5 Steps Toward Digital Supply Chain Management

This post comes to us from Adam Robinson of Cerasis, a top freight logistics company and truckload freight broker.

The digital supply chain is basically a term that defines a supply chain whose foundation is built on web-enabled capabilities. At the moment, many systems are hybrid, meaning that supply chains normally use a mix of paper-based and IT-enabled processes. In its definition, real or true digital supply chain management goes beyond the conventional hybrid system and makes use of connectivity, system integration, and the information-producing capabilities of its key components.

In essence, digital supply chains aim to minimize waste and bring greater profits, whilst being a truly efficient system. Just remember, like asking for writers’ help to minimize the waste of your time, such a system will bring about benefits — like savings in basically every area, meaning better utilization of time and money, not forgetting a drastically reduced environmental impact. Unrivaled efficiency and better client connection will be realized by the employment of technology to aid the functionality of such a system. Examples of such technologies are GPS tracking, barcodes, radio frequency identification (RFlD), smart labels and wireless sensor networks. In such a setup, performance and data security are key, and, as such, cloud technologies working with web services to provide efficient collaboration and trade partner visibility.

In the course of operation, the business is exposed at multiple points across its stages of supply chain. Complexities are evident even in highly integrated organizations, which can have thousands of suppliers, with the range of transactions making it really difficult to track what is being supplied and when, making supplier risk management limited. With such a situation, there is poor visibility of risk areas, and the impact of such if not properly handled poses a threat.

Below are the easy steps that will help one take a relatively easy and flexible approach in making your digital supply chain management balanced and resilient. The result will enable companies to have a fully modeled network that helps you deal with disruptions in the supply chain, even anticipate them. It will enable adjustment of the system as conditions change, making it flexible and adaptable.

For a truly successful transformation of the existing system into a digital one, development of an orderly process to implement and integrate the necessary technologies is key. This is to avoid unnecessary delays and interruption in the delicate process of upgrading an existing, operational system.

Follow these steps for digital supply chain management

1) Understand your starting position and the risk involved.

This is the very first step. It is important to realize the current situation of the supply chain, what risk each supplier brings, and assess feasibility. The significance of each potential risk is weighed, and you have to formulate solutions on how such possible complications can be offset. Once you properly understand the risk involved, it becomes much easier to take proactive steps and set up preventive frameworks in a timely manner.

At this stage, you will assess the maturity of your suppliers and the overall risk posed.

2) Define your strategy and be open from the outset.

At this point, you will have known about the effects of potential changes, and you then encourage dialogue with the business entities involved and create a comfort zone where they can be honest with the common goal that you want a system that will benefit both sides. The use of dialogue will show inclusiveness and build the existing trust and confidence between you and your business partners. This exchange will also shed some light on what is likely to work for both sides and provides the basis for how the foundation should be set.

These early discussions will also ensure that the digital management system will suit your needs and the needs of the suppliers and other business partners. At its core, it is a system that will not be a square peg in a round hole. Understandably, suppliers will be concerned about the risk of losing you as a client if they voice concerns and potential risks. Therefore these initial discussions are critical, as they put everyone at ease and are all-inclusive. The suppliers will also broaden your idea on what the system needs and what components need to be in place for it to be a resounding success.

3) Have a sustainable, long-term approach.

Have measures in place that will aid your system in the long term. Take proactive steps to ensure system stability over time and in varying business and financial conditions. A reactive approach is susceptible to interruptions, delays, and, at times, system shut down. This cautious and forward-thinking procedure safeguards your business from such unnecessary unpleasantness.

It is important to realize that the incentive to save money can prompt individuals and organizations to introduce measures that pose significant risks whilst focusing on the short-term benefits. It is, therefore, very important to cover all bases and see the bigger picture, as sustainability is a core value of all good business entities.

4) Conduct proper research and analysis.

A good supply chain is resilient and delivers the desired and expected returns. It is therefore of vital importance that you invest time in supplier analysis. Set up a contract with proper knowledge of just how aware your suppliers are of the potential risks involved. As much as suppliers are expected to do their own risk analysis, it doesn’t mean that they necessarily are.

All questions about expectations and mutual obligations should be answered by this point.

5) Segmented roll out and capability development

After the digital supply chain management system has been formulated, it is brought into action in phases, employing all the various insights acquired. A pilot project is set up and its success reviewed. After a successful pilot, the roll out should start with those supply chains where expected returns are the highest to ensure maximum returns right from the start. It is important to note that system capabilities will be expected to evolve over the course of the roll out due to the dynamic nature of today’s business environment.