Digital transformation is somewhat of a buzzword, but that doesn’t mean it’s a fad. The need to facilitate change in the supply chain isn’t going to diminish, if anything it is only going to grow as new and exciting technologies start to move into the mainstream.
This is fuelled by ever-increasing customer expectations, with end-users expecting shorter delivery times, constant progress updates and complete transparency throughout the product’s journey to delivery.
It is requiring supply chain executives to assess their legacy operations and consider how they need to change to incorporate emerging solutions, such as Internet of Things (IoT), Artificial Intelligence (AI), machine learning and blockchain.
Besides a fundamental need to innovate, digital transformation is providing managers with the opportunity to use these technologies to reach new levels of operational effectiveness within their supply chain. They can drive efficiencies across the board, lower cost margins in the long-term and create a truly intelligent enterprise that can provide all parties with the information they need to make timely decisions.
As more logistics managers look to re-imagine their operation’s capabilities and improve delivery reliability, technologies such as machine learning and predictive analytics are becoming essential.
With these in place, companies will be better positioned to exploit advanced forecasting capabilities and to predict future behaviour so that they can make informed business decisions ahead of time.
This can be data internal to the company, which can be used to assess the amount of inventory required or when a piece of machinery is due to come to its end-of-life, as well as external data - such as weather variations, school holidays by region or fluctuations in products’ price indices.
All of which can help business leaders to make decisions which are beneficial to the company. It ensures no machinery is out-of-action and saves cost in the long-term by lessening the chance there will be a lack or surplus of stock in the inventory at any one time.
Technologies, such as artificial intelligence or robotic process automation (RPA), also come to the forefront when it comes to driving efficiencies.
These can be used to automate repetitive, manual tasks. Not only freeing up the time of your employees, which can then be shifted towards higher value work elsewhere, but also reducing risk of human error.
Within the warehouse system, robotics can then assist with the handling of materials, from receiving and unloading to packing and shipping. This technology is now even being leveraged into the transportation elements of the supply chain process, for example through autonomous trucks which carry stock from A to B.
Managing a vast supply chain with thousands of products and raw materials and dozens of organisations including suppliers, distributors and transportation companies, requires a huge amount of collaboration.
Greater visibility lets managers see problems ahead of time, however, and work with suppliers to deliver stock safely, within the timeframe promised. Connected devices are helping to deliver that oversight, enabling decision-makers to see that bigger picture in real-time.
With this information, companies can react to an emerging issue in the network, such as a disruption to a transport route in one area and redistribute resources accordingly - before it has a chance to have a knock-on effect further down the supply chain.
At the same time, emerging solutions, such as blockchain, also promise to improve trust within the supply chain and satisfy consumer expectations, especially when it comes to sustainability and social responsibility.
With supply chain networks being as complex as they are, a digital transformation journey that incorporates all these new solutions will not happen overnight. It will involve intricate integration with core transactional systems and an optimising of their digital core. A human-centred change management strategy will also be required to ensure each employee understands and maximises the potential of this technology.
It’s obviously an advantage to work with a partner experienced in delivering transformation projects, but it also helps to develop a step by step strategy that will allow you to leverage the technology on offer today, and ensure you are equipped with a foundational platform to embrace the solutions that emerge tomorrow.
Andy Bell is Chief Technology Officer at Edenhouse Solutions, a UK-based professional services company focused on maximising the potential of SAP solutions.