Supply Chain

There is no denying that technology is growing and improving at an exponential rate. Every day, we are introduced to new ideas and new mechanisms that make our day to day activities faster, smarter and more efficient. At times, it can be hard to imagine how digitized our homes, businesses and communities will be in the near future.

The Digital Supply Chain Incorporates New Technology

In many ways, supply chains have incorporated a variety of technologies into their operating systems. From computerized route planning to real-time package tracking, to automated warehouse organization and management, supply chains have capitalized on a number of ways to improve and integrate their operation.

However, these technologies are only the beginning. State of the art robotics, advanced analytics programs, artificial intelligence and progressive networking systems continue to reconstruct how we conduct business. As new technologies continue to emerge – which they most certainly will – it will be important for supply chains to continue finding ways to harmonize their services with evolving expectations in order to stay competitive.

What is the Digital Supply Chain?

There is no “one size fits all” digital supply chain model. However, a digital supply chain can essentially be defined as a supply chain that collects and consolidates the data generated at each level of the supply chain. A digital supply chain then interprets that information by highlighting strengths and weaknesses within the chain. This allows supply chain managers generate solutions to improve productivity and performance, while simultaneously removing the risks associated with guess and check problem-solving.

Benefits of a Digital Supply Chain

As a supply chain becomes more digitized, the more benefits are realized. Most prominently, digital supply chains enhance quality control. By reducing the risk of overlooking mistakes, companies have the potential to save significant sums of money that would otherwise go towards damage control. Digitized supply chains also allows companies to easily locate flaws in their processes and create targeted solutions that will improve the overall performance of the supply chain. Furthermore, digitized supply chains create a uniform portfolio of information that all entities have access to, which in turn leads to increased organization and cooperation.

Digital supply chains don’t just generate information for supply chain managers. They can also collect and provide data on specific shipments or goods, which can then be transferred to inquiring wholesalers and retailers. Consumers also can have access to information about where their purchases originated and the manufacturing process that packages went through before arriving in their possession. Supply chain operators can benefit from distributing this information to consumers as well, as the shared data will allow consumers to provide informed feedback.

Global Digital Supply Chains

The global market does present some interesting challenges for digital supply chains. Part of the lure of digitization is that it allows products to move relatively efficiently through the supply chain. That efficiency, however, often relies on uniformity in local communities, overarching laws and manufacturing practices. But that uniformity is disrupted as supply chains begin to operate on a global scale because each nation incorporates its own individual set of rules. A unique challenge for digital supply chains moving forward will be untangling those subtle differences in policies between business partners and discovering ways to integrate them into the supply chain’s systems.

Converting to a Digital Supply Chain

Converting to an entirely digital system can be a daunting concept. In many cases, digitization requires high upfront costs, extensive planning and consistent communication between each link in the supply chain. But this does not mean that smaller supply chains can’t take advantage of what digitization has to offer. It might be conducive to identify where digitization can generate the greatest cost savings for the least investment. Those saving can then be used to gradually phase in additional digital components over time. In this way, supply chains with limited resources can begin to participate in and benefit from these new and evolving technologies.

Regardless of whether you’re a small supply chain manager or a global magnate, as technology continues to grow, it becomes more essential to adjust services to meet changing consumer demands. Adding digital components at various levels of the supply chain will help meet those demands, avoid business failure and address the increasing complexities of supply chain management.