Digitization of the Supply Chain: The future is now.

Innovation and automation are running rampant in the current digitized global marketplace. The market is larger, and smaller than ever, all at the same time. It’s exciting and and frightening, and frankly, I love it.

Thanks to technological advancements and the adoption of big data software we are living in the future every single day.

It comes at no surprise that supply chains, globally, have joined the digital movement.

The below graphic courtesy of SCM World illustrates the interest for innovative technologies to be integrated into the everyday supply chain operations.

Source: SCM World

At the same time, this graphic illustrates that there is a gap in the education for the utilization of supply chain technologies and how they can simplify the extremities of the modern supply chain.

Digitally integrating your supply chain can add value at multiple levels of the supply chain; from daily operational value, to larger picture strategic value, brand value/image and of course top-line revenue and return.

Streamlined Supplier Selection

Utilization of the plethoras of supply chain tools can simplify the supplier selection process to make sure you’re working with the right suppliers, from the start.

Big Data compilation is a focus point and contributing factor for the gain brought to supply chains through digitization.

Selecting suppliers, pre-evaluation, evaluation and assessment can be a tedious process, typically lengthy and filled with hiccups of unresponsive supplier relationships and indirect lines of communication.

With the help of Big Data and a supply chain solution, you can remove the paper-trail-mode of operation and streamline the supplier selection process. The ability to compile large amounts of supplier data in an all-encompassing digital platform has been a crucial technological advancement for global supply chains everywhere.

Turning this Big Data into action, that is where the real challenges lie.

Supplier Relationship Management with Ease

Supplier Relationship Management in a cloud-computing world makes for management capabilities quality and category managers of the past could only dream.

Digitization in Supplier Relationship Management typically creates a supplier/supply platform or ecosystem of sorts.

Planning and execution of buyer-supplier tasks and goals are easily communicated, performance of the supplier’s quality of production can be gauged and the compilation of responsive supplier-analytics can aid in dictating the tone behind supplier-based communication.

Strong Supplier Relationship Management, with the aid of digital solutions, creates a level of relationship transparency and collaboration that allows buyers to assess, manage and react to risk with complete confidence.

Cloud computing in today’s agile marketplace is widely accepted amongst most companies and therefore, the implementation of a digital solution for managing supplier relationships, should be a relatively easy transition.

Logistics and Shipping

As mentioned in some of our previous posts;

Automated logistics and the IoT combine to create transformational capabilities for traditional logistics.

Traceability, transparency and visibility are all gained when logistical operations function with aid from the IoT. Real-time, agile analytics and statistics allow companies with large-global supply chains to make real-time, agile business solutions.

The IoT actualized the tune having the whole world in your hands.

Source: Youtube

Paired with the benefits for supply chain visibility gained through the IoT, the use of automated logistics can show massive ROI (Forbes).

“Where drivers are restricted by law from driving more than 11 hours per day without taking an 8-hour break, a driverless truck can drive nearly 24 hours per day. That means the technology would effectively double the output of the U.S. transportation network at 25 percent of the cost” (techcrunch.com 2016).

SEI (Supplier Enabled Innovation)

Working with the right suppliers, determined by a proper evaluation, assessment, selection and relationship management process can create a strong basis for innovation and collaboration.

Digitization allows a basis for sharing goals and values instantaneously and continuously. Communication is the first step behind collaboration. Collaboration is the first step behind innovation.

Creating a basis for strong buyer-supplier collaboration will eliminate the silo communication and productivity of suppliers, not interested in creating mutual value within the relationship.

Digitization of the supply chain furthermore aids supplier “servitization”.

“Servitization refers to the process where firms set out to create greater value by increasing the services they offer” (Herrero 2016).

Better functioning solutions uplifting a business’ strategies; allow businesses to achieve new goals and reach to obtain higher images of innovation.

“Successful creation and implementation of such a strategy will help eliminate functional silos and increase communication and collaboration surrounding planning and production benchmarks and goals” (Ostdick 2016).

Value, Value, Value

It’s apparent after taking a closer look at the digitization of supply chain strategies and operations, that truly long-lasting value and relationships can be built upon the shoulders of technological solutions.

But let’s be honest, if you’re working within a global supply chain, chances are you’re ready to see some ROI.

So, in closing,

“Digitization of the supply chain has the potential to dramatically lower costs, increase product availability, and even create new markets unknown or unavailable prior to the availability of key technologies” (Banerjee 2016).

Until next week.


This publication is brought to you by author Sam Jenks, but also on part by Kodiak Rating — A Supplier Relationship Management SaaS functioning out of Stockholm, Sweden. Kodiak Community intends to challenge traditional business practices with innovative thinking and creation.