5 must-follow steps for a successful supply chain digital transformation
Assess your current digital maturity of your supply chain
Amidst such changing times, more supply chain leaders are searching for the secret to ensuring a successful and efficient supply chain. While it seems like everyone is adopting a new digital transformation, a shocking 30% of organizations only realize success in the process. So, what’s missing? More important, what can you do to ensure your supply chain’s digital transformation success? Consider these five proven steps to ensure a successful digital transformation of your supply chain and set your supply chain up for future success.
Data. Consider whether sufficient data is being generated, collected, and stored for driving business decisions. It’s also important to review whether the organization has the technical capabilities to use the data to drive supply chain productivity and efficiencies.
Skills. Look at the existing staff and analyze whether there is sufficient digital talent available to assist in transforming the supply chain. Consider aspects such as ongoing support, opportunities for innovation and digital training.
Systems and technology. Assess the currently used hardware and software systems of the organization and whether they have the capabilities required for digital transformation.
Processes. Check over the existing supply chain processes, how they’re defined and how easily understood they are by the staff. If there are areas of disconnect, or if members of your team are working insufficiently, address them.
Create a digital transformation roadmap
Once the supply chain has been fully assessed, it’s time to create the digital transformation roadmap for the organization’s future. This will have to look several years into the future whereby operational improvements and digital solutions – leveraging existing capabilities – can be implemented. While it may sound tedious, this step is essential and is unfortunately skipped by many supply chain leaders. Gartner found that, “more than 50% of organizations have not yet actively started to build a roadmap for supply chain digital transformation”. It’s necessary to use the analysis mentioned in the first step to implement strategies that address performance issues and challenges existing in your supply chain. Otherwise, these challenges will simply be compounded going forward.
Implement modern logistics and supply chain technologies
Once the opportunities for digitalization have been identified, it’s time to start implementation by leveraging and deploying modern technologies. One of the biggest benefits of digital transformation in your supply chain is the visibility component that allows for real-time tracking of goods, costs, inventory, performance, and CO2 emissions. Some of the technologies available today include:
- Real-time cargo tracking that provides the location of your transport vehicles and shipments at that very moment.
- Smart labels utilize technology that extends the functionalities of labels traditionally used print methods. They can come in a variety of forms, such as QR codes, RFID tags and more.
- Digital supply chain control towers are tailor made dashboards that track data, key business metrics, and processes across your supply chain.
- Digital supply chain platforms reimagine your global supply chain and manage your network with end-to-end visibility, acting as a single source of truth.
Manage change and foster open communication
Embracing digital transformation in the supply chain can’t be effective without proper change management, constant information sharing and inter-company visibility. As McKinsey states, “supply-chain management is a collaborative endeavour. Most efforts to improve supply chain performance should therefore involve changes to the ways that employees and teams share information, consider problems and opportunities, reach decisions, and carry out actions they agree on.” This makes the entire supply chain that much more responsive, maintaining constant contact between suppliers and customers to improve efficiencies and lower costs.
By fostering open lines of communication, it ultimately addresses the issue that many companies struggle with: information black holes. Addressing and overcoming these information black holes results in operating at a higher maturity level.
Manage and mitigate risks that hinder a successful digital transformation
It’s important to remember that with any change, there is an increased chance for risk. When it comes to digital transformation in your supply chain, the risk comes in various forms, both internally, such as shifting management priorities or technological failures, and externally, such geopolitical strains or pandemics. To manage and mitigate all risks, you must align your organization’s digital transformation plan and develop a digital architecture that is equipped with the tools necessary to meet all your digital needs. While many companies stop their risk management efforts at cybersecurity, the work is hardly finished there. Creating a risk portfolio is key, underscoring the real challenges at hand and what could arise in the future. Once this information is laid out, your risks become much easier to manage.
Investment in the digital transformation of global supply chains allows companies to engage in faster, more informed decision making, better mitigate risks, improve customer service, and run overall operations much more efficiently. It is a necessary change in meeting increasing customer demands and improving performance, but it requires a comprehensive approach to ensure success the first time around and doesn’t turn into a never ending and money consuming effort. Digital transformation can mean different things for different companies depending on the maturity level, but whether it’s leveraging data, deploying modern technologies or applying AI, you need to follow certain critical steps to ensure success and achieve expected results.