2. More Focus on Customer Demands
Technology advancements allow for massive amounts of data and related insights. Previous forecasting strategies used past buying trends and historical data. However, past data might not reflect current demands, limiting organizations' ability to respond to sudden changes.
Digital options help businesses anticipate and respond to customer demands. For example, tools with implanted sensors can collect and report data from surrounding locations. Another example is intelligent data analysis, which uses advanced forecasting to recommend replenishment strategies. These predictive technologies combine historical data and current market conditions to generate more reliable recommendations.
3. Digital Thread Creation
The digital thread is a communication structure that shares information from all data users in the supply chain. It connects systems and data, integrating all workflows and users. Enhanced data flows help supply chains become more responsive. Sudden changes in manufacturing, distribution or other product areas require agile responses. The more data you have, the more prepared you are to resolve these issues.
This digital thread between your business, your suppliers and your consumers empowers your organization to become an integrated supply chain. The enhanced integration often lets organizations collaborate more closely, potentially increasing efficiency and improving relationships.
4. Improved Collaboration
The integrated supply chain creates new levels of visibility and data sharing. Constant, omnidirectional communication gives insight into inventory conditions, product availability, shipping statuses and more. Supply chain organizations can take future-focused approaches that predict demand changes before they occur.
With end-to-end views, you can access data across all business systems. Company-wide data synthesis allows for deeper analysis than a single department. As you improve productivity and forecasting, your suppliers and consumers reap the benefits, too.
5. Enhanced Ability to Meet Customer Needs
Many companies reevaluate their sales and distribution techniques as customers change their buying behaviors. Modern consumers want rapid and accurate orders, placing extreme demands on supply chains. Supply chain departments like logistics and order fulfillment are expected to work at top speeds to meet these demands and improve retention.
In response, many organizations are shifting to leaner warehousing methods and increased eCommerce presence. Some business-to-business (B2B) organizations may decide to shift to selling direct-to-consumer (DTC) and leverage retailers’ strategies for improving their digital customer service capabilities.
This strategy includes creating digital order forms and online storefronts, allowing for remote communication with customers. By leveraging virtual or augmented reality tools, businesses can even offer simulations of facility tours and showcase new products or service offerings.
6. Reduced Cyber Risks
Digital transformation creates more opportunities for innovation and collaboration. However, increased reliance on online tools provides more opportunities for modern cyberattacks. Malicious attackers target vulnerabilities in third-party applications, which can provide access to company systems. The more technology you have, the more security gaps can occur.
Cybercriminals might also exploit suppliers or consumers. These attacks can cause reputational damage, lost customers and reduced profits. As organizations develop their supplier relationships, cybersecurity should be an essential point of discussion.
Examples of Digital Transformation in the Supply Chain
Many global companies adopted digital tools and strategies to remain competitive and proactive. Here are notable examples of digital transformation in the supply chain:
1. Unified Platforms
Digital transformations often begin with unified technology that connects disparate applications and upgrades outdated systems. These end-to-end platforms boost visibility across every supply chain stage, from inventory management to final distribution. By linking systems, you reduce bottlenecks and improve efficiency during various tasks.
You can implement a wide range of digital workplace solutions that update operational supply chain processes. The platforms let you address specific areas of improvement. For instance, you might want to improve productivity in your supply chain department. You could invest in productivity-based tools that offer cloud-based file sharing, mobility options or automation tools that encourage efficiency.
Or, managers might need to enhance inventory management. Digital options like vendor managed inventory (VMI) provide crucial insight into product movements and supplier communications. They also use forecasting tools to anticipate customer demands and adapt stocking approaches as necessary.
2. Automation and Artificial Intelligence
Automation has a significant role in digital transformation. Automated technologies can complete repetitive or manual tasks with little to no human input, letting workers prioritize higher-priority tasks. The tools eliminate the possibility of human error, which can improve accuracy when working with data.
Artificial intelligence and other automated tools can assist with every area of supply chain management, from forecasting buying trends to tracing product movements. You can automate data collection and invoice processing, ensuring your supply chain uses the correct numbers in purchases.