What You Need to Know About Supply Chain Digital Transformation

What is Supply Chain Digital Transformation?

Digital transformation is the process of replacing legacy systems with modern, more efficient technology that better serves business processes. Supply chain digital transformation deals specifically with technology and processes that optimise the flow of goods, services, and information from the point of origin to the end customer.

Digital technologies can improve supply chain management in numerous ways. For example, existing systems could be struggling with unacceptable delivery delays. Some businesses may simply carry on as normal, in the hopes these issues will balance themselves out eventually or may believe they don’t need attention. These businesses run the risk of maintaining a poor standard for customers, which leads to poor retention rates and lost profits.

Key Technologies Driving Digital Transformation

Cloud Computing and Cloud Storage

One of the main problems with the old supply chain model is that information had to be held onsite, with managers in different locations only able to access their own information, and needing to manually send details to other sites.

This could lead to information being missed, and when the supply chain relies on multiple locations working as one, issues are inevitable.

Cloud technology makes it easier for supply chain managers to store and access information in one location, and access it remotely. Data can be shared more easily among sites and teams, making supply chain management and planning more efficient.

Moving supply chain technology into the cloud also greatly reduces IT infrastructure costs. Sites no longer need to house their own servers. Instead a single point can be created via cloud software, allowing authorised employees to access vital supply chain information from one place, using a single, connected system.

Cloud computing also allows supply chain operations to scale quicker, and more easily. Rather than relying on dedicated fixed servers and hardware being installed, additional capacity can be added to the cloud platform, allowing more storage and teams to access the information immediately.

Artificial Intelligence (AI) and Machine Learning (ML)

With more data available across the supply chain, and with more data coming from multiple sources, the next challenge is interpreting and using the data to make better decisions.

This can be hard to do manually, especially when huge amounts of information is being sent from multiple places and need to be collated and analysed together.

AI and machine learning are great tools in the supply chain for rapid data analysis and presentation, allowing more accurate decisions to be made.

Using AI and ML, supply chain managers could plug in data from across the entire supply chain and have it analysed in seconds, with results presented in easy to understand formats through a dashboard that would be available in the cloud.

With AI and ML doing the data analysis, bottlenecks in the supply chain could be identified much earlier, along with other inefficiencies, so changes can be made before these problems disrupt the supply chain.

Without this vital information, managers may not even realise there is a problem until after it occurs, by which point operations have been disrupted.

AI and ML powered data analyse creates a more proactive response to issues, enabling teams to act before anything goes wrong.

Plus, because these tools are deployed in the cloud, they can be instantly updated with new information across multiple sites and provide new insights on an ongoing basis.

Internet of Things (IoT)

The Internet of Things (IoT) is the final piece of the supply chain technology puzzle that connects cloud, mobile and analytics.

IoT transforms supply chain management using devices, sensors and trackers to connect systems across locations and use GPS technology to monitor products and deliveries.

With IoT, managers have access to a mass of real-time supply chain data, which can be stored and analysed in the cloud to provide up to the minute insights into supply chain performance from a single dashboard.

IoT can help to automate parts of the supply chain, like triggering pre and post arrival tasks, reducing delays and the potential for human error, allowing the supply to run more smoothly.

It can also provide vital information like storage monitoring, shipment tracking and locating goods in storage to give updates on stock levels in real-time.

IoT also provide essential, real-time, information that can help with contingency planning and risk mitigation to proactively identify problems before they cause issues.

For example if some products have to be stored in certain conditions (like food), IoT monitors could be used to provide real-time data on the conditions of the storage area. Everything like humidity, atmosphere, temperature and even air pressure could be continually monitored.

The Role of Data in Supply Chain Digital Transformation

Harnessing Data Analytics and AI for Improved Decision Making

Delivery congestion, manufacturing delays and stock management are often cited as the biggest disruptors of the supply chain. One of the biggest drivers of supply chain inefficiencies is the lack of transparent data and analytics, especially among larger operations across more sites. Historically this has been difficult to manage, with data only available on-site, with manual input required to update managers in other locations.

However, big data analytics and technology like cloud and IoT have become one of the biggest innovations of the supply chain. First, data has been centralised, with information sent to a single point in the cloud that can be accessed, updated and analysed remotely. This has provided much better oversight of supply chain management by breaking down siloes of information and giving a much clearer picture of the entire supply chain.

Adding AI to this data management has taken it a step further. Using AI and ML, data can now be analysed in real-time, with updates instantly provided via a central dashboard to provide proactive insights and allowing managers to identify and solve problems before they occur. For example, bottlenecks in delivery schedules can be identified before they happen, enabling managers to redeploy resources to different locations to clear backlogs and keep products flowing.

Stock oversight can be managed centrally too, with manufacturer data fed directly into the supply chain system, so levels can be monitored and updated quicker. Data can also be used to identify trends and allow managers to spot potentially problems long before they occur. For example, stock and delivery data can be analysed to identify any upturns in demand, meaning more people can be brought in to manage demand and prevent delays and disruption. In the past, all this could only be done after problems had occurred, by which point the supply chain was already struggling.

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The Benefits of Supply Chain Digital Transformation

Enhanced Visibility and Transparency

There are many intricate elements to the supply chain process and if businesses don’t make proper note of this information they can’t operate efficiently. However, businesses leveraging digital technologies like data analytics and IoT, can keep an accurate track of product details, stock numbers and similarly important figures and share them with the individuals who need them at the touch of a button.

Improved Efficiency and Cost Reduction

One of the issues with “traditional” supply chains is they can be costly and inefficient, particularly in large operations working across multiple sites. For example, stock management can be difficult to manage for businesses with large inventories, or with multiple distribution centres. Not having oversight of stock availability across locations can result in delays to deliveries if orders are made for distribution from one location where stock is low.

A modern supply chain management system solves this by providing real-time data insights across the entire supply chain. This not only gives managers insight into their own location, but also gives them information of every other site on the system. If stock is running low in one location, but is overstocked in another site, it allows managers to quickly move products around to avoid disruption. IoT can also greatly reduce costs by removing the need for each location to house their own servers and computer systems. Instead they can all access one system remotely, with any updates happening in real time.

Strengthened Collaboration and Integration

Keeping everyone connected and informed is essential for businesses that ship products to customers as there are intricacies at every level that need to be managed. 97% of employees believe the quality of communication impacts their work on a daily basis, according to CMSWire. So consistent communication and collaboration efforts are essential.

Businesses that embrace new ways of communicating are those best placed to enjoy a boost in productivity, while those using legacy systems are reliant on outdated ways of working. If your company doesn’t have a consistent method of sharing data from the top down, across all departments, essential information can easily be lost in transit. This can be especially difficult when different forms of contact are scattered across numerous platforms and devices. 

Overcoming Challenges in Supply Chain Digital Transformation

Company Resistance

70% of digital transformations fail due to resistance from employees, according to McKinsey. Employees might not look upon digital transformation favourably if they believe the new technologies can replace them entirely. This is specifically true for automated systems that affect warehouse management, where AI-powered programs can produce an automated tracking system and input product data faster than a human. However, in most cases, employees will be expected to work alongside new technology, not be replaced by it.

Employees need all the resources available to improve their knowledge. Training courses and workshops are an excellent way to onboard colleagues to the idea of new technologies, as they prove adaptability is possible on an individual level.

Ensuring Data Privacy and Security

With the rising amount of data being produced and shared across the supply chain, it’s important to have rugged cybersecurity measures in place to defend against cyber attacks. With the average amount of time to contain a breach being 80 days, according to IMB, cyberattacks can turn into very expensive issues very quickly. Following GDPR (General Data Protection Regulation) guidelines is non-negotiable. These are the minimum rules a business must follow to protect customer data and businesses that don’t abide by GDPR rules can be hit with large fines.

Make the most of supply chain technology and digital transformation with Elite Group

At Elite Group, our team is well-versed in helping businesses of all kinds utilise new technology solutions and enjoy further business growth. Our specialists can help you identify problems in the supply chain and provide expert advice on the best technology and solutions to help you overcome these problems. Whether you’re looking to continue your digital transformation journey or you’re taking your first steps and are unsure where to start – our experts are here to help. Contact us here today or call 0344 875 8880.