Why You Need a Digital-First Supply Chain

Before the onset of the pandemic in 2020, many businesses perhaps had little idea what a large-scale disruption could do and how it could impact their daily operations.

Here’s some data to understand the immediate impact of pandemic-induced disruption on small businesses.

According to the April 2020 Current Population Survey (CPS), the number of active business owners in the United States plummeted by 3.3 million or 22% over the two-month period from February to April. This was the largest drop on record.

The scenario wasn’t very different in Europe during that time. A large number of small and medium-sized companies in the region were looking at a possible shutdown.

Fast forward to 2022, most businesses have robust plans in place to counter disruption and mitigate risks. Their priority now is to build what has truly become the industry buzzword — resilience.

Additional Read: Manage The Inflation Problem With A Digital Supply Chain

What is Digital Supply Chain?

A digital supply chain is a modern, technology-enabled version of a traditional supply chain that leverages next-generation technologies such as Internet of Things (IoT), artificial intelligence (AI), machine learning (ML), blockchain for optimal visibility and fastest possible movement of goods in a supply chain. 

Digital supply chains capture and analyze data in real time, enabling enterprises to make informed decisions and keep on fine tuning their supply chain operations for the best possible outcome. 

Why you need a Digital-first Supply Chain

If you plan to digitalize your business’ supply chain, here is why you should no longer delay it:

1. Simplify Decision-Making

With a digital supply chain, you get all data in one single platform in real time. This ability to access data at one place enhances transparency and simplifies decision-making. This is unlike traditional supply chain operations where you get data from multiple streams and platforms and then search for the right insights.

2. Foresee Risks

Anticipating and mitigating risks has become vital given the current uncertainty and prolonged disruption. With a digital supply chain, you can leverage a central repository of supplier performance and issue log for enterprise-wide supply risk tracking. You can also perform supplier risk assessment and validation vis-à-vis third-party credit ratings.

3. Focus on Strategic Tasks

Digital supply chains have automated workflows, which means you don’t have to worry about routine tasks and activities that otherwise take a lot of time. As these tasks are automated, you can focus on core, strategic tasks that need more attention.

4. Boost Flexibility

Stakeholders have a number of options at hand when supply chain operations are digitalized. For example, you can adjust raw material purchases and production capacity by estimating demand. Likewise, you can make changes in warehouse capacity and logistics.

5. Build Agility

Digitalization enhances your ability to react and respond in a timely fashion. For example, instead of manually processing warranty claims, you can quickly and accurately process them by automating the payout.

6. Reduce Cost

Automation and advanced analytics can help your enterprise drive efficiency and eliminate waste. Enterprises that have optimized processes can reduce labor, inventory, and logistics costs.

7. Accelerate Innovation

Data analytics identify your customers' needs and identify areas for new products or services. Furthermore, collaborative digital tools support rapid prototyping and feedback.

8. Reduce Time-To-Market

Enterprises with digitized design and production processes enable faster new product development, bolstered by improved supply chain visibility.

9. Improve Efficiency and Productivity

Inventory optimization and coordinated logistics improve product flow and velocity. Performance monitoring and control towers can further enhance real-time decision making.

10. Customer Satisfaction

Enhanced traceability and track-and-trace capability improve order accuracy, enabling faster fulfillment and delivery times for enhanced customer experience.
 

Overall, a digital-first supply chain enhances visibility and collaboration with suppliers – which are both vital to build resilience and thrive in the new normal. In this process, it also helps a business improve its compliance scores.