Technology and Supply Chain Digitalization

March 15, 2023

Now is the perfect time for supply chain digitalization. The pandemic added a lot of volatility to global supply chains that already were volatile and unpredictable. Since then, the market dynamics have intensified.

For starters, the pandemic exacerbated the employment situation. Today, logistics jobs remain unfilled. And many companies are struggling to find employees with the requisite skill sets. (CSCMP Supply Chain Quarterly, Q3, 2022). Nonetheless, many companies are turning to technology to fill the skills gap.

Next, digitalization is still in its infancy, according to the CSCMP survey. Only 31% of 300 survey respondents are implementing or deploying digitalization programs.

That said, 93% of companies are pursuing digitalization in varying degrees. That means while actual implementation is only beginning, most of the industry recognizes the value of digitalization.

The logistics industry is at a crossroads. Businesses recognizing that can prosper by seizing the digitalization trend early.

But you shouldn’t digitalize your supply chain for the sake of doing so. No business, large or small, has the budget for that. Smart IT investment for the future requires direction and focus.

In terms of utility, you should focus on customer service, the market climate, and your budget. By following this plan of action, you can increase the chances of modernizing your supply chain. We’ll call this a purpose-driven approach to digitalization.

Taking a purpose-driven approach means considering the digitalization of routine business processes. It also means preparing for non-routine events, such as peak season. Finally, it means transforming your supply chain to deal with a persistent and heightened-risk environment.

Without further ado, let’s start with the transformation of routine business processes.

Digitalize Routine Business Processes.

To remain competitive, supply chains must adapt to the New Normal because business has changed. Supply chains must be more responsive, customer-centered, and risk-capable.

At the most basic level, you have an opportunity to optimize processes like never before. The impetus for change exists. It’s time to address your supply chain gaps from end-to-end (E2E) from your suppliers to your customers.

That change in view replaces siloed thinking, which prevented optimization. Siloed thinking and processes led to suboptimization. Now, the industry has the tools and technologies to support a strategic view that enables optimization.

Transforming your routine business processes also means looking for ways to reduce costs and achieve sustainability. That can mean several things.

Cost reduction entails meeting customer expectations efficiently. That’s not to say you’re not only focused on reducing costs. That’s old thinking. Today’s approach calls for taking a customer-centered approach and working backward from there.

Digitalization is also ideal for building-in sustainability. Incorporating a system built for the long term that considers compliance with legal and regulatory matters will ease the burden of pivoting from existing operations to future operations.

With ESG (environment, social, and governance) on the rise, digitalizing for these factors makes compliance easier.

The lesson here is to prepare for the future, not just today, through supply chain digitization.

Supply Chain Digitalization for Peak Season.

As you transform your business processes, you must think beyond the routine. Remember, supply chains operate in more than one environment.

Peak season is a good example of how your supply chain must adapt to seasonal changes. Those changes could be wild swings, or they could be more manageable.

Thinking about how to smooth out seasonal changes can make a tremendous difference to your resources. You have an opportunity to optimize your employees, your processes, and your budget.

You can further optimize your resources, supply chain digitization will allow you to better manage seasonal swings.

Again, starting with your customer, look for ways to enhance customer satisfaction with technology.

Providing visibility into orders encourages engagement. An improved returns process, for example, can also deliver greater customer satisfaction. And open communication fosters transparency in your operations.

All that makes peak season much easier to manage. And increasing flexibility to accommodate peak season is a great opportunity. But that’s not the only reason.

Digitalize to Enhance Supply Chain Risk Management (SCRM).

As stated above, the business environment has changed. Now, too, how you conduct business must also change. You must change to stay relevant and responsive.

In particular, that pertains to how you manage supply chain risks. Risks today are more frequent, more destructive, and more costly. Therefore, you must bulletproof your supply chain E2E and in-depth.

The simplest way to do that is to automate for threat protection and mitigation. It’s not the only way. Digitalizing for enhanced SCRM is a powerful way to bulletproof your supply chain.

You ought to focus on integrating and synchronizing lateral and horizontal communication. That means broadening communication internally and externally to your suppliers and your customers.

That’s not easy to do. But introducing automation to help enhance communication is well-advised.

Another way to enhance SCRM is to enhance your supply chain security. Now is a fitting time to address cyber security threats to your supply chain.

Like other supply chain risks, cyber threats are on the rise. And they're more devastating and costly.

According to Cybercrime Magazine, the costs of recovering from cyberattacks are staggering. By 2025, the costs of recovery are projected to be about $105 trillion annually.

Defending against cybercrime alone should make it worthwhile to digitalize your supply chain.

Supply Chain Digitalization for the Future.

As stated above, the future is now. That’s true at least in terms of transforming for responsiveness and resilience.

Your supply chain must not only keep pace with technology. It must also keep pace with your competitors and your customers. Digitalizing strategically enables a networked supply chain, which fosters collaboration.

Furthermore, your supply chain must be flexible. That means building agility and resilience in your supply chain. Planning your network for routine business, peak season, and heightened-risk events will provide the flexibility you need.

At American Global Logistics, we’re all about reducing complexity and volatility. Taking a purpose-driven approach, we can help you optimize performance, reduce costs, and reduce risks. We strive to prevent, avoid, or mitigate disruptions.

Let’s jump on this digitalization trend together while it’s in its early stages.

Contact us to learn more about how we can help you can build a more responsive, customer-centered, and risk-capable supply chain.

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