Digital Transformation is changing the next era of supply chain management, which blurs the difference between digital and physical worlds and restores traditional supply chain operations with the latest advancements worldwide. The disruptive impacts of the global pandemic have completely changed the way the supply chain works before.
As a result, the global supply chain has strengthened the demand for implementing digitization in supply chain operations to increase resilience and mitigating risks. By adopting the digital supply chain transformation into the business operations, companies now identify the potential risks ahead and take necessary actions to avoid those conditions.
Today, digital transformation in the supply chain is not limited to risk mitigation. With technologies like RFID, GPS, and sensors, businesses now transform their existing supply chain structure into more flexible, open, collaborative, and agile digital models. But to relish the maximum benefits from the digital supply chain models, organizations must consider it a fundamental part of the overall business model.
“Digital supply chain have the capability for boundless information availability and excellent collaboration that results in improved security, agility and effectiveness.”
Industry 4.0 causes upheaval and forces businesses to reconsider their supply chain strategy. Several new technologies have arisen that are disrupting traditional working practices. Megatrends and client expectations, on top of that, alter the game. Aside from the necessity to adapt, supply chains have the chance to advance to the next level of operational efficiency, take advantage of emerging digital supply chain business models, and turn their organization into a digital supply chain.
Top 20 Ways digital transformation is reshaping supply chain industry
Let’s see the ways digital supply chains have reformed the supply chain industry.
1. Sustainability becomes important
Today, customers expect green products and supportable processes, making sustainability one of the most critical supply chain management trends. According to the NYU Stern Center for Sustainable Business, sustainable products developed 5.6 times higher revenues than non-sustainable products.
Another best example is Unilever’s sustainable living products, which are responsible for 70 percent of the company’s revenue growth. These developments emphasize the significance of environment-friendly supply chain activities such as transitioning from plastic to cardboard packing and adopting smaller packaging. Businesses must also be conscious of their carbon footprints, take action in becoming carbon neutral, and incorporate sustainability into their supply chain management.
2. Process mining techniques
A process mining technology is nothing but an analytical discipline for identifying, monitoring, and improving processes as they are by obtaining knowledge from performance logs easily available in today’s information systems. As per International Data Corporation (IDC), global spending on digital transformation would exceed $1.7 trillion by 2019, a significant increase of 42% over 2017. Improved productivity and income creation are driving this.
“By 2019, all fully digitized firms will derive at least 45 percent of their revenue via “Future of Commerce” business models,” according to IDC.
Process mining tools, under these models, provide vital means to audit, analyze, and enhance existing operations by providing objective, fact-based information generated from the transactional data that supply chains generate and utilize.
Blockchain is a decentralized, shareable, and unchangeable transaction database, and it can be tremendously disruptive. Although most supply chain blockchain applications are still pilot programs, smart contracts, traceability and verification, and other highly decentralized supply chain management tasks are considered critical possibilities for blockchain.
According to market reports– The post-COVID 19 global blockchain supply chain market size is expected to grow from USD 253 million in 2020 to USD 3,272 million by 2026, at a Compound Annual Growth Rate (CAGR) of 53.2% during the forecast period.
The major factors accelerating the blockchain supply chain market include-
- The rising popularity of blockchain technology in the retail and SCM industry
- Increasing demand for supply chain transparency
- Growing need for enhanced security of supply chain transactions
Moreover, the increasing demand to automate supply chain activities and eliminate intermediaries and rising government initiatives would provide profitable opportunities for blockchain supply chain vendors.
The Internet of Things has a lot of potential for improving supply chain operations, especially when collecting data from millions of devices and measuring performance in real-time. IoT devices enable a real-time view of operations from manufacturing to delivery all through the production process. Most things going through a manufacturer’s supply chain can have IoT sensors embedded in them, giving them unparalleled transparency and control of parts for assembly, finished goods, and other objects. IoT in the supply chain helps businesses:
- Authenticate the location and estimated time of the arrival of their goods
- Easily monitor storage conditions of raw materials or perishable products
- Streamline the complex movement of goods
- Administer goods immediately upon requests
5. Integration with E-commerce
B2B sellers can now use digital transformation technologies to discover and fix various inefficiencies in their supply chains. They can manage efficient operations and provide smooth client experiences thanks to networked devices. As a result, businesses are beginning to use interconnected supply chains within their eCommerce activities, allowing for a free flow of information throughout their enterprises.
6. Enhance services and cut costs
As the world of commerce move online, shipping and delivery prices will inevitably arise. Transportation, warehouse management, inventory storage, packaging, and material prices are rising at an incredible speed globally.
But now, time-consuming manual data input, such as keying in information on bookings, purchase orders, or sailing schedules, can be automated. Supply chain digital transformation streamlines managers’ workflows by automated procedures, saving them hours and helps to focus on even more value-added duties like negotiating better vendor prices or executing growth initiatives.
7. Cloud computing
IoT devices and smart systems generate a lot of data, and it has to be stored somewhere. That’s where Cloud Computing comes into the picture. It facilitates enhanced responsiveness to supply chain disruptions. Companies are now investing money in IT systems for centralizing and keeping data in the cloud.
Cloud computing also gains access to a 360-degree perspective of their supply chain activities, accurate real-time data, and the capacity to connect everyone in the supply chain, from manufacturing workers to delivery drivers. It makes it possible for organizations to track a product throughout its lifecycle closely.
8. Virtual reality
Virtual reality improves supply chain operations in four main areas:
- Data and process visualization
- Employee collaboration
- Product and process design
- Experience-based learning
It helps with interactive visualization, data acquisition, and high-fidelity simulation settings, among other things (like high-risk employee training), which allows manufacturers to design and architect in 3-D, assess designs and make crucial decisions about new products and customer buying decisions. Moreover, it enhanced the velocity, quality, and simplification in the order fulfillment cycle.
With VR in the supply chain, the product purchase decision power is enhanced significantly. This is because VR allows customers to interact with the products or change designs and visualize the changes in real-time via their devices. Once they are happy with the product, the configured order is released immediately to the respective manufacturers, suppliers, and distributors that provide the products. In real-time, the customer receives their delivery and installation schedule, making the entire purchasing process seamless and enhancing customer engagement towards the business or brand.
9. Augmented reality
AR in the supply chain helps speed up the production process, reducing downtime of machines, minimizing in-house costs, and achieving shorter sales processes. It is now widely used by organizations to increase their workers’ engagement and enhance overall productivity.
Using Smart glasses with Augmented reality (AR) technologies is one of the significant examples that direct the workforce across warehouses to quickly choose products, reducing human error. To aid decision-making, on-site employees may have access to data, including schematics, procedures, instructions, or maps. AR in the supply chain is all about making goods and services more efficient, cost-effective, and potentially error-free.
10. AMRs (Autonomous Mobile Robots)
Autonomous technology is continuously making a significant impact on the supply chain. It helps organizations move goods without human intervention or support in achieving inventory accuracy. This technology in the supply chain is widely used for warehouses and stores, highways, and last-mile deliveries or mines.
The key behind using AMRs is to enable worker’s productivity and seamless warehouse operations. In AMRs, there are mainly two types of robots being used- one is based on fleet management, and the other is the system that relies on picking optimization.
When people think of drones, they typically imagine ordering a package online and having it delivered to their front door by the drone. But drone technology is more than that. Today with a perfect combination of computer vision technology, AI, and RFID sensors, drones are performing inventory management tasks seamlessly within the warehouse faster and more accurately than the human eye.
In this context, drones offer some distinct benefits: increased tracking accuracy and efficiency, enhanced resource and workforce utilization, and safety.
12. Speed and affordability
These are two of the most significant advantages that supply chains may get from digitizing their procedures. Taking your business to the next technology level can help you save time and money by reducing the time it takes to make strategic choices and increasing operational efficiency. Manufacturers believe that by improving price and operating expenses, they will experience increasing sales through more computerized processes.
13. Lead times are kept to a minimum
Digital supply networks drastically minimize wait times. Orders are executed considerably faster, whether it is the lead time for acquiring raw materials or nailing down producing capacity. These include raw material lead times, manufacturing capacity reservations to ensure facility available at the right moment, and distribution planning.
14. Resolving incompetence in the supply chain
Out-of-stock products result in a loss of revenue for a company. A computerized supply chain can ensure that the business never runs out of stock or orders too much, resulting in significant discounts.
15. Supply chains generate large volumes of data
Today’s analytics can discover problem trends, detect fraud, and highlight savings and cost-reduction potential by establishing a digital edition of the end-to-end supply chain, encompassing historical documents, supplier performance records, and total landed cost possibilities. Analytics can also keep an eye on potential threats and make preemptive recommendations. Real-time transactional reporting and performance evaluations are made possible by analytics, allowing continuous development throughout the supply chain.
18. Make a demand-driven supply chain possible
A demand-driven supply chain is the ideal of supply chain management; nevertheless, it is unattainable without a digital system. Companies can alter items in the supply chain based on the market for those things using real-time sales data, allowing them to speed up the manufacturing of best-sellers while reducing losses on laggards.
17. Financial planning has improved
A digital supply chain decreases capital requirements and improves cash flow by holding excess stock in a warehouse for shorter periods and using a JIT methodology.
18. Data from the supply chain is now available
The data sets collected during day-to-day supply chain management are thoroughly recorded in a digital supply chain. As a result, firms may use big data techniques to improve a wide range of business processes.
19. Enhance cash flow and expense control
The faster the supply chain flows, the less money is bound up in it. According to a survey, $1 million was the average annual labor cost tied to manually entering data into their ERP and back-end systems. The digitization in the supply chain procedure eliminates such cash-burning situations.
The companies are now digitizing purchase order engagement activities, reducing manual data entry activities. It leads to saving millions of dollars. And now, nearly a 1/3 of the businesses would aim to move from a monthly cash forecasting process to a weekly process if the process were digitized.
A digital supply chain can assist a company in strengthening its business strategy (for instance, by moving into new market categories) and collaborating more efficiently with consumers and partners (for example, by basing S&OP decisions on data automatically extracted from customers’ ERP systems).
Brands are rethinking how they do business in light of the rapidly changing technological world, global and national tensions, and rising customer expectations. Brands are reimagining their supply chains to get more control over efficiency, adaptability, redirecting, and resilience.
Now is the most significant moment to start putting these strategies into action for re-evaluating their supply chains, eCommerce operations, and marketing strategies. Today, one of the most effective and safest methods to develop a resilient organization is to establish a modern, computerized, and interconnected supply chain.
So, what are you waiting for? If you are looking for digital transformation services, you are on the right platform. Transform your traditional supply chain operations with a digital supply chain and give your business operations a must-shot to grow and develop.
Rapidops is a leading digital transformation services company that develops and delivers out-of-the-box solutions, adding maximum value to your business. So don’t miss out on a chance to transform your business with the latest technologies and take your business to new heights.
Connect with us today, discuss your requirements with our experts and start your project today!
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