2016 was the year of the digital supply chain — here’s a look at how things changed.

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

2016 marched onward with a drive to improve the use of digital technology throughout the supply chain. In our first supply chain trends post, we surmised the previous year’s trends would continue. However, this prediction proved to only touch on how important the digital supply chain would become.

Within four months, the digital transformation had already reached most supply chain organizations. Per GT Nexus, 75% of executives surveyed recognized the digital supply chain as an important factor for the next five years. Meanwhile, 70% have also started processes to implement digital supply chain technologies throughout their companies.

Unfortunately, many supply chain entities continue to hope for a better tomorrow. In other words, the digital supply chain transformation has only been rated as very satisfying for 5% of respondents. In addition, just less than half (48%) of respondents report continued use of traditional technologies exclusively, which include the following:

  • Fax machines
  • Manual order entry and review
  • Land-line phones, not voice over internet protocol (VoIP), which reduces overall costs and downtime
  • Email, although beneficial, is susceptible to internet connectivity issues, security breaches and other problems
  • Chaotic picking protocols

This infographic, created by GT Nexus, also shows other ways the digital supply chain evolved in 2016.

state of digital supply chain transformation

Essentially, the digital supply chain is essential to gaining and maintaining competitive advantage. Digital technologies, reports Richard Howells of Forbes, including Big Data, analytics, the Internet of Things, social media, and point-of-sale reporting, enable business to know more about consumer needs and wants than ever before. Consequently, they can more accurately respond to changes in product demand across large distances and within infinitesimally small time frames.

Supply chain execs retained fundamentals throughout change.

Innovation is the driving force behind change and improvement in the modern world. Supply chains must evolve to meet an increasing number of omnichannel sales, and technologies must be integrated within existing systems to reach maximum efficiency and productive value.

As explained by Grant Marshbank of VSC Solutions, “The rate of change is not going to slow down. Technology will only delivery […] if it’s implemented with strategy and operations that adhere to best practices.”

Marshbank’s words highlighted the need to focus on fundamental concepts while responding to changes and improvements in the supply chain. For example, an optimized supply chain is good, but it opens more opportunities for errors. Simply putting all an organization’s proverbial eggs into one basket may be risky if appropriate auditing and review measures are not undertaken to ensure continued compliance and accuracy in all orders.

Change is a necessity for businesses, including the supply chain, to grow and expand. Yet many destructive forces can severely undermine a company’s progress. Bad weather, poor hiring practices or inefficient maintenance of consumers’ financial data can decimate a company. However, the response to hindrances in 2016 continued to showcase the importance of fundamental concepts, asserts Ryder, which include the following:

  • Continually seeking the fastest, most cost-effective means of transporting products to consumers, including enhanced delivery optins.
  • Expansion of global footprint while adhering to local, state, federal and international requirements
  • Keeping companies accountable and focused on giving back to their domestic partners through reshoring or nearshoring
  • Working with more outside agencies, also highlighted by Samantha Carr of Business 2 Community, including crowd-sourced logistics, warehouse optimization and outsourcing, and greater use of cloud-computing

Augmented reality found its place among consumers.

Augmented reality sounded amazing and far-fetched early in 2016, but the year has shown it to be one of the most successful product in existence. There tends to be more acceptance of technologies in the workplace once consumers can identify how they work.

For example, new hires are likely to pick up tablet-based systems more easily since they have been using them recreationally for some time. Essentially, the virtual-reality (VR), which is the precursor to augmented reality, hype of the 2016 Christmas shopping season is making more people excited about this new way to “see the world.”

While the VR hype may seem like it only emerged for Christmas, think about one of the hottest games of 2016, Pokémon Go! This app was built on augmented reality, combining the digital and physical worlds into one interactive environment. This technology, reports JOC.com, will be a key to practically eliminate extensive training courses and repair time requirements throughout the supply chain.

Ultimately, it translates into greater use of augmented reality in supply chains, which is growing by 100% annually, reports Barcoding Incorporated.

What’s next?

Clearly, technology dominated the conversation for 2016, but there are also changes in how supply chains operate that require a more in-depth discussion as well. In the next post of this series, we discuss the impact of artificial intelligence, agile processes and procurement expansion on the supply chain of 2016.

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