How to implement digital transformation in supply chain management?
Supply chain organizations have a larger need to be more flexible in the present disruptive and volatile environment, says Gartner’s VP analyst, Dwight Klappich. Supply chain companies have been investing into digitalization of their operations, which is evident from the fact that 2% of the companies head have it in their prioritization list. And why not? Because, investing in digital efforts can help such companies in increasing their annual revenue growth by 2.3%. However, the results of such investments aren’t as proportional to the hoopla created around digital overhaul.
So where’s the lag?
Digitization of supply chain doesn’t reap benefits because of two core reasons, which are:
Technology gaps- Attributed to tailed off technologies, which do not produce expected results after the innovation bubble has burst. For example, when the data are not interconnected or combined across functions like inventory, shipment, and schedules, they fail to fetch desired results. Also, lack of having advanced analytics, and supply chain technologies with limited functional capacity are the reasons for technology gaps.
Management choices- Top executives of supply chain technologies have found seizing the right opportunities rather difficult. The problem arises when the operational teams do not align the functions within an organization to technologies. Therefore, overlooking changes at the operational level becomes a core reason for the lag.
Planning and vision of an organization plays a key role in overcoming the lag. The supply chain companies must check if the technologies are aligned and matched with the operations. Articulating vision and strategy into improvement and innovation can get desired digitization results, because then the organizations focus on continuous strategy. Scalability is a key factor of digitization.
Digital overhauling includes defining vision across key areas like:
Automation- Configuration for real-time information processing without the need for manual intervention for data entry, data accumulation, and scrubbing.
Decision Making- Machine learning is a powerful technique which helps managers in dealing with scheduling responses, planning, and changing material.
Innovation- Including digital solutions which offer collaboration across suppliers, and customers is essential for actual digitization of supply chain. For instance, S&OP decisions can be pulled automatically from customers’ ERP.
Customer Engagement- Transparency through track-and-trace systems and regular updates can ensure customer engagement and satisfaction, resulting in great customer experience.
How have digital technologies evolved now?
Supply chain technological ecosystem has evolved to make great improvements in the industry. Developers have made some improvements in offering apps which focus on sharpening analysis, end-to-end planning, and warehouse management.
Artificial intelligence, analytics tools, and apps for tracing problems or anticipating deadlines- it has all become possible now. Automated recommendation can help in suggesting measures for correction.
Enterprise level operational implementation requires AI, ML, Internet of Things, Big Data, robotics, and all such technologies, which are much easier to implement now. All these technologies help in refining cost, agility, inventory levels, and service improvement. Latest technologies also become easier to implement because they are consistent, simpler to set up, and ensure extension across organization. For example, cloud-based technologies offer rapid implementation pan-organization.
Conclusion
Digital overhauling is a process spread across many years, and requires strategy with strong vision. Implementing successful supply chain digitalization needs talent which can perform functions. This blog is an explanation about why a digital strategy does not really materialize. A roadmap for digitization can bring about actual gains.
