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How Digitization Strengthens the Supply Chain



The introduction of new supply chain technology has fueled the digital revolution of logistics and supply chain activities. New goods, procedures, and services are being developed due to companies going digital.


The most recent advancements in logistics, including geolocation tools, warehouse management systems, drones, autonomous vehicles, and sophisticated automation platforms, may be successfully implemented by online firms of all sizes.

To facilitate new forms of alliances and agreements and maintain their competitiveness, e-commerce businesses must keep up with the fast digitalization of the supply chain landscape and adapt how they establish and manage partnerships with other entities in the supply chain.


Business leaders can use supply chain digitization to replace analog or manual procedures with digital ones throughout the e-commerce supply chain. To improve management, boost visibility, and expedite operations, the supply chain is being digitalized by integrating cutting-edge digital products and services into many areas.

How does it work?


By solving major issues and establishing a "supply chain 4.0" that is quicker, more accurate, efficient, and flexible, supply chain digitalization essentially aids in supply chain optimization.


Supply chain digitization typically covers three primary areas: data management, process linkages, and the use of digital technologies during the physical execution process. The exact needs vary depending on the organization.

Advantages of Supply Chain Digitization


Digitization can enhance the execution and planning of the supply chain, which leads to a variety of advantages.


Improved Financial Management


A vital element in supply chain digitization is digital inventory, as it provides real-time visibility into inventory activity. Subsequently, it helps you manage your financials better.


For example, with the proper system, you can receive automated alerts when it’s time to place a new order for goods, helping you save money by preventing costly stockouts.


Furthermore, you can more precisely schedule inventory replenishment to lower inventory carrying costs and the chance of dead stock.


Minimized Lead Times


Digitization enables you to reduce lead times and boost supply chain velocity by giving real-time visibility throughout your supply chain.


For instance, if your e-commerce store and your fulfillment software are integrated, you can instantly accept orders and prepare them for fulfillment.


Through the elimination of manual work across divisions, digitization helps accelerate several procedures.


Better Decision Making


The correct supply chain tech stack can offer useful information for better decision-making thanks to advanced tracking and analytics capabilities.


For instance, many technological systems may accurately forecast future demand by monitoring historical sales data and consumer purchasing patterns.


With better delivery times and cost savings, you may use this to determine inventory levels and how much inventory to keep in each distribution center.

Trends in Supply Chain Digitization


Because the field of study is rapidly expanding, it’s critical to keep up with the most recent developments influencing the landscape.


Curated Data Communities


Curated data communities have emerged as a result of the growing use of technology and the Internet of Things (IoT) in the supply chain.


These technological communities stem from the process of creating, organizing, and maintaining data sets that are meant to be accessed and used by people seeking various information.


Due to increased corporate visibility across various supply chain processes and access to more thorough data, supply chain strategies, from warehouse receipt through distribution, can be improved through enhanced supply chain analytics.


Shorter Product Lifecycles


As earlier noted, digitization enhances inventory planning and supply chain forecasting.


To effectively predict future demand or changes in the supply chain, businesses may access large volumes of data and evaluate it almost instantly.


Shorter product lifecycles have been popular, which has improved supply chain agility.

Companies that are dedicated to supply chain execution excellence, which aims to maximize all available supply chain resources, manage costs at each stage, and deliver products to customers on time and in accordance with specifications, should already be moving in the direction of a digital strategy.

However, they will be some challenges. Companies may be prone to becoming fixated on a singular process or metric, eventually finding themselves stuck. Or, a project may be too IT-driven, lacking a strong business champion and thus getting stuck once again in the pilot stage. There is also the struggle of acquiring funding and finding the right type of talent to drive digitization.


Digital supply chains are at the center of whole new business models as they develop and turn become profit centers rather than cost centers. Building more resilient supply chains is essential, thus investments should be accelerated given the persistently unpredictable climate.

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