The digital transformation of the supply chain is rapidly changing the way businesses operate and interact with their customers. With new technologies, processes, and software systems emerging at an ever-faster rate, organisations must make proactive changes to stay competitive. The driving forces behind these changes are numerous and varied, such that their effect can be seen across all aspects of the supply chain.
The Common Key Drivers of supply chain digital transformation are discussed as follows:
1. Technological Advancements
The first driver of digital transformation in the supply chain is technology advancements. With the emergence of new technologies such as artificial intelligence (AI), big data analytics, blockchain, and, internet of things (IoT) robotics process automation (RPA). These are discussed as follows:
- Artificial Intelligence (AI): AI has the potential to revolutionise every aspect of supply chain operations. AI-based systems can be used to automate time-consuming tasks such as forecasting, inventory management and forecasting demand. Moreover, AI can help identify areas for process improvement and cost reduction that may have previously been overlooked.
- Big Data Analytics: Big data analytics make it possible for organisations to process large amounts of data and uncover insights that may have been difficult to find before. By leveraging big data, companies can make more informed decisions about how to optimise their supply chain operations and gain a competitive edge.
- Blockchain: Blockchain technology is being integrated into the supply chain in various ways. It can be used for tracking items through the entire supply chain, providing transparency and secure record keeping. Additionally, blockchain can be used to automate payments between different parties in the supply chain, eliminating the need for manual reconciliation.
- Internet of Things (IoT): IoT devices are being increasingly deployed in the supply chain to collect data about inventory levels, shipping times, and other relevant information. This data can then be used to optimise processes and increase efficiency.
- Robotics Process Automation (RPA): RPA is the use of software bots to automate tasks in the supply chain. These bots can take on mundane, repetitive tasks that would normally require a human operator, resulting in improved accuracy, faster processing times, and cost savings. Visit https://www.fortra.com/solutions/automation/robotic-process-automation to learn more about how RPA can revolutionize your business.
2. Customer Expectations
The second driver is changing customer expectations. As customers become increasingly digital-savvy and expect more personalised experiences, companies must adopt modern technologies and processes to stay competitive. Customers today demand faster delivery times, greater accuracy, improved visibility into the supply chain, and higher levels of convenience from their purchases. To meet these demands, organisations need to make use of digital solutions such as automated tracking systems and cloud-based software.
3. Regulations
Third, the regulatory environment is also driving digital transformation in the supply chain. Companies must adhere to ever-changing regulations and standards such as GDPR and ISO certifications, or face hefty fines and penalties. By leveraging digital technologies such as blockchain and automated compliance management systems, companies can ensure that their operations remain compliant with the latest regulations. To illustrate, Wal-Mart recently announced that it will be using blockchain technology to ensure supply chain transparency and traceability. This is being done to meet the new supply chain regulations in China.
4. Cost
Fourth, digital transformation in the supply chain is also being driven by the need for cost savings. Companies are racing to reduce costs while increasing efficiency and digital technologies offer powerful solutions that can help organisations achieve these goals. From automated tracking systems to robotic process automation (RPA), companies can reduce labor costs, eliminate errors, and streamline processes to improve profitability. For example, supply chain giant Amazon has used AI and machine learning to gain supply chain efficiencies.
5. Speed and Agility
The supply chain digital transformation is being driven by the need for speed and agility. Companies must be able to quickly adapt to changing market conditions, customer demands, and supply chain disruptions. By leveraging digital technologies, companies can increase their agility and improve their ability to react quickly to changing scenarios.
6. Visibility and Analytics
Finally, supply chain digital transformation is also being driven by the need for improved visibility and analytics. Companies must be able to track goods and services through the supply chain in real-time, as well as gain insights into customer behaviour and supply chain performance. By the use of digital technologies such as IoT sensors, big data analytics, and predictive analytics, companies can gain a deeper understanding of their supply chain to make better decisions.
Final Thoughts
Supply chain digital transformation is being driven by many factors. Technology advancements, changing customer expectations, regulatory pressures, and cost savings are all driving supply chain digital transformation. Companies that leverage the latest technologies can gain a competitive edge and remain agile in today’s ever-changing business landscape. In fact, supply chain digital transformation is no longer a choice, but rather a necessity for any organisation looking to remain viable and successful.
