Everybody is talking about the digital transformation of supply chains. “Digitalization” is much more than a buzzword—it’s a very real shift in supply chain management, and the evidence supporting the critical nature of digital transformation is mounting. With the technology available, there’s great potential to use it to improve supply chains.
How do digital supply chains improve businesses?
Technology is continuously transforming businesses of all sizes, and participation in the digitalization of supply chains is a critical way to keep pace with the preferences and demands of today’s consumers and the ever-changing global marketplace. Digital supply chains bring availability of real-time information of freight and inventory in motion. They enhance decision-making power and improve the understanding of supply and demand and where capacity is. They also make it possible to respond immediately to marketplace changes or disruptions, including sudden spikes in demand, like when a product launches or has seasonal demand.
According to a recent Gartner study, among emerging technologies, digital business is one of the top two areas of investment, surpassed only by the cloud. Gartner defines digital business as the creation of new business designs by blurring the digital and physical worlds. Much of the concept of digital business is based on an organization’s ability to connect directly with customers and partners and to extract and analyze actionable data from the markets it serves.
What is the first step in digitizing the supply chain?
Before a digital supply chain can be implemented, there are several challenges and processes to address. Many organizations may think they can just “go digital” by digitizing functions within their existing processes. The companies that are successfully making digital transformations are not simply bolting apps and other software onto current processes. Rather, they’re closely examining and aligning core processes that support all aspects of digitizing, which includes having the right talent with the right expertise, the necessary integrations with carriers in place, and access to good, clean data.
Undoubtedly, digitization has been discussed in boardrooms and beyond. In their study, Gartner discovered that even though the majority of C-suite leaders believe that digital disruptions will happen in the very near future, only 25% have a digital strategy in place—and a mere 50% have limited strategies in place.
These results prompted Gartner’s recommendation that businesses develop both short- and long-term plans to invest in digital supply chain and other emerging technologies that will enhance decision making.
Is your organization looking to start the digital journey?
To be better prepared for a seamless digital integration and a successful transformation, ask these key questions:
- Do we have internal data governance and process adherence that will allow us to guarantee that information is sent in a consistent manner? Data consistency is required to achieve desired visibility.
- Do we have electronic integration capabilities (EDI, API, etc.) to deliver and update the data elements for the level of visibility we desire?
- Do our supply chain partners have electronic integration capabilities to deliver and update the required data elements?
- Do we have the coherent vision, talent, and infrastructure to execute a digital transformation?
As companies digitize their supply chains, two themes will emerge. The organizations that will succeed will do so by leveraging predictive and prescriptive analytics to improve both real-time decision making and enhance long-term business strategies. Those that lack of true business innovation, poor change management, and insufficient organizational liquidity will fail to deliver measurable business growth.
Connect with our experts to learn more about opportunities to digitize your supply chain.