Emerging Trends Driving Supply Chain Digitization
In a survey conducted by SMC World, it was revealed that 67% of the respondents believed that supply chain digitization is going to be a disruptive and vital change for their companies. Only big data analytics elicited a more positive response rate.
Supply chain digitization is the next step in the evolution of the supply chain mechanism is a foregone conclusion. It’s not a question of ‘if’ but ‘when’. However, the question remains whether companies around the world are prepared for this paradigm shift.
Forbes Insights, in collaboration with Cognizant, recently interviewed nearly 500 leading supply chain officers where they found that a meager 9% of them have the necessary expertise and maturity to digitize their supply chain. A third of the respondents have some idea about the concept while almost 60% of these executives are not prepared to handle supply chain digitization by a long shot. The survey also found an element of inherent frustration, with 25% of the respondents not satisfied with the efficacy of their supply process.
Technology has taken over numerous aspects of daily human life. This rate of technological advancement is unmatched in human history. Supply Chain Management is one of those sectors which are primed to undergo fundamental changes due to technology.
The trend has already started. In the past 30 odd years, Supply Chain Management has transformed from an operational function under the purview of sales to an independent process in itself. Most successful companies have CSO level executives who run the show. The focus has shifted from logistics to advanced planning strategies like S&OP and analytical planning.
Admittedly, the transformation has been gradual and slow-moving. It started with the mechanization of Supply Chain. Computerized inventory and record-keeping followed. ERP (Enterprise Resource Planning) software was introduced even later.
However, the pace of change has picked up in the past few years. Introduction of disruptive technologies like the Internet of Things (IoT), Big Data analytics, and advanced robotics have compelled companies to rethink their Supply Chain strategies.
Emerging trends in supply chain digitization
Several trends influence the Supply Chain Management of a company. A detailed analysis of some of these trends to understand why Supply Chain digitization has evolved from a buzzword to a full-fledged reality in modern times is necessary.
Change in demographics is a key trend affecting Supply Chain Management. An increasing number of people are shifting to places that were not on the Supply Chain map before. Digitization can help map these emerging areas and help improve market penetration.
Increased awareness of environmental concerns is also a challenge for Supply Chain Management. Companies have to find ways to reduce their per capita emission to keep their carbon footprint, something which digitization can effectively control.
Customer expectations have also evolved with time. Consumers today are restless; they want things now. Personalised experiences, like the ones offered by online shopping portals, have opened up the minds of consumers to a new way of shopping. Any company that cannot keep up finds it challenging to cope in the highly competitive market.
In conclusion, the importance of supply chain digitization cannot be stressed enough. The sooner companies adapt to it, the better their chances of survival in this market.