The digital age has undoubtedly transformed the way we live. In its most basic form, digital transformation is about the modernization of the people, processes, and technology that propel a business forward. In the retail industry, for example, digital transformation means building mobile apps for shopping and offering mobile payments to adapt to changing consumer demands. While some industries have been quick to modernize, large, multi-national shippers are struggling to embrace the digital transformation and catch up to their nimbler competition.
For transportation companies and enterprise supply chain executives, developing and executing a digital transformation process requires the resolve to modernize decades old processes, including transportation management, dispatch, inventory and supply chain management. The entire supply chain, including visibility, will be affected by digital transformation – it’s no longer a question of if, but when. The real question has become will the supply chain lead the digital transformation or will it be stuck playing catch up to the other functional business groups within the enterprise?
Current issues in supply chain visibility
At every point in the supply chain, shippers, suppliers, warehouses, producers, distributors, and customers expect to know exactly where a shipment is. There are disparate technologies and solutions that can provide a level of visibility, however, few extend across the full, soon-to-be-digital supply chain. Most solutions leverage proprietary hardware and software, which means adding yet another application to a growing supply chain technology stack. A core tenet of a supply chain digital transformation is aggregating and simplifying access to and utility of key visibility and orchestration data. Real-time tracking, as well as tools to manage and prevent exceptions throughout the supply chain, must be a crucial cog in the digital transformation wheel.
How business leaders can make the transformation
Gartner estimates enterprises will allocate 20% of enterprise digital transformation costs to the supply chain. Separately, Gartner revealed that “visibility or event management applications” is a top three priority for enterprise supply chain executives for 2017.
In order for the digital transformation to be a success, business leaders need a step-wise approach. Transportation and logistics executives must look to cloud-based partners that will help them build a unified, enterprise-grade system stack that shares information openly, provides a 360-degree view of a customer and business processes and uses predictive analytics to make changes in real-time.
There is a strategic hierarchy of visibility; one that starts with synchronization, followed by collaboration and ultimately, digitization. Enterprise supply chain teams should consider this visibility journey and honestly assess current state and future state, as well as the logical path forward.
Synchronization centers on standardization and consolidation, both in terms of physical assets as well as the processes and data model that is leveraged throughout the supply chain. The result of better synchronization may be a fracking company getting the right cement and other materials to oil and gas job sites and facilities on short notice in remote corners for the globe. The same holds true for electronics manufacturers who need all the right components to keep the products consumers want coming off of the manufacturing line.
Collaboration goes a step further, but builds on synchronization. Specifically, it’s the ability to integrate disparate internal and external systems, extend processes across a full ecosystem of partners, and proactively communicate to manage supply chain exceptions, possibly even preventing them in the first place. Imagine, for example, an electronics manufacturer being able to communicate to retailers hours in advance that a shipment moving merchandise will arrive behind schedule so the retailer can adjust loading dock staffing accordingly.
Digitization is the final frontier and blends both synchronization and collaboration into an insights-driven supply chain where predicative analytics and system-based orchestration prevails. More specifically, in a digital supply chain, enterprises can control and can proactively manage a full eco-system level visibility solution where proactive, and data science-driven prevails. For example, imagine a manufacturer who can predicatively know when inventory levels are running low at distribution, match that information against real-time retailer data and proactively initiate a workflow to replenish that inventory through the entire supply chain.
With digitization, the linear supply chain model will transform itself into a supply chain ecosystem, with full transparency, collaboration and communication between all partners. When the digital transformation is complete, all parts of the supply chain will rely on a single, open, flexible, and agile system of record. Now is the time to get started.