This article is yet another dose of enlightenment on our technology series to keep our clients informed on the pace and direction of supply chain industry standards. Previously we have discussed the importance and applications of Blockchain technologies and IoT (the Internet of Things) in logistics and supply chain management. These technologies are transforming the way we do business. To stay up to date and competitive we must stay informed. The issue is most of this stuff is so new and so dynamically changing that keeping up is a challenge for most of us from the old school way we’ve been managing transportation for decades. We have some catching up to do in a hurry.
Digital Supply Chain Defined
I always insist my readers have a firm understanding of our discussion topic. To that end; A Digital Supply chain is defined as A digital supply chain is a supply chain whose foundation is built on Web-enabled capabilities. Many supply chains use a mix of paper-based and IT-enabled processes. A true digital supply chain goes far beyond this hybrid model to fully capitalize on connectivity, system integration and the information-producing capabilities of "smart" components.
Digital Supply Chain 101
Ultimately, virtually every aspect of business will be transformed through the vertical integration of research and development, manufacturing, marketing and sales, and other internal operations, and new business models based on today’s advances. In effect, we are evolving toward the complete digital ecosystem. If you recall from our blogs on Blockchain technology and IoT. The common thread of these and other emerging technologies in the web-based component which allows for inter-connectivity and sharing of real-time information. The days of fax transitions and telephone calls are all but extinct. Email may survive but will likely be phased out in favor of peer to peer communication. Peer to peer communication is a direct connection between users operating on a shared platform bypassing the delay of email or analog communication.
What To Expect
So, the race is on. Companies across industries are already investing heavily to develop their own versions of the DSC. According to a recent PwC study on the rise of Industry 4.0, a third of the more than 2,000 respondents say their companies have started to digitize their supply chains, and fully 72 percent expect to have done so five years from now.
The reasons behind the investment rush are easy to see. Supply chain professionals expect digitization to bring significant economic benefits to both top and bottom lines: Companies with highly digitized supply chains and operations can expect efficiency gains of 4.1 percent annually, while boosting revenue by 2.9 percent a year.
Some industries are further along the digital supply chain continuum than others. Electronics manufacturers, for example, have learned a great deal about building and managing DSCs through their long-standing efforts to create outsourced manufacturing networks. Not so far advanced are consumer-facing companies, like retail and fast-moving consumer goods, which are still vulnerable to serious disruptions in their supply and distribution networks. Yet, these industries are already working to transform their chains, as are even more asset-intensive industries like chemicals.
It’s clear we all need to be prepared for the new normal which is rapidly approaching. Contact one of our Logistics professionals at Land-Link.com for advice on how to prepare for the coming technological storm.