The supply chain, along with the rest of the economy, is undergoing a major digital transformation right now. The development of new Industry 4.0 tech — like Internet of Things (IoT) sensors and big data analytics — as well as the increasing availability of computer resources has made digitization a more and more compelling option.
Digital supply networks offer improved visibility and transparency for all stakeholders. The digitization of supply chain data also gives supply chain professionals access to a wide variety of new tools — like AI analytics — that can make workflows much more efficient, improve forecasts and streamline communication between stakeholders.
These are the essentials of digitization — and how logistics professionals can take advantage of the latest developments in tech to improve supply chain processes.
The benefits of supply chain digitization
For the moment, digitization still isn’t the norm — though this is changing fast. According to predictions from Gartner, “at least 50% of large global companies will be using AI, advanced analytics and IoT in supply chain operations” by 2023.
For this reason, supply chain digitization — if accomplished soon — could provide a massive competitive advantage to adopters. Businesses that wait too long, however, could be left behind.
The tech can provide a wide range of benefits. For example, supply chain visibility continues to be a major problem for logistics companies around the world. According to data from TRUE Global Intelligence, around 55% of a business’s data, on average, is “dark data” — information that’s not accessible to the organization in any meaningful capacity.
With digitization, it’s possible to organize that data, breaking it out from data silos or moving it from analog records to digital storage.
Improved records can boost visibility across the organization and the supply chain, providing analysts inside and outside a logistics company with better information on item location, condition, orders and demand.
Advanced data analytics tools can also help companies break down this information and, over time, help them improve fill rates and better anticipate fluctuations in demand.
In the future, the tech could also be used to power autonomous supply chain management. These are workflows that adjust by themselves, with minimal to no human input needed to keep the system running smoothly.
Improved automation and data visibility can also help SMBs comply with industry-standard regulations on quality assurance.
For example, the International Organization for Standardization (ISO) only awards certification for its 9001 Standard for Quality, which regulates business quality management systems, to businesses that systematically define and maintain processes — like those that collate shipping data and organize it for presentation in reports or other documentation.
How you can digitize your logistics workflow
For supply chain professionals wishing to digitize some or all of their business workflows, it’s best to start with identifying your current needs.
Typically, experts recommend businesses begin with an audit of its supply chain data. This process will help you and your team understand what kind of information you already gather, how easy it is to access and which data points may be unavailable or not sufficiently visible.
Next, you can identify the key benefits you’d like digitization to provide your business. Having a clear idea of these benefits helps you structure your strategy and helps you learn what tech you’ll need to achieve your goals.
In the final step, you can begin investing in specific capabilities and tools.
The best approach to digitization will be one that focuses on the longer term. An effective digitization strategy will need to be maintained well into the future — and big data analytics tools are most powerful when they have large stores of data, collected over a long period of time, to work with.
It’s also generally a good idea to prepare for a phase-in period. New systems, especially those that need large pools of existing data, won’t always provide a return on investment right away. In some cases, employees may need to learn these new tools and adapt them to their workflows.
Taking advantage of supply chain digitization
Digitization can offer major benefits for a company’s supply chain — like improved data visibility and transparency.
More and more companies are adopting digitization. In the near future, it may be the norm across the economy for the supply chain to be mostly digitized. For companies and supply chain professionals that want to stay ahead of the competition, investing in digitization tech and platforms is likely a must.