What is Digital Supply Chain Management?
While you probably have already heard or read about the digital supply chain, you need to understand that we are talking about not only the present as well as the future. Digital supply chain management is a process of networking between companies and individuals that takes place in a paperless environment, only using web-enabled capabilities. While it has many different goals, the reality is that the main one is to deliver insights for increasing efficiencies, eliminating waste, and making it easier to achieve greater profits.
Objectives of Digital Supply Chain
Digital supply chain (DSC) is the practice of deploying advanced technologies across the entire chain to improve efficiency and reduce costs. In addition to improving overall performance, digital supply chain management can help businesses to:
- Determine where materials are coming from, how they are stored and transported, and where they end up.
- Reduce transportation costs by tracking inventory more accurately.
- Can help companies obtain more accurate data about product quality and compliance with regulatory requirements.
- Enable better collaboration between suppliers and customers.
- Increase productivity and reduce time.
Digital supply chain management is a key component of any company’s digital transformation strategy. It can help companies improve quality, reduce costs, improve customer experience, and increase operational efficiencies – all of which are crucial for growing today’s increasingly competitive businesses.
This lecture is a part of the supply chain management diploma program offered by AIMS. This diploma is also a pre-requisite for the PhD in logistics and supply chain management distance learning program.
How to Digitize Your Supply Chain? Best Strategies
Transforming to a digital supply chain involves several strategic steps that ensure a smooth transition and maximized benefits. The first step is to assess the current state of the supply chain and identify areas for improvement. This includes evaluating existing processes, technology, and performance metrics. Next, it’s essential to develop a clear vision and strategy for the digital transformation, aligning it with the overall business goals. This plan should outline specific objectives, timelines, and key performance indicators (KPIs).
1. Invest in Technology
Investing in the right technology is crucial for the transformation. This involves selecting advanced supply chain management software that offers capabilities such as real-time data tracking, predictive analytics, and automation. Additionally, integrating this software with existing systems and ensuring interoperability is important for seamless operations.
2. Change Management
Training and change management plays a vital role in the transformation process. Employees must be trained on new technologies and processes to ensure they can leverage the tools effectively. Continuous support and communication are also necessary to address any challenges and maintain engagement.
3. Collaboration Across Stakeholders
Fostering collaboration across all stakeholders, including suppliers, vendors, and customers, will drive better alignment and efficiency. Implementing robust cybersecurity measures to protect sensitive data is another critical aspect.
4. Progress Monitoring
Monitoring progress through regular audits and using data-driven insights to make iterative improvements will help sustain the digital transformation over the long term.
“When a company uses a digital supply chain, it begins to improve the way it handles assets, resources, inventory, and even people. After all, companies move them according to the current needs in order to reduce costs. Ultimately, the company will be able to see the results in terms of savings of time, money, and resources used.”.
Key Note!
7 Key Benefits of Digital Supply Chain
In an ideal situation, a company is able to monitor real-time carrier locations, customer interactions with products, inventory levels, and equipment. A supply chain of any model can be digitized, such as a lean supply chain. It will then use all this information to plan and execute at higher levels of performance, and also useful when applying the supply chain planning techniques.
1. Optimize Supply Chain Lead Times
When a company decides to be digitalized in SCM, it will be able to have better control over the supply chain. By making the right raw materials and production capacity available at the right time, efficiency increases.
2. Become More Forward-Moving
One of its key benefits, without any question, is the ability of the company to start thinking forward and becoming more forward-moving. Instead of focusing only on a backward-looking approach, adopting the opposite approach will increase the company’s efficiency and performance.
3. Connect And Relate Data Sources
When a company uses digital SCM, it must be able to monitor real-time aspects of the different areas of the company. This is the only way that the company has to improve processes, identify better ways to move products and do preventive maintenance.
4. Using Data Visualization to Generate Data-Driven Plans
As you probably already know, there is a lot of data available every single day. However, the main problem is that many companies don’t know how to handle this data and how to organize it properly. This can be done using data visualization that allows you to easily see a clear representation of what is going on inside your company in the different departments. By analyzing this data, you can then determine the areas that need to improve performance and become more efficient.
5. Improve Collaboration
One of the main benefits of using data visualization is the fact that this will allow you to make changes in both the physical and digital aspects of the supply chain. Ultimately, the collaboration will improve.
6. Improve Cash Flow And Cost Management
When a company uses the digital supply chain, it will make any necessary adjustments faster. This allows the company to have less capital tied up in the supply chain.
7. Make Customers Happier
The main goal of a company is to make its customers happy when they get their products or services. Therefore, when you use a digital supply chain, you will be able to better understand what your customers need and want. Besides, since it will be faster to make changes in the supply chain, you can deliver exactly what your customers want and need faster, leaving them happier.
What is Digital Supply Chain Software?
Digital supply chain software is used to track and manage the flow of goods across a business. It can be used across different industries, including manufacturing, retail, distribution, and transportation. There are many different types of digital supply chain software, each with its specific purpose.
- Some digital supply chain software helps companies keep track of inventory levels, while others help make sure products are moving through the supply chain safely.
- They help businesses save money by reducing waste and errors, and they can also help companies increase productivity by making sure everything is running smoothly.
- Digital supply chain software can also help companies comply with regulations such as ISO 9000 or 9001.
8 Types of Digital Supply Chain Solutions
Digital supply chain solutions encompass a wide range of tools and technologies designed to address various aspects of supply chain management. Here are some of the key types:
1. Inventory Management Systems
These systems use real-time data to track inventory levels, manage stock, and forecast future needs. They help in optimizing stock levels, reducing holding costs, and avoiding stockouts or overstock situations.
2. Warehouse Management Systems (WMS)
WMS software facilitates the efficient management of warehouse operations, including receiving, putaway, picking, packing, and shipping. It leverages automation and advanced analytics to streamline processes and improve warehouse productivity.
3. Transportation Management Systems (TMS)
TMS solutions optimize the planning, execution, and tracking of the transportation of goods. They help in route planning, carrier selection, freight auditing, and shipment visibility, ultimately reducing transportation costs and improving delivery performance.
4. Demand Forecasting and Planning
These tools use historical data, market trends, and predictive analytics to forecast future demand. They assist businesses in making informed decisions regarding production, inventory, and procurement, ensuring that supply meets demand efficiently.
5. Supply Chain Visibility Platforms
These platforms provide end-to-end visibility of the supply chain, enabling real-time tracking and monitoring of goods, from raw materials to final products. Enhanced visibility helps in identifying bottlenecks, mitigating risks, and improving overall supply chain performance.
6. Supplier Relationship Management (SRM) Software
Supplier Relationship Management (SRM) tools focus on managing and improving interactions with suppliers. SRM tools assist in evaluating supplier performance, managing contracts, and fostering collaboration, leading to stronger supplier relationships and better supply chain resilience.
7. Blockchain Solutions
Blockchain technology offers a secure and transparent way to manage supply chain transactions. It ensures the authenticity and traceability of products by creating a tamper-proof ledger of all supply chain activities, from origin to delivery.
8. Advanced Analytics and Artificial Intelligence (AI)
These solutions leverage big data, machine learning, and AI to provide deep insights into supply chain operations. They enable predictive maintenance, demand sensing, and optimization of various supply chain processes, enhancing efficiency and reducing costs.
“Digital supply chain solutions are an important part of any company’s strategy, especially as new technologies like blockchain continue to make their way into the industry.”.
Key Note!
Conclusion
In conclusion, transforming into a digital supply chain is no longer a luxury but a necessity in today’s rapidly evolving business environment. By strategically assessing the current state of the supply chain, investing in advanced technologies, and fostering a culture of continuous improvement, businesses can unlock numerous benefits, including enhanced efficiency, greater visibility, and improved responsiveness to market demands. Training employees, managing change effectively, and ensuring robust cybersecurity measures are also critical to a successful transformation. Embracing digital supply chain solutions not only streamlines operations but also positions companies to thrive in an increasingly competitive landscape. By following the steps outlined in our guide, organizations can navigate their digital transformation journey with confidence, achieving long-term resilience and success.