We live in a digital world, so it makes sense for business owners to create and entrench more digital systems at the foundations of their businesses – particularly in the supply chain. This practice, known as supply chain digitization, comprises a wide range of solutions that can help businesses operate with more transparency, efficiency, and consistency.
So how exactly can supply chain digitization help your business and how do you get started with it?
What Is Supply Chain Digitization?
Supply chain digitization is a transformative process that replaces all your old, antiquated supply chain systems with modern, often cloud-based technological infrastructure. Technologies like computerized maintenance management systems (CMMSs), virtual storeroom management solutions, and remote condition monitoring are combined in a suite of hardware and software solutions designed to facilitate better data streams, better communication, and a wider range of functionality.
Because these systems come in so many different forms, and can utilize so many different technologies, it’s hard to paint a singular picture of what the finished product of supply chain digitization looks like. But it’s almost always a massive upgrade, equipping businesses with more advanced tech that can solve any number of modern supply chain problems.
The Advantages of Supply Chain Digitization
These are some of the most important advantages of supply chain digitization to recognize:
- Overall speed and efficiency. Relying on templates and typing on a computer is much faster in producing documents than writing new ones by hand every time; that’s because the most widely adopted technological innovations are simply better in terms of speed and efficiency. Adopting more advanced supply chain technology allows you to conduct most of your operations faster and more efficiently overall.
- Sophisticated tracking. Modern supply chain solutions usually incorporate some form of sophisticated tracking, allowing you to methodically track individual items as they move through the various nodes of your supply chain. You’ll never have to worry about things going missing or delays going unnoticed again.
- Real-time data. Real-time data is arguably superior to data streams that are not real-time, by virtue of the fact that real-time data is updated constantly, giving it more immediacy and accuracy. Supply chain digitization gives you access to this real-time data, so you can make much more informed, grounded decisions on the fly.
- Data integrity and backups. Data is at the heart of your supply chain operations, so it’s important to have data integrity and ample backups, so your data is never lost, stolen, or corrupted. Better modern technology secures this.
- Easy communication and responsiveness. With better technology, you’ll gain access to better communication and greater responsiveness. It’s much easier to communicate with vendors, get answers to your questions, and resolve conflicts as they arise.
- Deeper collaboration. Similarly, supply chain digitization equips you with the potential for deeper collaboration. You’ll be able to connect to all your buyers and vendors in one centralized system – and you’ll have boundless potential for collaborating on new types of projects.
- Liberation from antiquated systems. If you’re currently relying on antiquated, legacy systems, you may have a sense of fondness and appreciation for them. But in reality, these systems are probably holding you back with countless apparent and invisible problems. Upgrading to a digitized supply chain management system liberates you from the shackles of these old technologies.
- Discovery and addressal of waste. Many supply chain systems are designed to facilitate the discovery and potential addressal of waste, including wasted energy, wasted materials, and wasted labor. You can detect inefficiencies in your supply chain much more easily – and correct them to improve your organization’s productivity and workflow.
- Future proofing. Future proofing is the process of ensuring that your infrastructure is capable of dealing with any foreseeable changes or innovations in the future. If you’re still stuck using legacy systems, adapting in the future is going to be nightmarishly difficult. But if you build scalable infrastructure now, your transitions will be much easier in the future.
Costs and Limitations
Are there any costs, limitations, or downsides associated with supply chain digitization?
The answer, as with any major business change, is yes. It costs money to secure the technology, undergo the transformation, and train and educate your employees. There are fundamental limitations to what new supply chain technology can do. And while it’s unlikely that your legacy systems can perform better than modernized, digital supply chain solutions, there may be aspects of them that you miss.
But these generally pale in comparison to the benefits of digitizing your supply chain.
If you’re still using antiquated technologies to track and manage your supply chain, it’s time to make the upgrade. The benefits are too significant to ignore – and almost any conceivable business is going to be more competitive after adopting supply chain digitization.
