Digital Supply Chain
What is Digital Supply Chain?
Digital Supply Chain is an advanced form of logistics management that enables companies to keep all their resources, reporting platforms, and other essential tools in one digital platform. This type of technology helps to reduce errors caused by human mistakes and provides shippers with resources such as wireless sensor technology, blockchain solutions, GPS tracking software, and more. This system allows the shipper to review data in real-time, and improve communication with distributors, drivers, and customers. There are two types of digital supply chains: part-time and full-time. A part-time digital supply chain is the integration of digital platforms on a scalable term, while a full-time digital chain is a robust, all-inclusive swap over of everything online. The ultimate goal of the digital supply chain is to enable insights for increased efficiencies, doing away with waste and facilitating greater profits. Technologies such as GPS tracking, RFID, barcodes, smart labels, location-based data, and wireless sensor networks are all part of a digital supply chain, which requires a comprehensive strategy that is a fundamental part of the business plan to be successful. The benefits of a fully realized digital supply chain include savings in resources, time, and money, as well as a reduced environmental footprint.
Components of a Digital Supply Chain Strategy
- Data and Product Lifecycle Management: The components of data and product lifecycle management for a digital supply chain strategy include:
- Understanding customers' preferences to drive customization, better product, services, and experiences.
- Using 3D printing to accelerate innovation and new product development processes.
- Automation of data mapping and cleaning processes to increase speed and accuracy.
- Leveraging sensors, social media, retailer and big data analytics to shape, predict, and quickly respond to customer demands.
- Monetizing and leveraging data assets to maximize efficiency and cost savings.
- Developing a single governance process across digital projects to ensure alignment with organizational priorities.
- Creating service-based revenue streams to provide customers with near real-time solutions.
- Collaboration and Integration: Understanding how collaboration and integration can help with a digital supply chain strategy is essential for competing and succeeding in the "next normal." This webinar explains how utilizing multi-party collaboration, planning, and transaction execution in real-time across a network can help take digital efforts to the next level, ultimately leading to better performance. By leveraging human-machine collaboration, businesses can empower their digital supply chain strategies and stay ahead of the competition.
- Planning and Forecasting: Planning and forecasting can help companies optimize their digital supply chain strategy by anticipating potential risks and making decisions proactively. This allows them to be prepared for potential disruptions in the supply chain and to take proactive steps to ensure that their operations remain efficient and cost-effective. Planning and forecasting also provide companies with the necessary data to identify potential problems and opportunities for improvement in their supply chain. By using this data, companies can make informed decisions to optimize their digital supply chain strategy and keep their operations running smoothly.
- Asset Utilization and Capacity Planning: Asset utilization and capacity planning are essential components of a digital supply chain strategy. Leveraging intelligent automation to bring accuracy and efficiency to the supply chain can help optimize asset utilization and capacity planning. By using automation, supply chain professionals can identify areas of over-capacity and under-capacity and adjust production accordingly. Additionally, automation makes it easier to measure and monitor performance, detect anomalies, and troubleshoot inefficiencies in the supply chain. This helps ensure the right resources are available and available at the right times in order to meet customer demand. In turn, this can help reduce costs, increase profitability, and improve customer satisfaction.
- Safety and Security: When developing a digital supply chain strategy, safety and security considerations should include:
- Securing data, both in transit and at rest, with encryption and authentication protocols
- Protecting systems from malware, malicious actors, and cyberattacks
- Ensuring that any service providers meet industry standards for security and compliance
- Designing an audit trail to track activities and detect any anomalies or fraudulent activity
- Backing up data regularly to ensure it remains accessible in case of system failure
- Evaluating the security measures of all third-party vendors, such as carriers and suppliers
- Implementing access control and authentication measures for each user
- Ensuring that internal processes are compliant with relevant government regulations
- Establishing a security plan to prevent, detect, and respond to any security incidents.
Steps to Creating a Digital Supply Chain
Below are the steps that need to be taken when creating a secure, and successful digital supply chain for the business.
- Start with the Basics: First, identify existing problems with your current supply chain setup. It’s important that you figure out whether you need to make any process improvements before you add new technology. Think about what links in your supply chain will be the easiest to digitize, and start there. Remember, your existing supply chain will still need to function while you’re transitioning to a digital model, so it’s important that you create a plan that assures you can continue business operations during the shift.
- Assimilate Disparate Functions: Rather than viewing discrete functions such as procurement and manufacturing as disparate elements, focus on how you will achieve desired business outcomes with various stakeholders. During this step, you might want to consider deploying a survey to collect information about needs and assess awareness. A more holistic approach to digitizing your supply chain will assure that there are no weak links. Think about how you can bring everything together to accomplish the business goals that you’ll set out in the next step.
- Define Business Objectives: Try to think beyond operational efficiency here. Consider all the goals you want your business to meet, and think about how your digital supply chain can help you reach those goals. Make sure you keep track of these goals so that you can use the data your digital supply chain produces to confirm whether or not you’re meeting them.
- Make It Inclusive: After you appoint a team in charge of upgrading your supply chain, you’ll also need to get everyone else on board. This will involve developing a supply chain message and assuring that it reaches everyone in your organization. You can also use this opportunity to explore technology that will bring together cross-functional teams.
- Inventory Your Data: Examine the supply chain information your company is already collecting and decide how that data can be enhanced to better serve your business objectives.
- Look Outward: Think about what information your suppliers can share with you in an automated fashion using IoT and APIs, as well as what information you can share with them.
- Prioritize Projects: Start with easy goals. That could be using predictive analytics for demand planning, more reliable order processing, smarter logistics planning, warehouse automation, or better end-to-end transparency and real-time response to disruptions.
- Choose Tools to Help: The right tool can help you automate the transition to a digital supply chain so you can focus on the bigger picture. Supply chain risk management tools exist to help you track and control your supply chain, and these tools can make order intake, shipping, ordering supplies, and taking inventory much more efficient. Supply chain risk management software can have incredible benefits for your company beyond its intended purpose, and the artificial intelligence and advanced analytics in many of these programs will allow you to create more accurate predictions.
Traditional Supply Chain Vs. Digital Supply Chain
- Traditional supply chains rely on the linear progress of goods and services from sourcing materials to manufacturing, distribution, and then to the point of sale. Unfortunately, as each step of the supply chain relies on the step before it, delays at one point can create costly delays in another. In effect, each step involves an assessment and planning process that can easily be thrown off schedule.
- Digital supply chains use the data produced by every step of a supply chain to plan effectively and create dynamic responses when unforeseen delays arise. While traditional supply chains are often bogged down by a lack of actionable information, digital ones are empowered by a stream of real-time big data that enables more efficiently managed transportation and logistics.
Benefits of Digital Supply Chain
- Improved efficiency and performance: By utilizing advanced modeling and AI technology, our experts were able to improve the agility and efficiency of a digital supply chain. This in turn improved the speed and quality of decisions, allowing for greater resilience and enhanced performance.
- Increased visibility of the supply chain: Increased visibility of the supply chain helps businesses by allowing them to better anticipate demand fluctuations, allowing for more agile and decisive action. With better visibility, companies can identify potential constraints, bottlenecks, and delays in the supply chain and take proactive steps to avoid them. Improved visibility also helps to build better relationships with partners, as companies can more easily identify potential issues and collaborate better to address them. This can help to improve lead times, making companies more competitive and helping them to better meet customer expectations.
- Improved collaboration between partners: Improved collaboration between partners in a digital supply chain can help companies become stronger, more resilient, and more digital. By using a combination of human and machine collaboration, companies can improve the efficiency of their supply chain operations and take their performance to the next level. Through closer relationships with the end customer, companies can more efficiently manage their inventory and respond to customer needs in a timely manner. Having a better understanding of customer needs also allows companies to make more informed decisions regarding their supply chain operations and make adjustments in order to meet changing demands. This improved collaboration can result in higher levels of customer satisfaction, increased efficiency, and cost savings.
- Reduction of costs: By anticipating risks and making critical optimization decisions quickly, companies can reduce costs through the digital supply chain. This helps them to save time and money by making better decisions faster, improving the efficiency of their operations, and minimizing unexpected issues. Additionally, the improved resilience and performance of the digital supply chain allow companies to better manage their supply chain and avoid costly disruptions.
- Enhanced customer experience: A digital supply chain can significantly enhance customer experience by allowing companies to have a closer and more direct relationship with the end customer. This allows them to better understand customer needs, provide more personalized services, and respond to any issues quickly and effectively. It also enables companies to leverage data-driven insights to gain an improved understanding of customer preferences and to make better decisions that can increase customer satisfaction, loyalty, and ultimately, profitability.
- Increased agility to market changes: By utilizing a digital supply chain, companies are able to quickly identify potential risks and make decisions to reduce those risks while taking advantage of new opportunities. This agility to market changes allows them to make quick, informed decisions that will help them stay ahead of the competition and remain profitable in the long term.
- Improved safety and security: Improved safety and security within a digital supply chain can benefit companies by enabling them to anticipate risks, make optimization decisions faster, and increase the resilience and performance of their operations. This can help them to make more informed decisions, reduce costs, and improve their overall efficiency.
- Enhanced environmental sustainability: By improving the speed and quality of decisions, as well as resilience and performance, digital supply chains can enhance environmental sustainability by allowing businesses to monitor their resources and reduce environmental impacts.
- Improved risk and compliance capabilities: Digital supply chains improve risk and compliance capabilities by enabling companies to anticipate risks and make critical optimization decisions quickly and accurately. This leads to improved resilience and performance and helps ensure that decisions are made with the highest quality standards in mind.
- Enhanced business intelligence and analytics: By leveraging digital supply chain capabilities, companies are able to leverage advanced analytics and business intelligence to anticipate risks and make critical decisions faster and more efficiently. This increased level of insight and improved decision-making allows companies to improve their resilience and performance while also improving the quality of the decisions they make.