How to create a connected supply chain with Digital Transformation


For any business to thrive, the basics include getting your supply chain management (a combination of logistics, transportation and warehouse facilities) in sync. This is something businesses have worked on much before digitization. With better connectivity and communication being enabled by digitization, the advent of Internet of Things (IoT) simply took things to the next level in terms of speed, which for any manufacturing industry is key.

Where you may think that digitization of a supply chain would have been top on the list of priorities, surprisingly, a McKinsey study pegs it at a mere 43%. This especially when aggressive digitization of a supply chain can ensure an annual revenue growth of 2.3%. Despite these figures, there has been a slow movement towards digitization mainly due to technological gaps and choices made by respective managements.

So how can you create an effective and connected supply chain for your organization? Here are three steps in the way forward:

Understand Where Digitization Can Help your Supply Chain

Every manufacturing system has an end-game that it works towards. Analytical tools that digitization brings in, allows compilation of big data and the extraction of useful information for decision-making. If analyzing market trends is a requirement, focusing on this aspect of digitization will help your organization.

Performance issues can be addressed, production quality can be maintained, predictive analyses will help nip problems in the bud and swift decision making is enabled for everyone – from the production floor to the executive level. You need to know where your organization needs the help – service, costing, speed, or inventory maintenance or consistency; and digitization can help achieve that operational excellence.


Integrate Technology With Updated Operation Processes

The basic process of transformation will require operations changes at multiple levels. It begins with current assessments, final goals and charting out a vision to arrive at it. When you factor in digitization, there are a few more aspects to take into consideration. At the assessment level – you need to understand whether you have manpower with the technical prowess to upgrade and manage the transition. You also need to be open to making radical changes as well as some changes that will give you maneuvering space when in transition to accommodate requirements. This will mean having predictive abilities as well. 

Read: Impact of IoT in Retail Supply Chain Management

Empower Your Eco-System

Digitized organizations are vastly different from traditional business models. Being part of a digital economy requires you, as an organization to provide value that will open up opportunities on multiple levels. You will have to create an eco-system that allows for digital upgrading. This will mean that all processes as well as services will have to be part of the digitization effort, in order to work seamlessly. This requires executive level decisions on processes and services that will enable such integration.

Read: Optimization of Supply Chain Management with Big Data

There is no doubt that digitization helps organizations improve their supply-chain processes, and that too, at a nominal price. It is precisely this cost appeal that has had several companies jump onto the bandwagon without a clear line of thought on implementation. For digitization of any supply chain, it is essential that a clear vision be charted out, which is based on evaluation of current performance and a view of the level it has to be brought up to. It is also important to recognize that supply chain digitization is essentially based on both technology and operations coming together. Those organizations that take these factors into consideration will be able to reap the complete benefits of digital technology in the supply-chain domain.


Author : Ruth Date : 31 Jan 2018