05 Technology Advancements Accelerating the Supply Chain Industry
Technology is advancing since its initial burst of development. It has evolved to support the future of the supply chain industry and is helping the industry to become more agile, responsive, and efficient for growth.
The dependence on digital transformation for supply chain efficiency trailed off after the initial burst of innovation in technology. But now as we get used to the post-pandemic normal, the industry’s challenges cannot be overlooked and supply chain digitization takes precedence for the Chief officers and they work to make the industry more resilient, transparent, driven with more accurate forecasting and re-trained personnel.
Factors affecting the DT initiative
Management choices along with the technology available have a significant impact on the success or failure of the transformation initiative. Today digital transformation initiatives are planned to the T from involving the employees involved in everyday smaller steps to planning the long-term development stages. Rethinking the approach and making effective choices have become the outlook to support strategic decisions such as investments, resource allocation, and organizational structure, as well as tactical decisions related to day-to-day operations, processes, and procedures. With the right attitude, management helps to ensure that digital transformation initiatives are successful and deliver value to the organization, and not lead to roadblocks.
The pace of technological growth continues to accelerate and the capabilities of technology have come a long way, revolutionizing various aspects of supply chain business processes. We have now seen many remarkable developments that resolve many industry issues. Picking the technology which suits your end goal and taking expert advice to learn how the available technology can be customized and integrated to fill existing system gaps can set an enterprise for success.
However, being a business transformation consultant and having a strong knowledge of cloud software implementation and training, I recommend 5 critical functions in every supply chain ERP (Enterprise Resource Planning) that C-suite needs to pay more attention to, for realizing the ROI and accelerating the business:
Demand planning tools nowadays provide advanced forecasting methods, demand analysis, and inventory optimization to enhance demand planning accuracy. By planning for customer demand patterns and anticipating their needs, businesses can avoid stockouts, minimize backorders, and deliver products on time.
I have seen these challenges with many of my retail customers, especially with multiple fulfillment channels and during high demand in peak seasons. With demand planning and access to accurate forecasting, businesses are able to avoid costs associated with rush orders, expedited shipping, and last-minute production adjustments. It helps avoid all the stress which comes with tight deadlines and last-minute coordination and keeps the organization on track and prepared for the season well in advance.
2. Complex fulfillment processes:
While your ERP may be doing an excellent job for you, there is no “one-size-fits-all”. Businesses with intricate fulfillment requirements, like our jewelry clients, where customers may need personalizations for Mother’s Day, or a JIT (just-in-time) delivery for a surprise proposal, require advanced technology systems and streamlined processes to ensure customization, on-time delivery, and customer satisfaction are taken care of. Integrations of organizations’ existing processes with external systems become necessary to process such orders at reduced storage costs and with better utilization of warehouse space. An ERP customized to the needs of the industry help take care of such unique requirements and save from poor stock visibility, poor accountability, and inaccurate financials, all of which can significantly impact an organization’s bottom line.
3.Third-party logistics (3PL) integration challenges:
Integrating ERP with third-party logistics providers can sometimes be challenging due to the differences in data formats and communication protocols. This can result in manual workarounds or additional development efforts. When technologies like iPaaS middleware, API integration, or RPA (Robotic Process Automation) are used, it reduces manual work and brings efficiency to the entire supply chain.
With such third-party integrations, real-time information can be analyzed and organizations can identify process bottlenecks, analyze performance metrics, and automate repetitive and rule-based tasks to achieve continuous improvements. RPA has been proven when applied to well-defined and rule-based processes improves efficiency, reduces errors, and frees up human resources to focus on more strategic tasks.
4. Transportation management:
The Suez Canal blockage in 2021 highlighted the vulnerability of global supply chains and the interconnected nature of the freight industry. It emphasized the importance of risk management, contingency planning, and diversification of transportation routes to mitigate the impact of such disruptions. Almost all of my customer’s deliveries were in some shape or form, impacted by this incident.
When the ERP landscape is extended to support complex functions like optimizing vessel routes, efficient last-mile delivery, or integrating with tracking technologies such as GPS and IoT devices it provides accurate delivery information to customers which can be used for contingency action plans bringing in the required efficiency.
5. Advanced inventory optimization:
Sometimes the “simple” needs of customers may become complex solution designing. One of my clients wanted to introduce “green shipping” which involves implementing measures to minimize shipping operations by being mindful of various things like the size of boxes used, the number of packages dispatched, and so on. These efforts help lower costs and environmental impact. Another one of my customers had a requirement to fulfill orders from multiple locations (including a cross-border warehouse) based on cost, added with international duties, +shipping costs, +exchange rates, and the sourcing location, all this while keeping inventory in sync between the eCommerce and Stores and the multiple warehouses. Phew! Very simple!
No matter what the end goal is, it is crucial that any digital transformation initiatives enable real-time visibility into inventory levels across multiple locations, including warehouses, distribution centers, and retail stores. Enables visibility into shipment processes with accuracy in tracking. With advanced technologies like IoT sensors, barcode scanning, and RFID tagging, organizations can get accurate and up-to-date inventory and sipping data. By analyzing historical data, market trends, and external factors, organizations can now proactively identify risks such as stockouts, excess inventory, and supply disruptions which will help the supply chain to be the backbone for growth and scalability.
A Gartner survey revealed that 82% of CEOs in supply-chain-intensive industries plan to increase investments in digital capabilities across their enterprise. I would say it is coming at the right time as now we have the technologies to boost the advancement and bring the required operational support for automation, scalability, and growth. Be ready for a successful digital transformation with the right technological support.