Global organizations such as GE, Amazon and other leaders began digitalizing their supply chain since years back. It is not too late for other businesses to start by empowering their operation teams. The objective of digital supply chains is mainly to minimize waste and increase profitability, whilst being an effective system. Some examples of such technologies are GPS tracking, barcodes, radio frequency identification (RFlD), smart labels and wireless sensor networks.
What is supply chain digitization?
What about digitization in supply chain? This article outlines some easy steps that will lead businesses towards an easy and flexible approach in making their digital supply chain training balanced and resilient. As a result, companies will have a fully modeled network that will enable them to deal with disruptions in the supply chain and even anticipate them.
To achieve a successful transformation of the existing system into a digital one, development of an organized process is key to implement and integrate the necessary technologies. This is important in order to avoid unnecessary delays and interruption in the delicate process of upgrading an existing operational system.
How to digitize supply chain – 5 steps
1. Consider your starting position and the risks involved
How to digitize supply chain? The very first step is to realize the current situation of your supply chain, what risk each supplier brings, and assess feasibility. All the potential risks need to be analysed thoroughly and you must formulate solutions on how such possible complications can be prevented. As soon as you are aware of the risks involved, it becomes easier to take proactive steps and set up preventive frameworks in a timely manner. Normally, this step involves assessing the maturity of your suppliers and the overall risk involved.
2. Define your strategy
At this stage, you will be aware about the effects of potential changes, and you can then encourage communication with the business entities involved. The aim is to create an understanding where they can be honest with the common goal that you want a system that will benefit both sides. Having a clear discussion about such matters will show inclusiveness and build the existing trust and confidence between you and your business partners. In this way, more insights can be acquired about what is more likely to work for both sides and provide the basis for how the foundation should be set. Consequently, this will also ensure that the digital management system will be adapted to your needs and the needs of the suppliers and other business partners. Learn more about digitization of supply chain.
3. Have a sustainable, long-term approach
It is important to have measures in place that will help your system in the long run. A good way to do this is by taking proactive steps to ensure system stability over time and in varying business and financial conditions. Keep in my mind that a reactive approach is prone to interruptions, delays, and at times, system shut down. Being proactive allows you to safeguard your business from such unnecessary situations.
Besides, the key is to realize that the urge to save money can lead individuals and organizations to adopt measures that can create big risks whilst focusing on the short-term benefits. This is why it is essential to cover all bases and see the bigger picture, as sustainability is a core value of all good business entities.
4. Conduct proper research and analysis.
A proficient supply chain is resilient and delivers the desired and expected returns. Investing time in supplier analysis is vital to achieve such level of effectiveness. One of the best practices is to set up a contract with appropriate knowledge of just how aware your suppliers are of the potential risks involved. As much as suppliers are expected to do their own risk analysis, it doesn’t mean that they necessarily are. The most important part of this step is that all questions about expectations and mutual obligations need to be answered by this point.
5. Invest in capabilities
It is certain that one of the biggest challenges is to find top digital talent for operations. Many digital leaders get started early by investing in the skills and expertise. They aim to build competence in areas such as automation, predictive maintenance and the Internet of Things (IoT).
Digitization of supply chain is key to encouraging transparency and visibility while controlling replenishment, maintenance, production, transportation, delivery and customer satisfaction, as well as driving efficiencies and mitigating risk. To make this happen, companies need to find the right employees and at the same time provide the right training to handle these new technologies effectively.
The good thing is that leading training providers offer eLearning solutions especially suitable to fill the digital skills gap. For instance, scenario-based training videos are the best way to help employees experience real job situations and allow them to stay prepared for any challenges. Besides, e-learning solutions such as gamification makes learning more enjoyable.
Digital technologies are likely to create new leaders at a pace industries have not experienced in the past. These technologies usually lead to signiﬁcant changes in the organization or its operating model. Companies have the challenge to identify the digital trends affecting their industry and customers so that they can begin to experiment and navigate the changes ahead.