Why is the digitisation of supply chain mission-critical in current times?

World over, businesses are in a state of flux as they struggle to come to grips with the unprecedented disruption wrought by the pandemic, the need for bringing about a radical change and creating an agile supply chain has assumed utmost importance and urgency.

The impact of COVID-19 is being felt upon our day to day lives and businesses across the world. Since different regions are disconnected or discreetly connected for transport, there is immense unpredictability or radical changes in terms of supply chain management.

This makes the businesses concerned about being able to meet their contractual obligations on time. The current situation highlights the important yet missing dots in the existing supply chains including the lack of real-time tracking, visibility, traceability, transparency, and lack of diversification- vulnerabilities.

To address these challenges, the first step is to move away from traditional approaches to supply chain management and embrace digitisation. There are several (read: almost all) functions of the supply chain that have ample scope for transformation through digitisation.

Be it creating cost sheets, vendor management, building supply chain disruption and backup scenarios, tracking of shipments and last-mile delivery, quality testing and pilferage control, etc., there is substantial proof of how digitisation can bring a positive change to the supply chain.

This change is not only important for current but also for post-COVID-19 times.

How digitization benefits supply chain

Enhanced efficiency

Digitisation helps in automation of critical yet iterative functions of supply chain management such as refill orders, invoice generation, follow-ups, maintaining vendor/client database, and so on. This helps in reallocating key resources to manage other aspects of the supply chain. As a result, efficiency grows manifold.

Effective tracking

Technologies such as geo-fencing, geo-tagging, smart sensors, etc. play a key role in providing real-time tracking for in-transit shipments. This brings tremendous predictability throughout the chain as customers stay on top of the delivery schedule and plan their operations accordingly.

Deeper collaboration

With the proliferation of connected devices, manufacturers can keep a tab of their entire supply chain in real-time, in collaboration with vendors and distributors. This collaboration also helps in understanding the key concerns throughout the chain and addressing them for further improvement.

Predictive analysis for improved decision making

Digitisation helps businesses generate, collate, and assess data from multiple points to understand how further improvements can be brought to the supply chain. The insights from this exercise will help in creating adaptable business processes that provide flexibility to handle varied demand situations and optimise the operational cost.

However, each business needs to identify its own specific areas that need digitisation on a priority basis. Once this identification is done, it is easy to put an extensive digitisation strategy in place and roll out the change.

Can there be some roadblocks towards the digitisation of the supply chain?

The start of digitising the supply chain could have some upfront cost and time requirement. However, the mid- to long-term rewards make it worthwhile.

Whilst finding the correct technologies and strategies is critical to success, it is even more important to find the right team that can implement a crucial change seamlessly.

The shift revolutionises from the ground up. So, the employees need to be prepared and onboarded bearing in mind a radical culture shift.

Another important concern in the hyper-digitised world is cybersecurity. Taking action to protect the business and network from cyber threats should be an important priority when looking to innovate and introducing new technologies.

The road ahead

While the world will take some time to recover from the aftermath of COVID-19, few things will change forever (and for good). The phenomenon of supply chain digitisation is one such thing.

We can expect more businesses to understand the importance of creating an agile supply chain and operate with a lean approach in order to achieve sustained success. While we have already seen some positive momentum in this direction as more businesses opt for a digitised supply chain, there will be ripple effects all around the world.

(Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the views of YourStory.)


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