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Why All Supply Chains Need A Digital Transformation

By: SEI Team


Broken links in your supply chain mean bigger bottlenecks — here’s how a digital transformation can fix that.

When it comes to supply chain logistics, the path from Point A to Point B is never straightforward — but if your business still relies on manual processes to manage the delivery of products from warehouses to customers, it can be hard to tell. This lack of transparency is costing supply chain companies time, money, and their ability to adapt to today’s evolving logistics landscape.

Think about it: customers nowadays expect to know where their packages are at all times and when to expect them. If they aren’t given this familiar sense of visibility that e-commerce giants like Amazon and FedEx already provide them, it can erode trust in your business and generate dissatisfaction. Besides meeting customer expectations, transparency also enables your entire supply chain to be streamlined, as issues can be quickly pinpointed and resolved before they cause a backlog that affects all parties involved.

The key to keeping your supply chain efficient and consumer-friendly? A comprehensive supply chain digital transformation. But what does this mean, and how can your organization implement what can be a hefty process overhaul without causing any disruption to operations? Let’s delve into the details.

The Future of Supply Chains

The concept of a supply chain is pretty self-explanatory. In a traditional model, raw materials are sourced, manufactured into goods, and transported from a place of origin to its final destination, with intermediaries sometimes used to keep products moving along. The focus here is on efficiency, which means the products sold in this model often go through minimal iterations to keep production and delivery times consistent and more predictable. Overall, the process is supposed to be sequential and straightforward. 

However, roadblocks like bad weather, traffic jams, malfunctioning equipment, and other external factors can quickly complicate the process or render it inoperable. Recently, global supply chain disruptions, such as natural disasters and the COVID-19 pandemic, have exposed vulnerabilities in traditional supply chains, leading to a surge of new strategies to help organizations build resilience and agility to navigate unexpected disruptions. For example, instead of relying on a linear framework, some companies are branching out and diversifying suppliers, switching over to nearshoring, and adopting digital solutions to automate repetitive tasks and generate supply chain data analytics for better decision making.

Plus, with the advent of AI, the Internet of Things (IoT), and other highly intelligent technologies, the traditional supply chain model may no longer be enough to support the interconnected and collaborative environments most businesses find themselves in today. With a digital transformation, supply chain businesses can better adapt to the industry amidst the changes, while transferring operations to the same digital space consumers are already present in.

Understanding Digital Transformation

A digital transformation uses technology to reimagine and optimize internal processes and customer experiences. In logistics and supply chain applications, this typically involves the integration of advanced digital solutions to improve how goods are produced, distributed, and delivered. However, the important part of a digital transformation is not just evolving manual processes to automated programs — it’s ensuring that all solutions work cohesively with each other to provide a more user-friendly and harmonious management process.

For a digital transformation to work effectively across a supply chain, several key components are needed, including:

  • Data Analytics: Supply chains generate vast amounts of data, from inventory levels and transportation routes to customer preferences and demand patterns. Advanced analytics and big data technologies enable organizations to extract valuable insights from this data. For example, predictive analytics can help forecast demand more accurately, optimize inventory levels, and identify potential disruptions before they occur.
  • Internet of Things (IoT): IoT devices, like sensors and RFID tags, should be deployed throughout the supply chain to collect real-time data on the location, condition, and performance of assets and products. Without these nodes, it would be impossible to gain visibility into the health and efficiency of a supply chain.
  • Automation: Robotic process automation (RPA), automated alerts, and intelligent document processing — these are just a few features available that help streamline routine tasks while reducing human error, which is useful for highly complex, multinational supply chains.
  • Artificial Intelligence (AI): Machine learning algorithms take data analytics to the next level, analyzing historical data to make more accurate predictions and dynamically adjust inventory levels. AI-powered chatbots and virtual assistants also help tend to the customer service side of operations, as well as order management.
  • Blockchain: This type of database is sequential, keeping an ongoing log of activity as transaction data is collected. This makes it a breeze to track down the origin and movement of products, especially for time-sensitive goods like food and pharmaceuticals.
  • Cloud Computing: By storing and sharing data and applications on a cloud server, suppliers, manufacturers, logistics providers, and customers can all collaborate with each other better and in real-time.

In order to embed these features in a way that benefits your supply chain business, you’ll need to develop a strategic approach that aligns these investments with your organization’s specific business objectives and a commitment to continuous innovation. This way, your company is better positioned to make the switch to digital as smoothly as possible while adapting to evolving needs. The best place to start? Understand your analytics.

Why Supply Chain Analytics Matter

You can’t have transparency without data. Supply chain data analytics give you the tidbits of information your organization needs to piece together the entire picture of your operation. By harnessing the power of data, organizations can make better decisions in real-time, leading to several significant benefits.

The first benefit is that supply chain analytics tools lend transparency where it matters most: between every checkpoint. It’s vital to know about inventory levels, supplier delays, and potential bottlenecks at any given time to prevent them from accumulating. Additionally, supply chain analytics optimize routes, minimize transportation costs, and make warehouse operations more efficient. More data allows for smarter production planning and procurement, helping companies respond quickly to any change in market demand. And for the customer, this means a highly convenient and seamless experience.

What Is Big Data Analytics?

Supply chains are naturally complex. There are many moving parts that must function properly for a product to be manufactured, transported, and delivered to a customer’s doorstep on time. It’s why you need eyes on everything. Big data analytics helps businesses examine large volumes of data collected along the journey of a product to uncover hidden patterns, correlations, and trends that are simply too unwieldy to do manually.

Integrating big data analytics into your supply chain management strategy involves adopting tools that allow organizations to:

  • Improve forecasting accuracy
  • Make informed decisions about inventory replenishment and distribution
  • Identify risks and opportunities
  • Shorten delivery times through optimization
  • Maintain product quality control
  • Tailor goods to meet consumer expectations
  • Maintain equipment before it breaks down

Your business is going to process and record loads of data, so use it to your advantage to ensure that your supply chain operations remain resilient.

Benefits of Digital Transformation in Supply Chains

The main purpose of a digital transformation is to bring convenience, accountability, and scalability to existing processes, but in a supply chain environment, it offers so much more. One of the primary advantages of digitizing operations is the substantial improvement in efficiency and productivity. Real-time data analytics, intelligent software, and automation translate into faster order fulfillment, reduced lead times, and increased productivity.

It also saves your business money — predictive technology and proactive forecasting address issues before they arise, preventing costly needs and downtime. As a result, your business can have financial stability and allocate resources more strategically, ultimately contributing to sustainable growth and resilience.

In essence, the savings achieved through digital transformation create a ripple effect, positively impacting both internal processes and the end consumer experience. A streamlined and efficient supply chain not only saves money but also plays a pivotal role in enhancing customer satisfaction, which is paramount to your business’s continued success.

Optimize Your Supply Chain with SEI

A supply chain digital transformation should be done with a dedicated team. At SEI, we empower your business to upgrade your supply chain management strategy through process improvement, advanced analytics, and data solutions specifically curated to align with your goals and operational needs. Whether it’s roadmapping, finding ways to integrate AI, or standardizing processes for faster time-to-market and delivery, our experienced supply chain consultants are well-versed in what makes supply chains unbreakable.

We understand that a top-down approach requires company-wide insight into available resources, areas of strength, and pain points to minimize friction while maximizing potential. That’s why we work alongside teams to gain momentum from stakeholders, develop a data-driven strategy that works, and implement it to fruition. 

Want to learn more about how we can apply a digital transformation to your supply chain business? Contact us today.