Supply Chain Digitization: Improving Procurement and Delivery Systems
What is Supply chain digitization?
A supply chain is a process that begins with the procurement of raw materials and ends with the delivery of the final product to the customer. It involves the workforce, schedules, tasks, organizations, resources, data, and any other factor involved with these stages.
Logistics is one of the most significant aspects of supply chain management. It ensures the integrity of distribution channels. Businesses not only strive to optimize it, but they also lower the costs involved.
The onset of supply chain digitisation with Industry 4.0 is enabling companies to do precisely the same.
The fourth industrial revolution or Industry 4.0 is the utilization of state-of-the-art technologies in the manufacturing sector. Some of these technologies that industries are implementing include artificial intelligence, cognitive computing, cloud computing, industrial robotics, and the Internet of Things (IoT).
Manufacturing businesses that follow Industry 4.0 attributes are known as “smart factories”.
Supply Chain 4.0
Industry 4.0 is bringing the digitization of the supply chain for manufacturers and suppliers. Also known as Supply Chain 4.0, it will deliver:
The implementation of automated guided vehicles, automated sorters, robots, and other technologies are already creating the need for a smaller workforce for the same productivity. The manufacturing and logistics sector was the first one to experience this shift.
Not only warehouses but commercial drones and autonomous vehicles that are working outdoors are all set to bring efficiency and cost-cutting in distribution channels.
Supply Chain can also be used as a cloud-based virtual service that businesses can avail on demand. Instead of developing a supply chain themselves, a company can buy this service on a usage basis.
The new supply chain thus provides flexibility when faced with changing demands. Businesses also won’t have to invest time and money on planning, which will continuously adjust to rotating needs.
One of the primary focus areas of Supply Chain 4.0 is increasing distribution and delivery speeds. Artificial intelligence will help systems determine patterns in consumer demands by analyzing micro and macro-economic factors. A smart supply chain will automatically ship products to a customer even before he/she places an order.
- Risk management
The new generation of the supply chain will have the power to analyse targets and implement only the ones that are realistically possible to achieve. These systems will also determine any risks involved and take preventive steps to counter the same.
Benefits of Supply Chain 4.0
- Makes the management of supplier relationship more effective and less complicated.
- It will make the supplier selection process more efficient and time-saving.
- Businesses will get to track delivery tracks more accurately with transparency and traceability.
- More effective communication between collaborators to create a better buyer-supplier relationship.
Supply Chain 4.0 can bring a revolution in its management. According to PwC, 1/3rd of 2,000 respondents have already started to digitize their supply chain.