Digital transformation and its importance to supply chains is a hot topic. But what exactly is it? Is it just another IT buzzword or is it a key business strategy to stay competitive? In this article, find out the answer to these questions and more. Without a doubt, it’s time to move beyond the hype and examine how a business-led digital transformation can drive fundamental change in organizations. Further, I’ll provide you 14 examples of how new digital solutions are revolutionizing supply chains.
Digital Transformation: A Business First, High Tech Reinvention Of Processes And Culture.
The term “digital transformation” often elicits skepticism, prompting the question: Is it merely the latest IT jargon? Despite its frequent misuse as a marketing ploy to hawk high-tech products, we shouldn’t allow this to overshadow its significance. In truth, an effective digital transformation strategy is essential; it transcends being a passing IT fad or simply a line item in the budget. For those questioning what digital transformation entails, I’d like to make the following three key points regarding common questions business leaders have about digital transformations.
The Way of Digital Transformation
- Business Leads, Tech Enables. To succeed, corporate executives must guide their organization through this shift in corporate culture and business processes.
- The Breaking Down of Department Silos to Re-Invent and Digitize Corporate Operations. This is the essence of a digital transformation that fundamentally changes an organization.
- It’s About Digital Change that Can Change Business Processes, Models, Domains, and Cultures. So, digital change can range from simply optimizing business processes to fundamentally changing a business culture.
For a detailed explanation of what digital transformation is that elaborates on the points above, see my article, The Way Of Digital Transformation: A Business First, High Tech Reinvention Of Processes And Culture.
Emerging Technology Examples Of What A Digital Transformation Strategy Can Do For Your Supply Chain.
As businesses embark on their digital transformation journey within the supply chain, they may leverage various emerging technologies to optimize processes and drive innovation. Now, it is key to understand that there is no one specific type of technology or software that will enable a business’ digital transformation. Indeed, a digital transformation strategy is owned and executed by the business’ leadership team. Without a doubt, it is senior executives who set direction for companies to new technologies that will bring fundamental changes to organizations. So, to get a better idea of what types of technology initiatives could be part of a business’ digital transformation strategy, below is a list of 14 digitization initiates.
14 Supply Chain Examples of Digital Transformation Initiatives
1. AI-Powered Autonomous Negotiations for Supplier Sourcing.
Here, businesses can leverage AI-powered autonomous negotiations to streamline supplier sourcing. For example, using natural language processing and machine learning algorithms, companies can automate the negotiation process by analyzing historical data and market trends to optimize supplier contracts and achieve cost savings. For more details, see my write-up, Supplier Sourcing Tech Trends: AI And Data Analytics Game-Changers.
2. Use of AI and Data Analytics to Power Demand Forecasting.
In this case, businesses can use AI and data analytics for accurate demand forecasting. For instance, companies can leverage historical sales data, customer behavior patterns, and external factors like weather conditions to predict future demand. This allows them to optimize inventory levels, reduce stockouts, and improve customer satisfaction. For more information, see my article, Supply Chain Planning: Data Analytics Advice That Will Result In A Better Way.
3. Ecommerce Cloud-Based Software Platforms and Microservices to Integrate Workflows and 3rd Party Software.
By adopting a digital transformation strategy, businesses can integrate their supply chain workflows and third-party software through ecommerce cloud-based platforms. For example, companies can use platforms like Shopify or Magento to seamlessly connect their inventory management systems with online marketplaces like Amazon or eBay. As a result, this tech enables efficient order fulfillment and real-time inventory updates. Also, more companies are using API-driven Microservices versus using a monolithic software architecture. Specifically, microservices are a suite of small services, each running in its own process and communicating with lightweight mechanisms such as APIs. For more information, see my article, Microservices’ Advantages And Cautions: Spotlight On This Awesome Tech In The World Of Ecommerce.
4. Omnichannel Retailing Automation and Headless Ecommerce to Offer Customers a Seamless Experience.
Through digital transformation, businesses can automate omnichannel retailing to provide customers with a seamless shopping experience. For instance, companies can implement centralized inventory management systems. Specifically, these systems synchronize product availability across multiple channels such as physical stores, ecommerce websites, and mobile apps. As a result, this ensures that customers have consistent access to products regardless of the channel they choose. Another example for online retailers to interact with shoppers across multiple sales channels is to use an API-driven approach called Headless Ecommerce. For more information, see my article, Headless Ecommerce Fundamentals: Ways It Is Changing Supply Chain Tech.
5. Robotics and Automation for Improved Warehouse Efficiency.
Here, companies can leverage robotics and automation technologies to enhance warehouse efficiency. For example, businesses can deploy autonomous robots that navigate warehouses to pick and pack items, reducing human error and increasing operational speed. This improves order accuracy, reduces labor costs, and enhances overall supply chain productivity. For more information on intelligent robots, see my article, Warehouse Robots.
6. Internet Of Things (IoT) Monitoring of Trailers and Freight Status.
Through digital transformation, businesses can leverage IoT technologies for real-time trailer and freight status monitoring. For instance, companies can install IoT sensors on trailers and containers to track their location, temperature, humidity, and other relevant parameters. This enables proactive management of logistics operations, ensuring timely deliveries and minimizing the risk of product damage. For more details on trucking technology trends, see my article, Trucking Tech – 9 Awesome Innovations That Are Going Mainstream.
7. Drones Technology for the Transport Goods and Inventory Visibility.
In this case, businesses can utilize drone technology for efficient transport of goods or to enhance inventory visibility. For example, companies can employ drones for last-mile delivery in remote areas or use them to conduct aerial inventory scans in warehouses. This reduces delivery time, improves inventory accuracy, and enhances overall supply chain visibility.
8. Leverage Artificial Intelligence (AI) Automation for Invoice Processing Analytics.
Through digital transformation, businesses can leverage AI automation for invoice processing analytics. For instance, companies can use AI algorithms to extract relevant data from invoices, automate invoice matching with purchase orders, and identify discrepancies or anomalies. As a result, this streamlines the accounts payable process. Thus, AI can reduce manual effort and improves financial accuracy. For more information, see my write-up, Exploring New Technology And Methods As Alternatives To Traditional Freight Invoicing And Payment.
9. Blockchain for Enhanced Traceability of Controlled Products.
Here businesses can leverage blockchain technology to enhance the traceability of controlled products. For example, companies in the pharmaceutical industry can use blockchain to create an immutable record of each step in the supply chain. Hence, ensuring transparency, traceability, and preventing counterfeit drugs from entering the market.
10. 2D and QR Barcodes Enable the Storage of More Data and Increases Interoperability.
Through digital transformation, businesses can utilize 2D and QR barcodes that can store more data and increase interoperability vs. 1D traditional barcodes. For instance, companies can implement QR codes on product packaging to provide customers with links to detailed information about the product’s origin, documentation, and even related products.
11. Leverage Digital Tech For Supply Chain Visibility.
Global market complexity underscores the need for supply chain visibility to inform business decisions. However, achieving visibility can be overwhelming due to data volume and costs. Importantly, visibility is not a one-size-fits-all software solution; it requires ongoing effort and tailored technical solutions. Below are six visibility types to help businesses focus on the most valuable insights.
- Transportation Visibility: Find My Stuff.
- Capacity Visibility: Identify Choke Points in the Supply Chain.
- Shipment Data Analytics Visibility: Measure Performance.
- Rates Visibility: Manage Transportation Spend.
- Supply Chain Planning Visibility: Prepare for Future Operations.
- Strategic Supply Chain Visibility: Innovate And Optimize Processes.
For more details on supply chain visibility and digital transformation, see my article, Surprisingly Supply Chain Visibility Has Many Forms: See Which One Is Best To Be Your Business’ First Focus.
12. Decision Intelligence (DI) Tech to Streamline and Improve Decision Flows.
Through digital transformation, businesses can leverage decision intelligence (DI) tech to improve decision flows. For instance, companies can use machine learning algorithms and predictive analytics to analyze historical data and make rapid, data-driven decisions. Hence, this improves operational efficiency, reduces manual intervention, and enables faster response to changing market conditions. For more information on decision intelligence tech, see my article, Decision Intelligence Tech To Empower Logistics: The Ways These New Analytic Practices Are Better.
13. Virtual Reality (VR) and Augmented Reality (AR) in Workforce Training.
Here, businesses can incorporate virtual reality (VR) and augmented reality (AR) technologies into workforce training programs. For example, companies can use VR simulations to train employees on complex tasks or AR overlays. As a result, this initiative provides real-time guidance and information during assembly processes. Further, this enhances employee skills, reduces training costs, and improves overall productivity.
14. 3D Printing for On-Demand Manufacturing.
Through digital transformation, businesses can leverage 3D printing technology for on-demand manufacturing. For instance, companies can use 3D printers to produce customized products or spare parts without the need for traditional manufacturing processes. In some cases, this will radically streamline the supply chain. As a result, this digital solution reduces lead times, minimizes inventory costs, and enables businesses to respond quickly to customer demands.
More References.
- Gartner’s Where and How to Target Your Digital Business Transformation
- PlanView’s DIGITAL TRANSFORMATION STRATEGY: WHAT YOU NEED TO KNOW
- AWS’ What is Digital Transformation?
- GEP’s Digital Transformation Roadmap for Supply Chains
- Also for the latest trends on supply chain technologies, see my article, Logistics Technology Trends: The Best Advice To Empower Your Supply Chain Right.
Need help with an innovative supply chain solution that leverages emerging information technologies? I’m Randy McClure, and I’ve spent many years helping logistics organizations to make the most of new information technologies. As a supply chain tech advisor, I’ve implemented hundreds of successful projects across all transportation modes, working with the data of thousands of shippers, carriers, and 3rd party logistics (3PL) providers. I specialize in new strategies, proof-of-concepts and operational pilot projects using emerging technologies and methodologies. If you’re ready to supercharge your supply chain or if you are a solution provider, let’s talk. To reach me, click here to access my contact form or you can find me on LinkedIn.
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Greetings! As a supply chain tech advisor with 30+ years of hands-on experience, I take great pleasure in providing actionable insights and solutions to logistics leaders. My focus is to drive transformation within the logistics industry by leveraging emerging LogTech, applying data-centric solutions, and increasing interoperability within supply chains. I have a wide range of experience to include successfully leading the development of 100s of innovative software solutions across supply chains and delivering business intelligence (BI) solutions to 1,000s of shippers. Click here for more info.