Why is Supply Chain Digitization So Important?

Supply chain digitization is when supply chain management processes that were previously done by hand are migrated to software. When the entire supply chain process is brought under digital control, it is called a “digital supply chain”.

A digital supply chain may consist of a stack of complementary off-the-shelf software solutions, or a single customized system.

Supply chain digitization is quickly becoming an industry standard because of its many clear advantages; it gives greater resilience to the supply chain, makes companies more competitive in the market, creates a more sustainable supply chain and business model, and allows for greater end-to-end visibility.

Ultimately, all of these advantages lead to greater efficiency, happier customers, and greater profits. Join us as we go into greater detail as to why supply chain digitization is so important to your business.

Greater Resilience

Increased resilience comes from having greater data at hand. Digital systems can alert the logistics department to blockages or delays at the manufacturer before they become critical. They can provide both accurate weather forecasting and faster response times needed to reroute shipping to avoid delays due to extreme weather.

Supply chain digitization also lends more resiliency to the business itself, a transparent and easy-to-use digital system (rather than mountains of paperwork and contact lists of phone numbers) makes it easy to quickly train new staff as others move on or retire.

Competitiveness

Time is money, and in the logistics business, this is amplified even more. Saving labor hours on paperwork means that those human resources can be put towards more value-added work like managing more contracts and expanding your reach. Greater data awareness will prevent unexpected delays, saving you money and keeping customers happy.

A digital supply chain can open up opportunities to find faster or less expensive carriers and routes alike. By increasing efficiency (perhaps incrementally, possibly exponentially) at every stage in the supply chain, you will save time and money.  The cumulative effect of this increased efficiency will allow you to provide a better service at a better price, all with a greater margin.

Sustainability

Extreme weather, trade wars, sanctions, technological innovations, recessions, and other unexpected changes can knock out a route or manufacturing base, and even change the entire landscape of an industry very quickly. Supply chain digitization provides greater flexibility, which will keep your business sustainable over the long run. Software systems will enable you to find new routes and suppliers in response to events, and a digital supply chain can be upgraded more easily to respond to disruptive new tech innovation.

World events will continue to bring surprises, but the need for robust and sustainable supply chains will only continue to grow.

Better end-to-end visibility

Modern supply chains cover multiple suppliers and manufacturers, different national jurisdictions and time zones, and various shippers for long haul, first mile, and last mile delivery. The system is already so complex that some degree of digitization is needed for logistics suppliers to maintain any sort of visibility. A smooth-running digital supply chain gives logistics professionals the power needed to stay on top of these complex systems.

Track your manufacturing processes in Asia through software rather than phone calls in the middle of the night, view the status of your paperwork online, track route closures and delays in real-time and communicate instantly with your team to reroute ahead of time, and confirm last mile delivery just by looking at the dashboard.

Supply Chain Digitization is Critical to Your Supply Chain Success

Creating a fully digital supply chain will take some time, and the process will be unique to your own business and future needs. Most likely, parts of your supply chain are already digitized, even if others still require manual work and paperwork. How you go about the process of supply chain digitization will also depend on what digital systems your partners already use and they will be able to integrate; the strength of your digital supply chain will come from its use in the real world, and for this to happen all parties will need to be brought on board.

Your business may be able to realize the benefits listed above by simply employing the right supply chain optimization software. If your needs are more complex, you may want to work with a developer to create a custom system in-house or bring several software solutions together into one package.

Regardless of how you ultimately go about supply chain digitization, a robust digital system is a must in today’s world. The increased resilience, sustainability, and visibility will set you on track to realize even greater gains in the future.

Ready to implement digitization across your supply chain but need help getting started, or already have a digital footprint but it's not integrated efficiently? Redwood can help, reach out to us today!