Leading enterprises are increasingly looking out for robust supply chain platforms that can evolve at lightning speed.

While the digitalization wave has transformed many sectors, it’s still in its early stages for supply chain businesses. One of the main reasons to embrace the digital supply chain is that it can help overcome functional silos. It can improve performance by uncovering the untapped potential of existing resources.

But, will embracing the digital supply chain give your business a competitive edge over others? The answer is Yes. If implemented correctly, the digitalization efforts can bring in high levels of efficiency and provide higher ROI.

Adoption of Digital Technology in Supply Chain

Supply chain inefficiencies cost retailers over $1 trillion in the context of lost sales each year. It is interesting to note that the supply chain is rapidly adopted across marketing, sales, and customer experience.

adoption of digital tech in supply chain

Let’s look at a more recent reality. Lately, the product companies have experienced disruptions during the global pandemic, which reminds us how critical the supply chain is to operate a business effectively.

When it comes to the adoption of digital technology, here are some interesting insights:

  • A 2017 McKinsey report noted that companies that aggressively digitized their supply chains could expect to boost annual growth of earnings before interest and taxes by 3.2 percent. Now, that’s food for thought!
  • Here’s a more recent development. When it comes to the widespread adoption of digital technologies, the North American transportation supply chain and logistics industry saw an increase in 2020.
  • Plus, predictive analytics proved beneficial in ensuring efficiency with on-demand deliveries. It also extended to offering end-to-end visibility of supply chains.

So, How Can Businesses Get A Competitive Advantage?

One can try to boost cloud-based technologies. It is good to apply them to operations. The initiative can improve workflow productivity and create opportunities for competitive differentiation.

To add to the endeavors, also try robotics and automation. The technology can fortify warehouses with optimized levels of productivity and improved customer service.

In short, the success of digital transformation in the supply chain lies in the implementation of new technologies. The measures can speed up operations, back-office productivity, sales, and customer service.

But the adoption of emerging technologies still faces significant challenges.

It is prudent to treat challenges as opportunities to reduce costs and improve operational efficiencies.

The good part for supply chain leaders – moving supply chains from adoption to digital transformation can boost bottom-line profits.

Why Supply Chains Need Digital Transformation?

The digital supply chain transformation process is more than replacing manual, paper-and-pencil processes with digital data.

It is, in essence, a project that needs to operate at a much higher level of maturity. For the supply chain leaders ready to join the digital bandwagon, here’s why the supply chain needs digital transformation.

Why Supply Chains Need Digital Transformation

The supply chains are getting increasingly volatile. Digitalization is changing the face of the business landscape, transforming global supply chains.

Thus, it is necessary to keep with the latest trends of the global supply chain, meeting customer demands effectively.

2. Meeting Customer Demands

Customers have become more demanding than ever. They look out for doorstep deliveries, customer-centric processes, and individualized products.

It is necessary to design the changes to have full visibility across the end-to-end supply chains.

Continuous R&D, leveraging technologies, and Industry 4.0 initiatives can efficiently help understand customer pockets and cater to their needs.

It can boost productivity and utilization throughput across the supply chain. Another facet is customers becoming more aware of environmental impact.

So, it is vital to drive a sustainable supply chain where the products are ethically sourced, are biodegradable, and use minimal packaging material.

3. Leveraging Technology to Digitize Supply Chain Processes

The perks of emerging technologies can empower value-added activities and services. Various technologies are available today, such as machine learning, artificial intelligence, and more.

The challenge is to leverage technologies in the supply chain to drive the digital supply chain and digitize the supply chain processes.

For example, supply chain executives can use predictive analytics to focus on value-added activities, whereas blockchain to secure the data.

Another good example is the use of robotics in warehouses, in manufacturing that can replace repetitive tasks.

4. Driving Innovation with Industry 4.0

Industry 4.0 can help to move from transactional-based systems to data-driven processes, facilitating decision-making.

Today, a smart factory has its processes automated and streamlined. The role of R&D is more critical than ever, which can help improve the maintenance, and leverage data in different roles and functions where IT/OT convergence occurs.

5. Connecting and Collaborating

For an extended supply chain, it will help connect to trading partners digitally. Markets such as Supply Chain Collaboration Networks (SCCN) have emerged to facilitate the initiative.

A market research study from the ARC Advisory Group has highlighted that the market garners over $3 billion in annual revenues and is growing at a double-digit rate.

Furthermore, a supply chain collaboration network works as a collaborative solution for supply chain processes built on a public cloud, many-to-many architecture which supports a community of trading partners.

Plus, one can look at the collaborating network market comprising companies with EDI VAN solutions – IBM, Descartes, TrueCommerce, OpenText, and more. It helps to connect and collaborate with networks as they offer distinctive advantages. The perks include:

  • Communication and partner management
  • Benchmarking analytics that leverages the network data, and
  • The ability to easily access and leverage supply chain third-party data stored in the hub

How Embracing Digital Supply Chain Can Give Competitive Advantage?

The rise of innovations and Industry 4.0 are excellent opportunities for positioning your firm for lasting competitive advantage.

Let’s explore some critical approaches to consider on your digital supply chain journey forward.

1. Leveraging Industry 4.0

The fourth industrial revolution, aka Industry 4.0, is poised to accelerate digital transformation. The revolution brings enormous opportunities to businesses.

According to a survey, the UK and German companies understand the importance of embracing Industry 4.0 principles, and 79% claim to be partly digitized.

Now, that’s huge! The figures also show that organizations are looking ahead in their journeys and are ready for an end-to-end digitalized ecosystem throughout their supply chains. It is up to the supply chain leaders to augment Industry 4.0 to see winning results.

2. Contributing to a Sustainable Supply Chain

Today, ethical business practices need to be a core tenet of business strategies. When it is embedded in the organizational culture, it can add immense economic value.

According to research, it was observed that over 62% of decision-makers consider ethical consumption as a priority. However, a significant number are still not putting ethical business practices at the heart of processes and operations.

Here’s another fascinating insight. A 2016 MIT Sloan report highlighted that 60% of investment firm board members were willing to divest from companies with a poor sustainability footprint.

It is quite simple, to remain competitive, it is vital to implement sustainability practices.

3. Complying with Legislation

Today, supply chain legislation and business reforms are more than a necessity.

For example, large companies across the EU must report on their environmental and social impacts with the introduction of the EU Directive on the Disclosure on Non-Financial and Diversity Information (Directive 2014/95/EU).

There is a growing awareness of compliances, and a report from KPMG dating around 2011 showed that 95% of the world’s biggest companies disclosed sustainability performance information. Furthermore, according to research, 83% of respondents cite new legislation as an increasing driver for change.

Businesses face significant external pressure to do the right thing, and complying with legislation is one of the best practices to adopt.

4. Comprehending People, Processes, and Technology

The key to successful digitalization of the supply chain is an in-depth understanding of available technologies.

As they are effectively applied throughout the value chain, one can expect to see brilliant results. It is critical to understand the volatile business and technology landscape and blend the right combination of people, processes, and data to drive financial return and lasting competitive advantage.

5. Building Robust Digital Supply Chain Strategies

Businesses today need to integrate their digital initiatives with a robust supply chain strategy to generate long-term value.

Supply chain leaders can look at the in-depth analysis that can highlight value creation potential in the existing supply chain. It is critical to study pain points.

For example, some pain points could include incomplete or broken processes, low visibility, local optimization instead of a global one, and more. Plus, it is significant to study industry best practices. An ideal blend of these pain points and best practices can bring out an optimal Digital Operating Model.

6. Integrating Supply Chain Performance Measurement

When one looks at a Digital Operating Model, one can trace the use of Web 2.0 technologies in every order or transaction. It is critical to look at augmenting tagging technologies, including barcodes and RFID, to offer real-time data feeds for any physical movements.

Plus, virtualizing data centers can help bring in transparency of stored data for multi-function and multi-location supply chains.

A strategic blend of this operational data with financial information can facilitate better decision-making, giving you a winning competitive edge.

7. Working on Integrated Execution

It is great to have a design that can give employees end-to-end processes, equipping them with the information they need for straight-through processing.

For example, ABB built an agile supply chain through technology architecture in-line with its integrated global supplier strategy, with its suppliers and other value chain functions at multiple locations.

The organization implemented standard processes worldwide for the relevant business domains by deploying various shared global applications.

Plus, they redesigned processes to improve flexibility to respond to uncertainty and build a dynamic supply chain instead of a static one. The initiatives helped in fulfilling the interests of multiple players.

Wrapping Up

The final step is to develop a road map looking years ahead. It is pertinent to identify operational improvements, possible changes, analyze root-causes, and underline performance shortfalls. Once you are ready with the potential changes, you can prioritize and work on the complexities of digital transformations.

It is promising to use technologies and reap more incredible benefits. A comprehensive vision for the future of your supply chains can improve supply-chain performance and transform the operations and processes.

With a holistic approach, supply chain leaders stand a better chance of capturing the optimal value that digital technology offers. All you need to do: keep digital transformation at the top of your agenda, and embrace digital change.

Achieve Top-Line Growth Embracing the Digital Supply Chain with Imaginovation

To get the best results from digital transformation in the supply chain, you must partner with a technology provider who can walk you through the transformation process.

If you need to digitalize and transform your supply chain, talk to us. We are an award-winning web and mobile app development company in Raleigh with incredible experience accelerating and unlocking business value.


Pete Peranzo

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