Supply Chain Digital Transformation: What, How, and Why It Matters?

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A recent Gartner survey found 61% of respondents agreeing that technology is a source of competitive advantage in supply chain management. Also, 50% of companies believe that technological advancements strongly impact the supply chain, transportation, and logistics operations. While supply chain digital transformation is a reliable and smart way to mitigate complex management challenges and technological disruptions, the digitization level of an average supply chain is only 43%, the lowest of the five businesses that were surveyed by McKinsey. 

The supply chain industry disruptions and inefficiencies are infamous, especially after the way they were laid open during the pandemic when businesses could not meet the sudden demand for goods. Hence, businesses are increasingly embracing smart tech-enabled supply chain management solutions and platforms that automate manual processes and fish out redundancies. 

They have started adopting digital technologies for supply chain management and smarter tracking methods such as Bluetooth Low Energy (BLE) for asset tracking, route optimization for efficient planning of routes, AI for data analytics, integrated tools for gaining better visibility, and more.

This write-up explores how digital supply chain transformation can benefit global supply chains, what it entails, and how brands can build an effective digital transformation strategy to reap the benefits.

Supply Chain Digital Transformation: What Is It About?

Digital supply chain transformation is the process of integrating and using technology for all operations, from sourcing and procuring raw materials and parts and designing to making a product. It involves using technology to overcome the dependence on redundant and time-consuming manual elements, estimating the demand, arranging and managing logistics, ensuring impeccable customer experience, and much more.

In simple words, supply chain management digital transformation is all about automation, increasing visibility into the operations, and reducing reliance on manual elements in order to make the supply chain more efficient, resilient, robust, and profitable for businesses. 

Next, we discuss why businesses must embrace digital supply chain transformation.

Supply Chain Management Digital Transformation: Why Does It Matter?

Data-Driven Decision-Making

When there’s a disconnect among processes, it’s almost impossible to compile the data and make accurate data-driven decisions leading to monetary losses. However, with smart supply chain management automation, businesses can integrate all aspects or processes of the supply chain and get better access to data, making data-driven decision-making possible. 

This way, businesses can make accurate decisions and minimize monetary losses. They can leverage the data insights to figure out the optimization pockets in their business models and increase operational efficiency. 

Improves Accuracy via Automation

With an end-to-end supply chain management digital platform, businesses can automate all the redundant processes that earlier used to rely on manual elements such as freight procurement, data analysis, and bills & invoices. This way, businesses can improve productivity, get more work done in less time, and boost accuracy as the in-built algorithms help them reduce errors in accounting, etc. 

Moreover, business stakeholders can get automated alerts for complex management tasks, such as incidental damages, delays, detention, demurrage, etc. These automated alerts are also predictive in nature, which helps businesses take proper steps to reduce the extent of damage they can cause, and unlock better risk management.

Better Customer Engagement and Experience

In traditional supply chain management, there is no provision for customers to track their shipments in real-time, or get status updates for shipments during transit. While the stakes for domestic shipments with limited movements are smaller, lacking visibility over the cross-border cargo can degrade the CX heavily. For example, when there’s a delay in the shipment delivery, and the customers aren’t informed of the updated ETA, they have to reach out to customer support to get more insights or, in some cases, cancel the shipment.

Supply chain digital transformation empowers businesses with smart, automated alert and notification capabilities that allow customers to track their shipments in real time, get automated updates about dynamic ETAs, and more. This enables better customer engagement and proactive customer communication when there’s a delay in shipment deliveries. All in all, the customer experience gets improved.

Minimize Costs and Maximize Profits

With supply chain management digital transformation, businesses can effectively minimize costs and maximize profits. For instance, a supply chain management platform enables businesses to effectively plan and optimize routes which saves fuel and, thus, money. Also, businesses can anticipate any contingencies, such as demurrage or detention, and minimize the impact it causes. 

In addition, businesses can process way more orders than they used to with a traditional supply chain, and that too more efficiently, which positively impacts their bottom-line maximizing profits.

Digital Supply Chain Transformation: What Are the Top Trends

Hyper-Automation

Hyper-automation is basically a combination of different technologies, such as robotic process automation (RPA), artificial intelligence (AI), smart machines, machine learning (ML), etc., for automating the maximum possible tasks and scale activities that other required heavy human involvement.

For instance, using IoT devices, businesses can collect real-time updates about the movement of products improving supply chain visibility. Hyper automation helps businesses optimize routes and reduce carbon emissions which helps with sustainable supply chain management.

Digital Supply Chain Twin

A digital supply chain twin is a virtual emulation of a real supply chain created to help businesses analyze supply chains better and predict success. Digital twin models use real-time data and snapshots of releases, planned sales orders, work orders, demand and supply, and pending approvals. The data usually comes from

  • IoT Devices (sensors)
  • Vendor Information (CRM data) 
  • Operational Databases 
  • User experience (customer tickets, online reviews)

Using the data collected from the above sources, the data analysts can accurately understand the behavior of the supply chain, predict any contingencies, and create an action plan to reduce costs and improve efficiency.

Immersive Experience and Applications 

Immersive experience basically involves the utilization of augmented reality (AR), virtual reality (VR), and mixed reality (MR), allowing the user to enter a virtual world for a better perception of things. It has applications in the supply chain industry, primarily related to customer onboarding, warehousing, etc. Businesses can use the immersive experience to train their employees better and more quickly, saving them onboarding and training costs and time.

Edge Ecosystems

Traditionally, all the data generated is sent to a cloud server or a centralized data center for data analysis. However, because the data has to traverse over a network for processing, it causes latency, making data analytics slow.

However, edge computing ecosystems enable businesses to perform comprehensive data analysis closer to where the data is generated or created. This reduces latency and allows businesses to process huge volumes of data instantly and make informed decisions quickly.

Granter predicts that about 25% of the total supply chain decisions will be made across edge ecosystems by 2025.

Supply Chain Security

Numerous organizations or businesses involved in the supply chain need to collaborate and actively share data to perform more efficiently and ensure growth. However, this increases the risk of sensitive data exposure as even a single weak link in the chain could expose the data of all the involved businesses leading to huge reputational and monetary losses.

However, several security measures are being opted for, ensuring security at all levels, from digital data and information (proprietary coding, intellectual data, customer information) to physical levels (including operations infrastructure, products, machines, devices, assets, and).

Embedded AI and Analytics

Embedded AI and analytics involve software solutions that are capable of real-time reporting, data visualization, advanced data analytics, and performing predictive analysis using ML right from the enterprise business application. 

Businesses can make better demand predictions and ensure there’s no overproduction, improve fleet efficiency and customer experience and get an edge over the competitors.

Augmented Data Intelligence

Augmented intelligence is basically a subset of Artificial intelligence that supplements human intelligence and allows them to make better decisions instead of completely replacing them. 

Augmented data intelligence involves combining new and existing technologies and using near real-time information for making accurate predictions and suggestions, using which businesses can make informed data-driven decisions leading to enhanced performance and better customer experience.

Supply Chain Digital Transformation: Building an Effective Strategy 

Identify the Pain Points

The first step towards building an effective digital supply chain transformation strategy is identifying the pain points and gaps in the existing system and how digital transformation will benefit it. This way, digitization will become a lot easier.

For instance, if a business relies on manual route planning, introducing a supply chain management solution that automates route planning would bring more accuracy and reduce waste. Or if documents are handled manually, document digitization is what businesses need to look for.

Identify the Right Business Fit

Once businesses have identified all their pain points or problems in their supply chain, they need to find software solutions that’ll help meet those needs. However, most businesses make the mistake of relying on individual software solutions for all processes. 

For instance, they end up purchasing individual software for route optimization, invoicing, tracking, and so on. And this not only makes the digitization process highly expensive but also inefficient, as it’s almost impossible to integrate individual solutions. 

Therefore, businesses must opt for an end-to-end supply chain management solution for supply chain digital transformation. Such a solution helps manage the entire supply chain ecosystem, including distribution, transportation, routing, deliveries, freight, and whatnot, all using a single dashboard. 

This way, as businesses can get all the functionality and features in place, they need not invest in individual solutions to manage all operations making digital transformation more affordable and effective.

Automate Manual Processes

While strategizing for digital transformation, and businesses must focus on automating every possible manual process in the supply chain. Manual elements lead to loss of productivity and inefficiency and inaccuracies, as humans are prone to making errors. 

However, by automating manual processes, businesses can reduce reliance on manual elements and inaccuracy, bringing more productivity and efficiency into the system. This way, businesses can minimize losses and maximize profits.

Centralized Control Over Operations

Another thing to focus on while creating a supply chain digital transformation strategy is ensuring a centralized control over the operations. Businesses must be able to plan, manage, track and monitor all operations from one place. 

Doing this will make it easy for stakeholders to collaborate, communicate and be on the same page, which is essential for an efficient digital supply chain.

Leverage Advanced Data Analytics for Business Decision-Making

Lastly, businesses must consider advanced data analytics for decision-making. Advanced data analytics is necessary for businesses to analyze tons of data that is being produced each minute and draw useful insights from the same.

This enables businesses to make instant data-driven decisions and pumps accuracy to the overall decision-making process, which is essential to stay competitive. 

Digital Supply Chain Transformation: Where to Begin?

Well, the first and foremost step towards successful digital supply chain transformation is opting for reliable integrated end-to-end supply chain management solutions. End-to-end supply chain management solutions offer everything a business needs to transform the supply chain into a digital and more efficient one.

For instance, businesses can automate freight procurement and shipment tracking and even plan routes using smart automation, making logistics management easy. Also, businesses can manage first-mile operations (automatic allocation of orders to drivers and hubs), middle-mile operations (ensure seamless hub-to-hub movement), and even Last Mile operations efficiently(ensuring timely delivery and good customer experience.)

Moreover, businesses can plan, manage, track and monitor the operations and the progress of their drivers, vehicles, and shipments using a single dashboard that is standard for all stakeholders, offering supreme visibility. Because of better visibility and a centralized system, businesses can even manage multiple 3PLs efficiently and ensure seamless operations.

In a nutshell, a supply chain management platform is what all businesses need to revolutionize their supply chain.

How Shipsy Helps in Supply Chain Digital Transformation?

Shipsy offers a smart integrated and end-to-end supply chain management solution that makes supply chain digital transformation a breeze. Businesses can manage the entire supply chain ecosystem from transportation and distribution to routing, deliveries, freight, and more.

Businesses can have 100% visibility and control over all the operations and assets making it easier for them to have a hawk’s eye view of the entire supply chain. This visibility enables businesses to ensure everything is working as expected and tackle contingencies, should they arise.

Also, using Shipsy’s supply chain management solution, businesses can plan routes (saving fuel and costs), track shipments (ensure seamless movement), introduce automation and digitize documentation & manage invoices (reduce redundancy), use data analytics (for data-driven decision making) and predictive alerts(for predicting contingencies and incidental costs), and ensure a wholesome customer experience.

Along with helping businesses create an efficient and digital supply chain, Shipsy also helps achieve the following results:

  • 12% reduction in freight costs
  • 32% increase in mid-mile vehicle utilization
  • 37% decrease in ETA SLA breaches
  • 64% increase in customer experience
  • 34% decrease in incidental expenses 
  • 23% decrease in last-mile delivery costs
  • 12% reduction in line haul logistics costs
  • 40% reduction in customer query calls per order
  • 18% increase in delivery net promoter score

To learn more about how Shipsy functions and for effective supply chain digital transformation, book a demo now!

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