Essentially all industries have been impacted by technological advancements, even in just the past few years alone. Massive strides have been made in automation, AI, machine learning, and other digital technologies, which are changing the way we approach work and how different industries function. The supply chain is no exception, and inventory-based businesses are being constantly reshaped by technology and digital trends. But with these changes come questions: what exactly does digital transformation in the supply chain look like, why does it matter, and how can businesses best deploy these technologies?
The importance of digital transformation in the supply chain can’t be understated. It allows inventory-based businesses to innovate faster, better anticipate inventory needs, correct inventory problems, transport goods more effectively, and ensure that customers have the most optimal experience possible.
Here’s everything you need to know about digital transformation in the supply chain, including what it looks like, why it matters, and how to embrace it in your organization.
Digital Transformation: Where We Are Today
The global supply chain has gone through many iterations over the years, and since the turn of the century, there have been many significant milestones, thanks to advancements in computing and other technology. Now, many of the old systems and processes that were once standard have become obsolete, from paper-based documentation to a lack of real-time visibility. In the past, these systems were the norm, and they could result in delays, errors, and increased operational costs. Today, digital transformation in the supply chain can optimize, improve, and even automate just about every aspect of the supply chain.
Technology in the supply chain is sprawling: one analysis of manufacturers found that digital transformation is impacting inventory management, transportation, warehouse equipment, and facility management. These technologies are advantageous because they can allow businesses in the supply chain to work faster and more accurately, decrease errors, increase revenue, and provide customers with the best experience possible.
But for this to be the case, inventory-based organizations need to choose the right technologies for their organization, know how to deploy them, and ensure their staff are using these technologies appropriately. If not, there could be catastrophic consequences.
Why Digital Transformation Matters for Inventory-Based Businesses
Does digital transformation in the supply chain matter? If something is working well as-is, without robust digital transformation, should an inventory-based business go to the effort of embracing new digital processes and tools?
Digital transformation is already having profound impacts on the supply chain, and it’s poised to continue shaking up this industry. Tools are available today that can vastly improve your supply chain visibility, increase the accuracy of your forecasts, and help you better monitor your inventory. Across the workforce as a whole, executives say the top benefits of digital transformation include improved operational efficiency, faster time to market, and the ability to meet customer expectations.
And we’re just getting started: data shows that the digital supply chain market is expected to balloon to more than $13 million by the year 2030, driven by the rise in demand for fast order execution and cloud-based management solutions. What this reflects is that a large selection of new technologies will be available in the space, further advancing how inventory-based businesses will be able to optimize.
What happens when inventory-based businesses don’t embrace digital transformation? Likely, a business that isn’t adapting by embracing technology isn’t going to be able to keep up with the pace of service and innovation. They might be more prone to errors, will lack visibility into their inventory to prevent overstocking and stockouts, and will be unable to operate in real time. In a landscape where some companies are adopting the latest technologies, a business that fails to digitally transform is more likely to fall behind its competitors. If customers can choose a company that operates more quickly and more accurately, why would they choose another option?
Research shows us that it’s true: a majority of supply chain and manufacturing leaders plan to adopt AI in the future, even if they haven’t already. Further studies show that 74% of supply chain leaders are “increasing their supply chain technology and innovation investments.” So the question isn’t if a business should embrace digital transformation, but more so how to do so effectively and successfully.
Benefits of Digital Transformation
What are some of the benefits of deploying digital transformation in the supply chain? They can include:
- Improved efficiency and agility: With today’s supply chain technology, you can streamline supply chain processes, enabling your organization to quickly adapt to changes in market demands, consumer trends, and even natural disasters. Organizations can quickly adjust production schedules to optimize inventory levels and meet customer expectations promptly.
- Strategic decision-making: Data analytics and predictive modeling empower organizations to make informed and strategic decisions. By analyzing historical data and market trends, businesses can optimize supply chain processes, identify growth opportunities, and make decisions that align with long-term business goals.
- Cost reduction and resource optimization: Digital transformation can reduce overhead costs in multiple ways and make businesses more profitable. For example, inventory analytics and demand forecasting can reduce holding costs associated with excess stock and can reduce stockouts, which leads to missed revenue opportunities.
- Enhanced customer experience: With real-time insights and improved logistics coordination, digital transformation accelerates things such as delivery times and order accuracy. Customers can receive their orders faster and more accurately, which can lead to increased satisfaction and loyalty.
- Risk mitigation: With real-time visibility and predictive analytics, businesses can identify potential risks in the supply chain and proactively address them before they escalate. This proactive approach minimizes the impact of disruptions, ensuring a more resilient and robust supply chain.
Overall, it’s clear that digital transformation in the supply chain extends beyond simple operational efficiency, and that digital tools can have significant, lasting impacts on a business’s ability to achieve its goals.
Best-Practices for Embracing Digital Transformation in the Supply Chain
To successfully adopt and deploy digital transformation in your inventory-based business, here are some best practices to keep in mind.
1. Develop a comprehensive strategy
Your digital transformation strategy should include clear goals, tools, and even a blueprint for your approach. First, define clear goals and metrics for success, and ensure that your technology initiatives align with your overall business strategy and objectives. Also, as part of your strategy, create a strategy for deploying your digital transformation. For example, you can consider a phased approach to launching new software, to ensure success.
2. Collaborate with technology partners
Your choice of technology and technology partners will deeply influence the outcome of your digital transformation. Choose technology partners that provide solutions that suit your business today, and that can also scale as you do. Ensure they have a proven track record, provide ongoing support, and they’re dedicated to helping you smoothly implement their system.
Also, ensure that new technologies seamlessly integrate with existing systems. An integrated approach minimizes disruptions, allows for a smoother transition, and ensures compatibility with current business processes. For example, when you choose StockIQ as your supply chain planning solution, we will integrate StockIQ with your ERP, provide training at the end of implementation, and be your first point of contact for any questions or concerns that come up in your business.
3. Invest in employee training
When adopting new technology, your team must be set up for success. Ensure that all employees are properly trained on any new systems or technologies and that they’re offered ongoing training to help them stay up-to-date.
4. Embrace a customer-centric approach
Your technology should ultimately lead to a better customer experience. Utilize customer feedback and market insights to guide digital transformation efforts. Also, prioritize technologies that enhance the customer experience with features such as real-time tracking, personalized services, and improved communication.
Embrace Digital Transformation with StockIQ
Digital transformation in the supply chain isn’t slowing down, and in fact, it’s essential for your business’ success and stability in the future. If you’re looking to embrace digital transformation and overhaul the way you manage your inventory, then StockIQ is what you’re looking for. StockIQ is an intelligent supply chain planning solution that can help you improve turns and service levels while reducing stockouts and excess.
Give your inventory-based business the full visibility and technological upgrade it deserves. Contact us today to get started with StockIQ.
