Digital Supply Chain Conversion: Pros & Cons

There is a considerable push throughout the supply chain to integrate more automation into the workflow. This includes everything from installing robotic equipment such as cobots to streamlining order fulfillment through automated and cloud-based platforms.

Shippers from all around the globe are always finding more creative ways of digitizing the movement of their freight.

Companies who choose to do this on a more robust scale integrate this technology in a way that digitizes their entire supply chain. Moreover, that is the very concept behind this process: converting all supply chain functions into a digital format.

When a company takes this proactive measure of improving the efficiency of their supply chain functions, mistakes are reduced, files are easier to locate, communication is improved, and most importantly - money is saved.

If you are considering swapping out your old supply chain support equipment to a fully digital supply chain platform, it is always better to learn to walk before you run.

In this blog post, we will outline the biggest pros and cons of taking a slower approach to digital supply chain conversion.

What is a digital supply chain? 

In layman's terms, a digital supply chain is a complex series of support equipment, software solutions, and data-driven platforms. It's a rather new type of logistics management that allows companies to keep all their resources, reporting platforms, and other essential tools in one easy to access, and highly secure, digital platform.

Furthermore, a digital supply chain helps to reduce a lot of the mistakes typically caused by simple human error. With this type of platform, the excuses of “my dog ate my homework” becomes rather null and void.

The digital supply chain, by default, features a ton of additional resources and other tools that help shippers fine-tune the shipping process. Best of all, it does so in the most efficient and cost-friendly manner possible.

A lot of those additional resources include things like the use of wireless sensor technology, blockchain solutions, GPS tracking software, and much more. When combined, this system allows the shipper to review data in real time, and improve communication with distributors, drivers, and most importantly, their customers.

It should be understood, though, that there are two different types of digital supply chain activations. There is a part-time and full-time methodology.

A part-time digital supply chain is the integration of digital platforms on a scalable term. Conversely, a full-time digital chain is a robust, all-inclusive swap over of everything online.

There are some advantages and disadvantages that come with each type of digital supply chain.

Understanding the pros and cons of a part-time digital supply chain 

So, you're considering digitizing your supply chain, but you just can't seem to shake a few of your concerns.

That's completely understandable. The costs involved in such a massive overhaul can make anyone a little nervous.

The good news is that you don't have to do convert all of it at once. You can do as most companies do; start small and build up over time. There is no need to rush the process as it is one of the best investments you will make in the next few years. We recommend starting with a part-time digital supply chain and going from there.

To help you make better sense of all of this and put things in perspective, let's look at the pros and cons of a digital supply chain.

Pros

It saves money initially 

By taking a scalable approach, you reduce the amount of investment capital required, which improves your bottom-line profits on a quarterly basis. 

It's easier to train employees

Anytime a company makes a huge leap of faith and makes a robust change in the tools and equipment they use daily, training often becomes much more complicated. However, if you integrate these things slowly, you give your employees time to absorb the information. It is much easier to learn something that was recently introduced and still fairly new than it is to learn something that is massive, complex, and matured.

Start with the basics, let your employees understand the concepts fully, and then introduce a new piece of the puzzle. Furthermore, every new lesson will be useful in some way to the next piece of equipment or tool they learn to use.

Allows you to evolve as technology does

It seems that every year a new tool, software solution, plugin, patch, upgrade, or new technology is introduced. Integrating digital technology to your supply chain operations can reduce the need to constantly update your tools or find fixes for random occurrences.

Most of the time, the platform itself will make upgrade recommendations for you. All you have to do is decide whether or not to upgrade your platform.

Cons

Competitors gain an advantage

NFL head coach Bruce Arians is quite fond of using the term “No risk it - no biscuit.” The truth of the matter is, if you don't take the calculated risk of converting your supply chain management to a digital platform, one of your competitors will. That's just a fact. 

In a fiercely competitive industry, this is a fatal mistake. You've got to get it up and running before your competitors. However, you also need to get it installed, learn how to use it, train employees on it, and so on. It can take quite some time to become fully efficient with a new software solution.

A bit of a double-edged sword, right?

Kicking the can down the road

Some business owners who believe that taking things slowly is not the best approach to remaining competitive in business. So they try to kick the can down the road as hard as they can. This is a horrible approach.

While doing this may result in the company being the big dog in the room, it won't last for long. As mentioned above, you need to be efficient with your tools. If you have not dedicated the time needed to learn your tools inside and out, all the fancy software in the world is not going to save you all on its own.

Taking a slower approach often results in better management and mastery over the tools in your arsenal. 

Final Thoughts

The key to integrating any new software or management solution is communicating with experts in the industry who have been there and done that. Seeking the advice of an experienced 3PL that specializes in digital supply chain management solutions simply makes sense.  

With a solid track record, Redwood Logistics has the experience, knowledgeable staff, and most importantly the practical use of these tools to prescribe a digital supply chain process that makes sense for your company.

Whether you take it slow and low or go full throttle, Redwood can equip you with the knowledge and support you need to get your new digital supply chain up and running!