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Digitize Your Supply Chain for Better Efficiency Featured

Digitize Your Supply Chain for Better Efficiency "Vivid Sydney"

The supply chain is undoubtedly one of the most crucial parts of any business. For this reason, most executives believe that getting the supply chain right will translate to better supply chain costs. This is not an easy task considering the supply chain is a series of discrete siloed steps that are taken through marketing, development, manufacturing and distribution of a product to the hands of a customer. However, with digitization, the siloes are broken. The chain becomes an integrated, transparent ecosystem for each player, from raw material suppliers, components suppliers and transporters of finished products to the customers who demand fulfillment.

Supply chain ecosystem

In most companies, there is a standardized process used to deliver products to the customers. On the other hand, marketers analyze the customer demand and try to predict the sales of the coming period. With this information, manufacturing orders raw materials, components and parts for the expected customer demand and capacity. On the other hand, the distribution is responsible for accounting for the changes coming down the pipeline. They tell customers when to expect their products or shipment. If everything works as desired, the gap between demand and supply should be small.

Digitization of supply chain

Supply chain digitization or digital transformation of the supply chain is the process of turning analogue supply chain processes into digital through establishing dedicated master data that aggregates information from across the entire supply chain and information from other external sources.

Supply chain digitization is attained with software, which can be box-to-box, custom-made or a combination of the two. The focus of digitization and business intelligence.

Advantages of digitization of supply chains

The digitization of the supply chain can significantly influence the success of your business, regardless of the industry. According to the survey, more than 85% of business executives expect digitization efforts to enhance cash flow and reduce outstanding sales. On the contrary, failure to digitize the supply chain can increase the cost of operations, which is associated with entering data in invoices from suppliers. Failing to digitize supply chains can cost more than $1 million as a cost of manually entering data into ERP and information systems and an average of $600,000 per year in entering invoices.

Some advantages of digitization include:

  1. Reduction of manual tasks

Automation of supply chains reduces manual tasks and the burden of administrative work that takes a lot of time and effort from your team. It frees employees for other urgent tasks that may go unattended if manual methods are used. It allows everyone to focus on areas they are good at. Furthermore, automation reduces human error leading to the gaining of revenue that could have been lost from errors. With automation, processes such as invoicing are sped up, allowing faster payment.

  1. Automation keeps things cohesive

If your organization still relies on spreadsheets and email threads to inform decisions, you have been left behind. Using those semi-manual systems slows down processes, hurts efficiency and leaves room for human error. Supply chain digitization creates opportunities and helps connect disparate systems. This eases communication across organizations and creates one source of truth.

  1. Enhances decision-making

In the supply chain and logistics sector, decisions must be made in time and as agile as possible. Digitization of the supply chain allows data to be gathered in massive amounts, organized within a short time and make decisions that can ease operations. Information collected from different sources can be processed quickly and used to build strategies and plan for any scenario. Using real-time information collected from a digitized supply chain can lead to massive payoff in the improvement of customer experience, increasing sales and minimizing waste.  

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Scott Koegler

Scott Koegler is Executive Editor for PMG360. He is a technology writer and editor with 20+ years experience delivering high value content to readers and publishers. 

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