How to leverage the supply chain digital transformation for business growth?
Friday August 20, 2021
For the past couple of years, the supply chain digital transformation has shaped the logistics industry and led many companies to implement modern technologies in their search for efficiency and business growth. But even though technology is taking over many business scenarios, there are still companies that are not as open to change or do not understand how they can leverage the digitalization of the supply chain.
Staying ahead and being on top of the now called Logistics 4.0 it’s essential for companies to fully understand their internal processes and incorporate technology to draw out incredible results. It is no secret that technology brings time and inefficiency reductions. But not every company works the same way, and they must each find its unique implementation process, considering scalability as a crucial ally.
Even though this technological revolution is not a new trend, some companies are still in a very immature stage of their technology implementation process because of the lack of knowledge and understanding of how to start and what benefits it may bring.
Six ways to leverage the supply chain digital transformation
Here are some ways companies can leverage the supply chain digital transformation to leverage growth:
1. Cost reductions
The supply chain digital transformation enables companies to become leaner in many operational areas. Some tasks that various employees did can now be automated and executed by bots instead of employees. Therefore, allowing companies to reallocate their workforce and place them in more strategic positions.
With the implementation of efficient and reliable software, you’ll obtain a reduced workforce, and most of your employees working on more relevant tasks, ultimately bringing cost savings.
Research executed by the Digital Supply Chain initiative (DSCi) states that “improved enterprise Digital Supply Chains (DSC) can lead to a 20 percent reduction of procurement costs, a 50 percent reduction in supply chain costs, and an increase in revenue of 10 percent.”
2. Reduced inefficiencies
When implementing real-time tracking software, a big part of the digital transformation, you'll see exactly where your freight is and its precise ETA. This information is beneficial not only for your client but also for your operation. By keeping track of your shipment, you can determine the inefficiencies and create ways to eliminate them.
For instance, if you find a particular route is delaying your delivery time because there's too much traffic or too many red lights, you'll be able to change the route to an alternate one that gives you back those precious minutes.
But it's not just during the transportation process where you'll be able to locate inefficiencies; with all the recollected data, you'll pinpoint other areas of improvement and apply the necessary actions to enhance their performance.
During these unprecedented times, one essential value that every company should strive for is resilience. Many businesses have had to find extraordinary ways to maintain profitability and stay ahead of the competition. Being resilient and implementing out-of-the-box strategies have led many to stay in business and obtain impressive results.
4. Risk mitigation
Risk mitigation in any business enhances performance and allows your company to provide better services. Having data, real-time visibility, and relevant information during the entire process gives companies the capability to notice and identify potential risks before any issues arise. And if they do occur, company leaders will be able to respond quickly with action plans based on data.
Every business has its risks, and it's almost impossible to affirm that technology will have everything under control. But by being able to visualize the entire process, you'll gain access to information that helps you avoid issues or respond to them quicker, which in the end, improves your overall performance and service.
5. Demand forecasting
Having data is essential, but without the proper analysis of the data, it may become useless. Knowing what to do with the information is as necessary as having it. With an intelligent analysis of the data, you’ll be able to predict the demand and replenish your goods when needed to ensure the order is met. Instead of analyzing historical data, you’ll have real-time, day-to-day information that will help you make the right business decisions, ones that will avoid waste of time and resources.
6. End-to-end visibility
One of the biggest trends in logistics is sharing data through business networks. Now that companies can quickly obtain data and relevant information, the next step is to share this helpful information with all the parties involved in the supply chain process. Data becomes more valuable when it is shared. When all the partners are informed and aligned, there’s added value and synergy in the entire process, allowing businesses to work together to find opportunities for improvement and “win/win” situations.
Every one of the aspects mentioned above is a new element that makes up the digital supply chain transformation. When applied correctly, the adoption of technology drives business growth. It allows companies to reduce costs and inefficiencies, provide fast response when issues arise, gain access to relevant information to make strategic decisions, share data with their network, and create a seamless and more efficient process throughout the entire supply chain.
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