Digital transformation is the revolutionary new era in the supply chain, bringing suppliers and customers together through new platforms. This is a time of increased flexibility, enhanced responsiveness and improved visibility across the supply chain. Digital transformation is integral for future proofing supply chains – and here’s how it can be achieved.
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Methods to achieve digital transformation

For all the effort that companies devote to improving the performance of their supply chains, relatively few have unlocked the full potential of digital technologies.

- McKinsey

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The traditional organizational boundaries associated with supply chain are being fast erased as the fourth industrial revolution heralds a new era of digital transformation. The arrival of big data and data analytics, the introduction of automation, artificial intelligence (AI) and artificial reality (AR) – have all brought about a drastic overhaul of day-to-day operations. While initially disruptive, particularly to those organizations reluctant to evolve, digital transformation brings with it a host of innovative solutions to drive productivity. 

For those dealing with supply chain management, here’s a look at five key ways to achieve digital transformation this year. 
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Assess the current supply chain

The first step is always to go over the existing supply chain as a solid base from which to work. Once the supply chain manager has a more comprehensive overview of the supply chain’s technical capabilities, it’s easier to identify areas of weakness or gaps that must be addressed. When reviewing, it’s important to focus on the following key areas for digital transformation:

• Data collection and analysis: Consider whether sufficient quality data is being generated, collected and stored for future use. It’s also important to review whether the organization has the technical capabilities to then use the stored data as a way to drive supply chain productivity.
• Skills: Look at the existing staff contingent 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. 
• Equipment: Assess the 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. 

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Create a digital transformation roadmap

More than 50% of organizations have not yet actively started to build a roadmap for supply chain digital transformation.

- Gartner

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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. It’s necessary to use the analysis mentioned in the first step as a way to implement strategies that address performance issues and challenges existing in the business. Otherwise, these challenges will simply be compounded going forward. 

Implement smart logistics

Once the opportunities for digitalisation have been identified, it’s time to start implementation by incorporating reliable software that is industry specific. One of the biggest benefits of digital transformation in the supply chain is the visibility component which allows for real-time tracking of goods. This provides insight into the transportation performance and delivery route inefficiencies. Some of the technologies available today include:

• Automated warehousing
• Cargo tracking 
• Smart labels
• Robotic process automation
• Remote fleet management 
• Self-driving trucks
• Supply chain security
• Supply chain control towers
• Robotic Automated Storage and Retrieval
• Cloud-based GPS asset tracking 

Open communication 

Improving supply-chain performance isn’t just a matter of buying and installing new systems or software. Supply-chain management is a collaborative endeavor. 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.

- McKinsey

Embracing digital transformation in the supply chain can’t be effective without constant information sharing and inter-company visibility. Through the implementation of a digital thread, businesses benefit from a communication framework for sharing information, integrating workflows and people. This makes the entire supply chain that much more responsive, maintaining constant contact between suppliers and customers to improve efficiencies and lower costs.
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Filling in the information black holes that exist in most companies end to end supply chains would be a digital transformation project that is operating at a much higher level of maturity. This means connecting with suppliers, customers, and key supply chain partners up and down multiple tiers of a company’s extended supply chain.

- Forbes

Consider cyber risk

It’s important to remember that with any change, there is an increased chance for risk. When it comes to digital transformation in the supply chain, the risk comes in the form of cyber-crime. The problems associated with hacking activities include loss of income, loss of private personal information, and reputational damage. Fortunately, there are technologies dedicated to protecting supply chain processes in the digital realm. It’s simply about working with the right software suppliers to meet the organization’s digital goals. 

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Why is digital transformation important in the supply chain?

The digitization of the supply chain promises to reduce inefficiencies and lower costs while improving flexibility—critical ingredients for boosting resiliency.

- BDO

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Data-driven supply chain management: Traditional methods of forecasting based on historical demand levels aren’t sustainable. Digital transformation and the arrival of sensor technologies allow for the analysis of vast amounts of useful data for better forecasting and decision-making. 

Improved customer experience: The improved supply chain operations mean increased speed from warehousing to shipping. Modern consumers have little tolerance for delays which is why digitisation is leading to happier customers.  

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Key take-aways

Investment in the digital transformation of the supply chain allows businesses to harness and scale the technology, bringing about business growth and mitigating risks. This is a necessary step in meeting modern demands and improving performance, but it requires a comprehensive approach to ensure the relevant support systems are in place. Digital transformation means different things for different companies, but whether it’s leveraging data, incorporating robotics or applying AI, it’s necessary to work with the right software supplier to get the right fit.