The supply chain, as we know it today, has come a long way from being a series of structured steps covering marketing, product development, manufacturing and distribution, and finally, sale. The advent of the digital revolution brought about a more transparent and integrated supply chain ecosystem, simplifying and accelerating the entire process from the point of obtaining raw material, to when finished goods are transported, and subsequently when it finally reaches the customer. In fact, digitization and the Internet of Things are fast gaining ground in the supply chain sphere, putting to rest worries of the digital revolution place supply chain management at risk. The digital revolution has the ability to take supply chain management to the next level, but only if digital innovations are optimized to reap profits and create efficiency for all those involved.
The evolution of the digital supply chain
The long road to business digitization began in 1800 with the emergence of steam and water power, which galvanised a transformation in production and automation. Mass production was enabled a century later with the invention of machines powered by electricity. This was followed by the first assembly lines know to production. Fast forward to the 1970s, we began to see the use of electronics, IT and industrial robotics to automate production processes, and when computers and the internet came into the picture, the information age was born. Circa 2015 onwards, the digital supply chain was introduced, and along with it came smart manufacturing processes enabled by digital products, services, and business models, fuelled by data analytics. It would not be remiss to say that in future, the digital ecosystem will be driven by digital technologies that are integrated with every aspect of a company’s value chain.
The digital supply chain is central to supply chain management as it ties together all the key players in a business through a network of sensors and new digital technologies such as big data analytics, the cloud, and 3D printing. As a result, the number of companies that are now investing heavily in digital supply chains is growing progressively. A recent PwC study on modern-day industrialisation found that one-third of respondents believe their companies have started digitising their supply chains, while 72% expect to have done so in five years’ time. Digitisation brings vast economic benefits to company bottom lines, making it a key priority for companies everywhere. In fact, research has shown that companies with highly digitised supply chains and operations can expect a 4.1% growth in efficiency gains, and a 2.9% growth in revenue, annually.
Although efforts to digitise supply chains have come quite far, the rate of uptake differs across various industries. For example, electronics manufacturers – who have been outsourcing manufacturing processes for quite some time already – are quite far ahead of the rest when it comes to building and managing digital supply chains. On the other hand, consumer-facing companies such as fashion retailers are still learning the ropes when it comes to digital supply chains, leaving it vulnerable to serious disruptions in their supply and distribution networks. One thing is for certain, and it is that the digital revolution is sweeping over industries big and small, and those who refuse to innovate when it comes to business processes – specifically, in supply chain management – are bound to be left behind.
The rise of digital sprints in supply chain management
In a digital sprint, the supply chain, manufacturing, and project managers work together intensively in competition with other teams to develop digital initiatives that will enhance their company’s supply chain. Essentially, these digital sprints aim to foster digital innovation in the manufacturing and supply chain space by developing working models of new products and manufacturing processes in an efficient and cost-effective manner. Realising the importance of the digital revolution in digitising the supply chain space, more and more companies are now hiring chief digital officers to monitor and understand the most recent digital innovations and trends, and subsequently, optimise them for business success. The success of digital sprints may be attributed to its focus on collaboration and action – two things that are guaranteed to produce tangible outcomes – as well as the fact that it is not cost-prohibitive.
The popularity of digital sprints has garnered the attention, support and participation of other initiatives such as the Internet of Things Consortium and the Industrial Internet Consortium, as well as established organisations, which are implementing these events in collaboration with internal experts and government-sponsored companies. The support of trade associations such as the Internet of Things Consortium and the Industrial Internet Consortium is vital to the growth of digitisation in supply chain management as they offer resources and technical expertise on digitisation in manufacturing. Through collaboration and brainstorming, the ideas generated from a digital sprint can be tested for feasibility and functionality. The case studies that are produced as a result of these digital experiments often bring great gains to the area of supply chain management in the form of safety improvements, energy savings, general operating efficiency, and shorter supply-chain cycles.
As the world advances along with the digital revolution, more and more companies will focus on digitising their supply chain management processes with applications and digital innovations that bring higher efficiency. What is certain, farsighted companies that adopt digital supply chain management processes ahead of other players stand to gain a strong competitive advantage when moving towards a fully-digital ecosystem, and become standard setters capable of influencing or changing the technical standards for their industries. Ultimately, this will create many new business models and generate various revenue streams, bringing them to the forefront of the digital revolution in supply chain management.
Just like everything else supply chain has come a long way and due to the advancement in technologies it has brought supply chain to a whole new level .For related professional articles as this, stop by at our site ThunderQuote
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