The global supply chain is faced with ongoing obstacles, including labor shortages, delays, winnowing resources, and increasing consumer demands and expectations. Digitalization is a viable solution for all parties in the supply chain to create more efficient processes
Digital transformation is sweeping through industries, including logistics. Digitalizing the supply chain with technologies like robotics, IoT, data analytics, and digital thread help businesses overcome supply chain obstacles and develop more efficient and reliable processes.
What Is Supply Chain Digitalization?
Supply chain digitalization is an answer to the ongoing disruptions and delays that are continuing to impact businesses. As the industry faces increased pressure, rising consumer demand, and disruptions that create a ripple effect through the supply chain, new technologies ensure that logistics companies can keep processes streamlined and effective.
What Technologies Are Necessary for Digitalization?
Smart Technology
Smart technology refers to the use of IoT devices and applications. Industries of all types have been increasingly adopting smart technology and finding new use cases, including logistics.
In this industry, smart technology can be used for cargo tracking, automation, robotics, and more. These technologies gather vital data to give logistics companies a transparent and comprehensive view of the entire supply chain – end-to-end – to find areas for improvement.
Using automation increases the efficiency of logistics companies by relieving the burden on human workers. With robotics and other automation devices, logistics companies can complete mundane and repeatable work, giving employees the time to focus on creative processes that only humans can tackle. Automation is also useful for reducing human error, a common source of delays and lost revenue.
Business intelligence technology is another vital part of optimizing the supply chain. Using data collected from IoT devices, logistics companies can take immediate action to improve processes or navigate delays and disruptions.
Cloud-enabled GPS and RFID technologies also fall under the umbrella of smart technology. These technologies are used to improve the accuracy and transparency of supply chains, such as the products stored in a warehouse or vehicles with goods in transit.
Demand-Driven Supply Chain Management
Supply chain flexibility is necessary to adapt to the continued disruptions and delays impacting the global supply chain. Demand-driven supply chain management isn’t new, but with the power of data analytics, logistics companies can become more agile in the face of changing expectations and market shifts.
Machine learning and predictive analytics can be used to gather massive amounts of data and process it in real-time. Logistics companies then have the insights necessary for rapid action, ensuring they can serve customers effectively and address market changes that could have an impact on the business.
Cyber Security
Though not a new technology, cyber security should be included in digital transformation for supply chains. Technology can be beneficial for virtually all industries, but it also exposes them to new risks and vulnerabilities that can be disastrous.
Logistics is at heightened risk from the multiple parties involved in the process. If any party has weaknesses in their cyber security, a hacker or cyber criminal can exploit their vulnerabilities to gain access to the entire network and compromise sensitive business and client data across multiple companies.
Cyber security needs to be at the forefront of operations across manufacturers, suppliers, and other parties. Everyone needs to be on the same page with cyber security protocols and procedures across every point in the supply chain to ensure the entire network is secure. Partnerships need to be built on a shared dedication to cyber security monitoring, risk evaluation, and intervention.
Supply Chain Customization
Rising consumer demands and expectations are an ongoing challenge for supply chains. Cargo space is at a premium, compounded by disruptions in the supplychain that limit it further, but consumers still expect fast fulfillment and shipping with minimal delays or mistakes.
Because of this, consumers aren’t accepting of lengthy processing times, extensive delays, or mistakes in the delivery process that add to the shipping time frame. Consumers have a lot of choices in the current market, giving them options to turn to if one company’s shipping and fulfillment process doesn’t hold up.
Centralized distribution is a solution that includes real-time inventory management to reduce errors and expedite processes. Customization options and supply chain transparency also streamline processes and keep companies agile in the face of growing demands from consumers.
Digital Thread
The digital thread is the use of digital tools to design, evaluate, and manage the lifecycle. It’s essentially a closed loop between the digital and physical worlds. Manufacturers, suppliers, and consumers can share information openly to ensure a responsive supplychain.
Despite its many benefits, the digital thread can’t be implemented on its own. The parties involved need to collaborate to form an integrated value chain that improves transparency and communication.
Embrace Digitalization for Supply Chain Agility
Port congestion, limited cargo space, labor shortages, rising consumer demands, and other challenges are significantly impacting the logistics industry across the globe. Implementing supply chain technology like IoT, data analytics, and cloud-based GPS can keep logistics companies flexible and capable of serving consumer needs