Latest trends in Supply Chain Digitization & Automation
2021 was a highly challenging year for the Supply Chain Industry. The aftermath of COVID-19 can still be seen across global Supply Chains around the world. The event caused strong disruptions, even for the most resilient Supply Chains that were present. Smaller, less robust Supply Chains faced many problems that eventually often led to failure. The pandemic clearly showed the importance of having a strong Supply Chain.
According to K.P.M.G. (z.d.), in Europe, the rise of e-commerce is pressuring retailers, manufacturers, transport, warehouse and logistics companies to fulfil and deliver fast, in full, and meet high expectations for order status visibility, service and returns.
A trend that has risen within the Supply Chain industry is related to a shift in Customer Demands. In order to reinforce delivery assurance and Supply Chain resilience, customers (both B2B and B2C) now require end-to-end Supply Chains to hold more transparency, increasing their visibility. Greater visibility requires stakeholders in the chain to hold the same visibility in order to decrease disruption whilst monitoring for new ways to implement improvements. The key takeaway from this is that Supply Chains now require their physical and digital workflows to be more synchronized. The emphasis on greater visibility and transparency can be achieved through Digitalization and Automation.
Digitalizing your Supply Chain
With Technology growing faster than ever before, Supply Chains ought to incorporate the most important technological advancements to reinforce the resilience element of their Supply Chain. Digitalization can be achieved through many ways. First things first, what exactly is Digitalizing your Supply Chain?
According to Team D.F. (2021), Supply chain digitization (or supply chain digital transformation) is the process of turning analog Supply Chain processes into digital ones by establishing dedicated master data that aggregates information from across your entire Supply Chain, as well as information from some external sources (e.g. internal historical sales data, point-of-sale consumer data, socioeconomic data such as unemployment rates, and external data such as Google trends or competitor prices). This process is most commonly achieved through the use of dedicated Supply Chain Software.
The advantages of digitalizing your Supply Chain are:
Digital processes are far easier to connect with each other. This makes the entire process, whatever process it is, react much smoother. Analog processes are very difficult to align properly.
- Time saving/Efficiency
Digital Supply Chain processes are far more efficient, thus saving your time. Automatic inventory orders/updates for instance can save immense time when executed correctly.
- Decision-making advantages
Having better control of your digital data allows you to leverage your position when going into a new decision-making process. This aspect should never be underestimated as it allows for a much better negotiation position.
The next Trend expected to continue in 2022 is the increasing usage of Automation. Again, the increase of viable technological advancements also results in manual process to be automated. This can be easily seen through the increasing usage of AGV (Automated Guided Vehicles) that allow for immense efficiency increases in warehouses. Daunting manual labor that can be Automated (e.g., Packaging) should be automated as fast as possible as strong efficiency increases are easily seen when done so accordingly. According to Vanner (2022),
The benefits of implementing Automation include:
- The Automation of manual tasks
As discussed above, automating daunting manual labor yields the highest efficiency boosts as these tasks usually allow for strong process time deductions.
- Increasing Transparency and visibility
Automating tasks usually come with the innate ability to capture and share data from the process that has been automated. The process Data is often automatically captured and can then be configured to be shared or uploaded with a cloud platform or directly to the business internally. The increase in ease of Data access directly yields better Transparency and Visibility for the Supply Chain, in turn also increasing its resilience.
- Flexibility and Adaptation
Automating processes usually also provides companies the ability to adapt more easily to Supply Chain Disruptions. For instance, automated inventory management software allows companies to increase their control by automatically ordering key raw materials/inventory when the stock falls below a set minimum percentage. The configuration options provide strong control and flexibility to the company in question. It is often advised to also discuss this with the suppliers in question so they are aware of the potential order increases.
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Bendis, M. (2022, 17 mei). Industry 4.0: the digital supply chain. EasyStock. Geraadpleegd op 20 mei 2022, van https://www.eazystock.com/uk/blog-uk/digital-supply-chain-digitization/
K.P.M.G. (z.d.). Five supply chain trends to follow in 2022. Zetes. Geraadpleegd op 19 mei 2022, van https://www.zetes.com/en/supply-chain-visibility/supply-chain-visibility-software/five-supply-chain-trends-to-follow-in-2022.
Team, D. F. (2021, 19 augustus). What Is Supply Chain Digitization, and Why Does It Matter? DDC Freight Process Outsourcing. Geraadpleegd op 19 mei 2022, van https://www.ddcfpo.com/freight-process-insights/what-is-supply-chain-digitization-and-why-does-it-matter
Vanner, C. (2022a, februari 7). Supply Chain Automation: What is it and How Can it Benefit Me? Bizagi Site. Geraadpleegd op 20 mei 2022, van https://www.bizagi.com/en/blog/supply-chain-automation-what-is-it-how-can-it-benefit-me
Vanner, C. (2022b, februari 7). Supply Chain Automation: What is it and How Can it Benefit Me? Bizagi Site. Geraadpleegd op 20 mei 2022, van https://www.bizagi.com/en/blog/supply-chain-automation-what-is-it-how-can-it-benefit-me.