Supply chain strategies for Digital transformation

We often come across conversations revolving around technology disruption among various goods and services. Technology disruption in supply chain on technology is not a new phenomenon and has been around for some time now, although limited to documentation. Since the very definition of disruption indicates key disturbances, supply chain industry did not want to take many chances to digitize the entire chain, particularly the logistics part, fearing disturbances that would entail rigorous modification to revive the normal processes.

transportation services

Based on McKinsey survey, the average supply chain digitization levels are around 43% which is the least among any other sector scrutinized by them. While the results do not confirm that supply chain is not undertaking digital transformation, it is not optimum in logistics services and warehousing.

Digital transformation and automation is happening along the supply chain in the following pattern:

  • Warehouses are using robotics to move goods for transportation
  • Factories are automating manufacturing process
  • Predicting customer demand is one of the Artificial Intelligence module on supply chain
  • Trucks are “Track and Trace” enabled
  • Deliveries can be monitored by the customers at real time

Across supply chain industry, technologies like Artificial Intelligence and Machine Learning, Automation, Data Analytics and Robotics are the current tools in usage to integrate into daily business transactions. This is helping organizations to create process efficiencies, thus helping them evolve an exceptionally powerful mechanism to provide a delightful customer experience.

The market challenges that the organizations face are:

  • Higher expectations: Driven by the higher levels of internet penetration, consumers now want quick and cheap deliveries for an array of products that is ever expanding. You find such demands are leading to agreements that dictate the order fulfillment improvements. For example: Amazon has a premium account that commits the next day delivery, although for a premium charge. Such e-commerce players like Flipkart too are faced with escalating expectation levels form their customers
  • Manpower challenges: Rising manpower cost and unavailability of skilled labor is the other challenge faced by the industry since manpower accounts for nearly 80% of the total supply chain process
  • Operation hours: The unplanned operations can sabotage the profitability of an organization. The uptime is critical for unit economics and each period of downtime results in idle workforce that can have a ripple effect across the supply chain disturbing the logistics and timely delivery.

Emerging technologies mentioned above are already being applied by organizations that are digitally advanced. As mentioned, Amazon and Flipkart are pioneers in warehouse automation with the effective use of robotics in their warehouse premises. Drones might be the future of delivery of automation by these companies giving further impetus to technology in supply chain.

Few benefits of digitizing supply chain:

  • Forecasting by predictive analytics: Digitally advanced platforms like Trukor can predict the demand to fill the supply line even before the customers place orders to speed up the fulfillment.
  • Flexibility by digitization: Organizations adopt new capabilities by digitizing their supply chain that allows them to be more flexible and responsive. Business can obtain supply chain services on demand on digitized platforms and customers the customers can switch orders on demand that are already processed.
  • Personalized supply chain: Technology can make supply chain personalized to improve customer experience thereby guaranteeing customer delight on every transaction

While logistics may be slightly lagging in terms of digitization in the entire supply chain, digitization of supply chains will make the organizations more accurate and efficient.

Automated supply chains will reshape end-to-end:

  • By improving customer experiences
  • By reshaping business collaboration
  • By taking accurate decision for effective fulfillment

Eventually, the future in supply chain is vastly digital and would be completely different from the current supply chain practices. Digital transformation of supply chain is absolutely vital for the organizations to stay relevant in this digital age and do not hesitate to invest in technology to maintain efficiency and accuracy throughout the chain.