Transforming does not equal change. Naturally evolving since before the industrial revolution, the pace of innovation in supply networks has quickened in recent decades. Supply chains have been more effective because to technological developments, including automation, as well as computer inventory, routing, and record keeping. Enterprise resource management (ERP) software has advanced in recent years, allowing supply chains to adapt to the needs of the international market.
However, despite these developments, conventional supply chains continue to rely mostly on regional operations and paperwork, as well as the distribution of items on pallets to mass-market resellers.
However, modern supply chains need more than minor adjustments to function well in the digital age. E-commerce, mobile networks, and social media are all examples of consumer-driven digital platforms that give consumers the ability to find what they’re looking for, have it customized to their preferences, buy it at any time of day or night, and have it delivered to their doorstep within days, if not hours. The globalized market is being pushed by the individualized distribution of single-unit items, gradually replacing the palletized method of production and trade.
The good news is that consumer-driven digital technologies like the Cloud, Big Data, and the Industrial IoT of Everything (IIoT) are helping to transform traditional supply chain structures into intelligent digital designs that enable end-to-end awareness, wider collaboration, more actionable insights, and faster responses.
A Look at The Emerging Digital Supply Chain Trends
Digital technology’s rapid spread is only one factor in the supply chain’s rapid evolution. More than one market and industrial megatrend are converging to demand and facilitating the development of an intelligent digital supply chain.
Generational shifts in customer expectations: Millennial and Gen Z buyers have much higher standards than their parents had at the same age. These consumers are the first to have grown up with the Internet and mobile technology. As such, they are the most likely to use their smartphones and other mobile devices to read about, compare, and ultimately review a product before making a purchase. Millennials and Generation Z consumers anticipate shorter delivery times for customized items and services they acquire online.
Product cycles are shortening as the battle for market dominance heats up. The product renewal cycles of many firms, especially those in consumer electronics, software, and other technology areas, are being shortened to acquire a competitive edge. In light of the accelerating rate of change, there is a pressing need for improved supply chain forecasting and planning that uses prescriptive and predictive analytics to boost precision.
Research indicates that between 2016 and 2024, the outsourcing of manufacturing services will increase by almost 5% CAGR. However, supply chain management may become more difficult and complicated when coordinating logistics with other parties. Companies increasingly rely on ERP and MRP systems, which enable remote management of day-to-day operations, to achieve this goal.
C-suite executives who understand the supply chain recognize that it is more than just a tactical function of the company. Chief procurement officers are increasingly taking on the role of chief supply chain officers, reflecting the growing significance of their roles. Sales, revenue, and operational goals are becoming more dependent on supply chain knowledge and control.
Simply put, the digital transformation of the distribution chain will allow for a more unified, automated, exception-based procedure that runs on state-of-the-art technological tools by bringing together an organization’s traditionally siloed buying, planning, and logistics processes onto a single platform.
For instance, under the conventional supply chain paradigm, a provider must create a shortage list, email it to the purchaser, and then wait for a response. In contrast, the list might be sent to the buyer immediately through an automated digital structure without the need for any intermediaries. Because of this, the purchaser could make a decision much more quickly.
With the aid of the intelligent digital supply chain, businesses can quickly analyze and align new products with desired supply chain strategies, detect & manage risks early in the product’s lifetime, and identify end-of-life components. First and foremost, it will boost a company’s competitiveness by allowing more effective and timely answers to consumers’ diverse and ever-evolving demands.
Many of the necessary technologies for firms to deploy digital production models based on the expanding Industrial Internet of Things are already in place (IIoT). Supply-side data may now be generated globally by means of RFID, GPS, and wirelessly networked sensor technology and then streamed in real-time over the Cloud to all parties involved in the process, from design to manufacturing and beyond.
Despite the vast amounts of useful, real-time information that may be gleaned from this unstructured sensor data, extracting useful information is a significant difficulty. Jabil, for instance, may coordinate with as many as 17,000 suppliers who provide 700,000 unique components to 100 plants serving 250 clients worldwide. There is no way to reduce this level of complexity. However, technology and analytics allow for more effective management of the situation.
Data management is critical for handling large amounts of data
The first step in handling massive amounts of data from a supply chain is funneling it via a single management point. This makes it much easier to implement analytical rigor in setting priorities, allocating resources, spotting emergent supply difficulties, and developing corrective action plans. In a nutshell, it consolidates the company’s complex global supply chain ecosystem’s tactical and logistical operations in one place.
Afterward, the technology may use complicated event processing and cognitive analytics to speed up and refine decision-making and open up fresh avenues for collaborative innovation among all participants in its supply chain ecosystem. If computers and heuristics could proactively spot developing patterns in the rivers of data flowing in from suppliers, manufacturers, retailers, and other partners, just think of the potential benefits to the logistics industry.
Analytics may be further automated to aid in providing preemptive protection against disruptions in the supply chain. The goal of analytics is to allow a fully automated, robotically guided supply chain, much to the driverless car’s development goal. Managers will have more time to concentrate on strategic planning and problem-solving if this goal is met.
Advantages of an Adaptive Supply Chain
Intelligent digital supply chains aim to deliver real-time, end-to-end, actionable insight across inventory, logistics, and suppliers. Their operational purpose is to stay up with the ever-changing digital economy. Together with interpretable analytics, this allows for more informed choices based on concrete evidence, higher responsibility standards, and more nuanced approaches to dealing with ambiguity.
In addition, if departments can talk to one another more easily, that might be a huge boon. Historically, businesses invested heavily in R&D to create novel products and services. Conversely, the intelligent digital supply chain aggregates data from all stakeholders on a single platform to leverage insights and suggestions from multiple sources, including but not limited to upstream suppliers, external and internal design and manufacturing resources, end-consumers, and social media networks.
In theory, real-time evaluations and supplier performance data might be made more accessible and actionable via Internet-based mobile and social platforms, which are available around the clock. With their extensive ties to other networks, platforms like this can provide a dynamic alternative to the conventional, linear supply chain. As a result, the supply side has almost no delay, while the demand side can better anticipate and fulfill orders.
The Digital Supply Chain of the Future: Smart and Connected
As part of a larger trend toward the company of the future, the intelligent digital supply chain aims to optimize efficiency by making the most of what resources are now available. More than just a few well chosen digital technologies are required to support these changes. Instead, the goal is to create a unified platform where various supply chains technologies, such as the IIoT, mobile and social networks, and cognitive computing, can easily access and manage.
The digital revolution is only getting started, and with new technologies come even more opportunities. Blockchain technology, which supports the digital bitcoin currency, has many potential applications beyond digital money. It may be used, for instance, to record consecutive transactions that monitor the movement of assets across supply chains.
The end-to-end supply chain solutions of today are on the cusp of a revolutionary reimagining of their structure and capabilities after decades of incremental improvement. Similarly, conventional manufacturers that effectively adopt this strategy will undergo a sea change.