Across sectors and industries technology has played a pivotal role in building products and services that are not just enhanced to meet the demands of today’s new-age criteria but for tomorrow’s needs as well. From digitization to analytic technologies, each cutting edge solution has been able to elevate most aspects of the business model. Today these solutions have even been able to penetrate and optimise one of the most notoriously complex networks that exist within most production-focused business ecosystems i.e. the supply chain.
With complexities that go across multiple levels of interactions, cross-platform coordination to a lack of cohesiveness between the inbound and outbound network – supply chain systems, pre-technology was confusing, fragmented, and plagued by uncertainties.
The conventional channels were long, time-consuming, and expensive, whereas the modern ways of warehouse, inventory, and delivery management have proved to be game-changers. As per a study by McKinsey, on average, organisations that focus on rapid digitization of their supply chains experience an increase in earnings before interest and taxes of about 3.2% which is the largest increase from digitizing any business area.
Factors such as the ever-growing competition and the incessant entry of new players have further, accelerated the transition from old to better and improved ways. Businesses with technologically empowered supply chains can match as well as surpass consumer expectations at reduced costs and increased efficiency. Here are some reasons that are fuelling the trend of digitized supply chains across the globe.
Usage Of Internet of Things (IoT)
The Internet of Things (IoT) has quickly gained momentum in supply chain management. It is a wondrous tool that records real-time data, enabling companies to manage repetitive tasks, ensure quality output, immensely reduce downtime, make automated decisions, better human resource utilization, and ultimately focusing on timely delivery with fewer errors.
For example in the agriculture supply chain management, dependence on weather conditions is a huge challenge especially when it comes to ensuring high-quality produce. The application of IoT sensors in warehouses helps in meticulously recording the temperature of warehoused goods to ensure quality and optimize energy costs. Furthermore, if these devices are attached to transport vehicles, they help in ascertaining the estimated delivery time for end consumers. Further, it even studies driver behaviour, stops required, and nature of traffic whilst identifying the best possible route.
Application Of Enterprise Resource Planning (ERP) systems
The ERP systems are the powerhouse of data generation, responsible for dramatically improving supply chain service conditions. When utilised to its fullest potential, these systems enable on-time and error-free order fulfillment, total inventory control, and streamlines order processing along with robust finance management.
The primary objective of these applications is to improvise and structure transactional activities like end-to-end planning, warehouse management, detailed analysis amongst other operational tasks. Additionally, ERP software accommodates the flexibility supply chains need for frictionless delivery and ensures zero paper.
Simply accumulating data without any purpose is equivalent to wasting numerous man-hours but, the collection of data in an appropriate manner with the help of ERP systems allows business owners to make quick and smart decisions. For example, within the food supply chain with the use of ERP to effectively map demand and inventory, aggregators can change the way retail networks source their supply. This data-centric approach through the use of integrated and smart supply chain systems can minimise waste, reduce cost and errors, improve speed, and deliver more reliable service levels
Inclusion Of Artificial Intelligence (AI) And Machine Learning (ML)
Developments in the field of AI and ML have made these elements an all-pervasive feature, i.e. they can be used across all levels of the supply chain network without the need for any human intervention. Apart from forecasting the weather, demand trends, and inventory requirements, they even predict unforeseen events that might hamper the operations, simultaneously helping companies design their contingency plans.
Further, by skillfully analyzing large sets of data, they have assisted organisations in achieving their goals of matching as well as surpassing customer needs of free and fast deliveries. Due to their innumerable uses and benefits, a Granter Survey suggests that over 37% of companies the world-over have adopted these technologies, indicating a rise of 270% as compared to previous years.
Every action and decision in the supply chain is an outcome of pre-set conditions. The combination of a sophisticated algorithm organises the flow of the product from one place to another across the supply chain network. Further, analyses the data from producers and consumers for better accurate predicted outcomes and suggests improvements.
Incorporation Of Radio Frequency Identification (RFID)
To survive in a market where cut-throat competition reigns supreme, companies need to have easy access to accurate, actionable, and real-time data regarding their inventory levels and goods geographic location. With the usage of RFID tags, scanners, and chips on products, companies can track their stock with sheer efficacy and benefit from the advantages of multi- stop route optimization. Further, it even enhances the visibility of the offerings, making the channels sustainable at the same time, allowing immediate identification and correction of errors in orders.
Companies have full visibility of the transportation of goods, enabling them to identify the strategic routes for faster deliveries while avoiding any damage to product quality during transportation. Additionally, it helps to adjust the number of vehicles directing them to the market where demand is anticipated to rise.
In a world where the customer is king, companies are relentlessly chasing the goals of customer satisfaction, sustenance and expansion; it is essential to develop strong communication channels amongst intermediaries at all levels.
For instance, with the help of ChatBots, smart warehousing, advance algorithm, and RFID devices, organisations can provide services such as real-time order tracking, FSL location maps, availability of special goods, predict timings and handovers amongst others as the product moves throughout the supply chain network until it reaches the end consumer. Further, easy and barrier-free exchange of information is promoted across the various stages of product movement.
The benefits one can reap from adopting these technological solutions is immense, but companies need to have a clear plan ready before they make any such investment. A well-thought-of idea combined with apt application and placement of these tools will lead to unprecedented results at reduced costs and boosted performance quality.