• Kwixand Team

Supply Chain Digital Transformation: Why It Matters for Your Organization

Supply chain digital transformation can drive growth, mitigate risk, and optimize costs. Here's what you need to know.

Supply Chain Digital Transformation:

In the face of unpredictability and chronic disruptions, an agile supply chain is vital for manufacturing businesses today. Businesses need to enhance their end-to-end visibility, improve flexibility, and create resiliency. However, companies still using rigid ERP or legacy standalone tools or systems find that it hampers their ability to proactively plan for demand and supply shocks and pivot quickly as needed.


It's more critical than ever to digitize your supply chain processes. In this article, we'll highlight the importance of investing in digital transformation for your supply chain, along with steps to get you started.

What is Supply Chain Digital Transformation?

Digital transformation in the supply chain refers to the shift in supply chain management, in which companies use advanced digital technologies to build a connected supply chain, link people and processes across the supply chain, and integrate data across organizations, systems, and locations. This process creates a more transparent, efficient, and agile supply chain, enabling customers to receive orders faster while also controlling the costs of all parties involved. Digitized supply networks use real-time connectivity to offer greater visibility to supply chain processes, enable smooth communication and collaboration across partners, and support smart supply chain optimization.


The key purpose of supply chain digital transformation is to enhance the customer experience by getting hold of barriers between providers and customers through better communication channels, real-time visibility into the inventory levels, and so on. Advanced track and trace solutions, cloud-based digital network platforms, and multi-enterprise work management tools are some of the many technologies used for supply chain digitization.


Supply Chain Digital Transformation Benefits


The digital revolution redefines how global supply chains operate and deliver value. Technologies, connectivity, data, and analytics are at the heart of digital supply chain management. All these elements, in tandem, provide many advantages, especially when embraced by each partner along the value chain. Here are the top benefits of a digitized supply chain.


✅ Advanced Supply Chain Planning


In a traditional supply chain, rectifying possible errors and anticipating their likely impact can be time-taking and unreliable. In a digital supply chain, shared and updated quality data enables firms to predict problems and handle them fast before the issue becomes serious. Furthermore, digital supply chain management makes planning and handling every supply chain workflow easier, from sourcing and procurement to conversion and inventory and logistics management.


✅ Organizational Flexibility


The larger the business, the more complex the logistics service management and shipping methods are. With a digital operating model, businesses get flexibility in each process, reducing manual delays or inconsistencies as a result. Management has a greater choice regarding the centralization required to support specialization or minimize process costs, given different productivity levels across locations. When everything is digitized, companies will experience increased transportation efficiency and better customer service through redesigning the best transportation solutions.


✅ Improved Decision Making


A supply chain digital transformation with the most accurate data integration will enable you to make faster and better decisions for every situation. In addition, companies can also measure performance simply and accurately by collecting transactions and all available information at a larger level, thereby making the right decisions to avoid changes caused by average costing.


✅ Process Automation


Digital transformation in the supply chain increases efficiency, improves data accuracy, and boosts productivity by automating different labor-extensive processes and facilitating decision-making at many phases in the lifecycle. From beginning to end, everything is done automatically with little to no manual intervention. With automation, companies can find the most appropriate shipping method, carrier, and schedule while considering many other elements like time, speed, priority, etc. For example, alerts can be generated automatically if there are chances for any delays or complications related to purchase orders. This enables companies to take preventative measures and remain set to handle customers.


✅Improved Customer Engagement


Supply chain digital transformation is useful in increasing customer engagement throughout the buying journey. For instance, after placing an order, customers will stay informed about their order until it successfully reaches the destination using the supplier's automated tracking system. This will give customers better control and security.


✅ Modernization


Every type of digital transformation shares the same objective – modernization. Changes in the traditional approach to supply chain management will help improve the company's business model and strengthen connections with suppliers and customers. Simplicity in supply chain management is what all should aim for if they want to see their company modernized.


✅ Meeting Changing Customer Expectations


In these times, customers have become more discerning than ever before. They show little to zero tolerance for any inconvenience during their shopping experiences. They may simply switch to a competitor in case of chronic delays or other problems. Consequently, companies are shifting towards digital technologies to optimize all areas of their logistics and distribution. They make sure every step of the workflow is completed like lightning. Also, several companies are choosing centralized distribution and inventory management platforms. This allows them to depend less on warehouse inventory and become more responsive to customer demands.


How to Get Started with Supply Chain Digital Transformation


Digitization is essential to creating a smart and efficient supply chain network. According to Gartner, it is anticipated that half of the large international companies will use AI, advanced analytics, and the IoT in supply chain operations by 2023. Furthermore, collaborative robots are expected to supplement over 30% of warehouse workers.


Here are the best practices that can help organizations get started with the supply chain digital transformation:


🔎 Understand your current state and the risks associated


To get started with supply chain digital transformation, take the first step of realizing the current state of your supply chain, the risks involved, and the feasibility. Begin with analyzing all the potential risks in detail and formulate solutions to avert such possible difficulties. When you are mindful of the risks involved, taking proactive steps and establishing preventative on time is easier.

🔎 Define your strategy


Businesses and their supply chain partners need to collaborate and communicate to define the objectives of the digitized supply chain. Moving from a traditional to a modern, wholly integrated digital supply chain can be quite challenging; therefore, businesses must develop a defined strategy and implementation roadmap.

🔎 Have a long-term approach


Companies must have measures all set to help their system in the long run. The best of doing this is to take proactive steps to ensure system steadiness over time and in different business and financial conditions. Instead of taking the reactive approach, being proactive allows companies to secure their business from such needless situations.

🔎 Perform proper research and analysis


A robust supply chain is flexible and delivers returns as expected. Spending time on supplier analysis is important to achieve a certain level of effectiveness. The key to doing this is to start a contract with enough knowledge concerning the level of awareness of suppliers in regard to the potential risks involved. It is important that this point must answer all questions about expectations and common obligations.

🔎 Invest in Digital Capabilities


Once your objectives, risks, expectations, and potential advantages get clear, invest in relevant digital capabilities. The reason is that the right capabilities are important for the success of digital transformation, whether that is a digital logistics or supply chain management application, radio frequency identification (RFID) tags, GPS for real-time inventory management, or robotics for payment processing.


Following all these above-mentioned steps, you can reap the maximum benefits of digital transformation. A digitized supply chain, if chosen, will help increase business performance while solving different traditional models' outstanding issues related to agility, reliability, and effectiveness.


Kwixand Solutions Can Help Transform Your Supply Chain


If you're looking to transform your business operations, the team at Kwixand Solutions can help. Based in Vancouver, Canada, we are a Microsoft Dynamics 365 Partner, and ERP consultancy that helps manufacturers across Canada and USA digitally transform and achieve their long-term business goals. Book a free consultation today or drop us a line at info@kwixand.com

Register for our webinar: How to navigate supply chain disruptions