A Quick Guide to Mastering Digital Transformation in Supply Chain

A supply chain is a huge part of any product-based business. It includes:

  • Sourcing raw materials, 
  • Delivering the finished product to the customer, 
  • Everything between. 

To keep stock levels in line with demand, there are a lot of key components that need to run efficiently.

Traditional methods of managing supply chains have been great for the industry overall. But, increasing demand is putting pressure on supply chains. The supply chain market is growing. In fact, it’s risen from $15.85bn in 2020 to 21.95bn in 2023

We’re in a consumer’s world. People want more products, and they want them quicker. There are other hurdles, such as cross-border legislation and taxes, to consider. To overcome these hurdles, many businesses are looking at digital help in their supply chains.

Free to use image from Unsplash

Technology has been improving businesses for a while now. This is the case in many parts of business, such as a call center management system or email automation. Therefore, transforming the supply chain is the next logical step.

But how do you master the changeover and make sure it’s done well?

What is digital transformation in the supply chain?

In the past, supply chains have been paper-based with some IT support. Whilst this has worked well in the past, any disruption can lead to costly delays. Making supply chains more efficient can improve profitability. This is because technology can manage data more efficiently.

Of course, mastering digital transformation isn’t easy. You’ll need to completely overhaul your current systems. This means using automation and electronic data exchange at each stage of the supply chain.

Some of the key areas this includes are:

Different businesses will have unique supply chain needs. Here are some of the general forms of technology to think about: 

  • The Internet of Things.
  • Cloud-based computing. 
  • Big data analytics. 
  • AI and bespoke software development.

Why should businesses make the switch?

Up to 79% of businesses with good supply chains achieve above average revenue growth. 

Digital transformation can help improve the entire supply chain by solving problems. These may include, inefficiencies, stock shortages, and long lead times. But, it’s a way of providing the best service to your customers. This puts your brand ahead of the competition by being innovative and forward-thinking.

Automated systems leave less room for human error. Using the IoT to undertake tasks such as product inspections and stock checks can save time and money. It can also help to streamline the whole supply chain process and improve accuracy.

Digital supply chains produce a lot of data which would be impossible for humans to process. AI and ML (Machine Learning) can analyze big data. This provides valuable insights so leaders can make better decisions.

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A digital supply chain can help businesses reduce waste. Digital supply chains operate in real-time. They use data from the entire supply chain to meet production and distribution demands. More efficient systems can also be better for the environment as the process is more streamlined. 

What are the barriers to mastering digital transformation in supply chains?

For many companies, it’s a daunting fear of change coupled with a lack of understanding of how to make the transformation. The old proverb ‘if it ain’t broke don’t fix it’ is quite relevant if current systems seem to be working okay. 

The initial cost of making the switch is also a barrier for many businesses. The technology and machinery needed to make your supply chain digital is going to be costly. On top of that, there is the cost of upskilling your workforce.

When considering the initial investment, you should also model the cost-saving benefits that you’ll see in the long run.

How to master digital transformation in the supply chain.

Each business will have different needs when it comes to improving a supply chain. This quick guide will give you some key steps to take when mastering digital transformation in your supply chain.

Be clear on your vision

Knowing what you want to achieve from digital transformation is a key step. For success, you need a clear outline of your goals and everything you want to achieve.

The vision should align with your company goals and be part of your forward drive for positive change. This could be profitability, efficiency, customer service, or decision-making. Whatever your goals are, they should be a key focus in 

Remember, without a clear vision, it’s impossible to know where to put your focus.

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Understand your current systems

Identify where the current problems lie. Then compare how your current systems compare to industry standards. This will help you plan where improvements could be made. This can help you to set supply chain management KPIs that can be used to plan and measure improvements. This should help you to see how technology can help improve desired metrics.

Recruit the right people

A chief technology officer (CTO) with digital supply chain experience and knowledge can help bring together the right team of people. This could include technology partners with specific areas of expertise. It may also mean finding the right software providers or working with contractors. A CTO should oversee the project with your needs in mind.

Having someone to oversee the project also means there will be a person to hold accountable. This could be for timelines and progress reporting.

Vendors or contractors used should come from a reputable source such as Goodfirms. You can also check reviews to see which providers offer the best service.

Create good communication channels and leadership 

Digital transformation in supply chains involves bringing together a lot of people. This includes stakeholders, departments in the business, and external contractors. Establishing good communication channels early ensures everyone is on the same page. For example, a cloud contact centre platform to improve communications. 

Strong leadership is an essential part of mastering a successful transformation. A good leader should inspire and motivate teams to welcome positive change. This can be done by ensuring staff have the training, knowledge and skills to make for a smooth migration. Communicating all goals and objectives during this process, is also essential. 

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Use data and analytics

Real-time supply chain data is essential for making decisions. AI-powered analytics tools can help improve planning processes. This is because they provide important insights into how well the supply chain is performing. It can also flag up any potential problems or disruptions.

With the popularity of Scarcity marketing, demand can fluctuate. This means data patterns are important when mastering digital transformation in supply chains.

Automate the planning process

Automating the planning process can simplify and speed up some of the more repetitive and mundane tasks. Whilst automation can’t replace many of the complex problems that need human thought, it can provide high-quality data. This can help provide the data needed to solve these issues.

Get the right tech in place

Having the right technology will make or break the success of your digital transformation. Your business requirements are unique but they’re not static. So planning for your business needs must also consider your short-term, medium-term and long-term plans. Any digital systems you implement should be scalable.

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Take it one step at a time

You don’t have to migrate all systems over at once. Similarly, not everything needs to be operating flawlessly before you begin the transition. As you identify problems, you can address them and improve systems. For example, what can you do about a poor lead time on popular products?

As you improve smaller elements of the supply chain, you can inch towards digital transformation. This is because you’ll have a stronger supply chain to work with.

When you make a slower transition, you can work on creating a culture of change. You’ll be spending less time building employee trust and creating an environment where people are not afraid to make mistakes.

So, what now?

We all know that we have to move with the times. We are in a digital age where electronic change is happening in most areas of our lives. It’s a fair assumption that on the whole, digital transition has benefitted us in many ways. If you’re in a supply chain company, it’s no different. 

Technology helps businesses meet many key objectives. These include; cost-saving, efficiency, professionalism, streamlining, consistency and accuracy.

To get started you’ll need to analyze current systems. Then do some thorough planning. Then, implementation with the right teams in place should put you on the right track. Once that’s accomplished, there’s no reason why your business can’t master digital transformation in your supply chain. Then, start realizing the benefits.

So, what are you waiting for?

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Article by:

Sharline Shaw

Hey I'm Sharline, the founder of Leeline Sourcing. With 10 years of experience in the field of sourcing in China, we help 2000+ clients import from China,Alibaba,1688 to Amazon FBA or shopify. If you have any questions about sourcing , pls feel free to contact us.