How Did the Digital Supply Chain Evolve?

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Digital Supply Chain evolve article and permission to publish here provided by Megan R. Nichols.

People often position the digital supply chain as essential for helping today’s businesses succeed.

What a digitized supply chain entails, though, changed over the years due to the evolution of technologies and how people use them. 

Let’s look at how did the Digital Supply Chain evolve?

The Earliest Disruptive Technologies

Computers and the internet both played substantial roles in enabling supply chain modernization. Accepting or submitting orders via email allowed companies to have electronic paper trails to maintain accurate inventory counts and keep clients satisfied. Business management tools like spreadsheet software and invoice-creation tools saved significant amounts of time and aided recordkeeping. 

Companies got a taste of the now-booming software-as-a-service (SaaS) industry starting in 1999. The products within it allowed signing up for subscriptions to access services in the cloud. Authorized parties could use those products anywhere and at any time over active internet connections. 

Enterprise resource planning (ERP) platforms also paved the way for supply chain improvements. One article explained how supply chain management was among the first business functions that got significant technological upgrades to evolve and to harness data extracted from ERP systems. Such information streamlined transactions and improved decision-making, but the ERP data did not initially permit connecting and compiling cross-functional data sources. 

However, as supply chain managers gained more access to data from ERP platforms or other sources, they explored feasible ways to use the information to overcome challenges and get new insights. The ability to pull up relevant details as necessary helped supply chain managers make confident, effective choices. 

The Improvement of Key Processes

Process improvement is a common goal cited by companies interested in upgrading their supply chains to evolve with innovative solutions. Having the right tools and technologies can help enterprises identify bottlenecks and efficient practices. It can also eliminate manual, time-consuming processes concerning paperwork that could otherwise lead to lost documents. 

Cloud-based tools support the modern supply chain by removing device or location-based barriers. Authorized parties can log in and check statistics or look at electronic documents from anywhere in the world, allowing them to improve the support given to colleagues and customers. 

Automated systems also exist that utilize optical character recognition (OCR) to look for keywords within electronic documents and handle them according to predefined rules. If an OCR program identifies the word “invoice,” it might automatically put the file in a dedicated folder. Such a system supports supply chain enhancements by reducing errors and speeding up outcomes. 

Specialized online interfaces let supply chain customers place orders, check stock levels and track shipments. Those portals don’t take away the need for human support staff. Many people find them more convenient, though, especially if placing a recurring order or performing the transaction from a different time zone than the one in which a company operates. Registering for an account can also remove repetitive steps from a client’s experience.

Mobile Apps Make Information Portable

When the first mobile app marketplace launched in 2008, it only presented 500 offerings within the product categories. That seemed like a lot at the time, considering the novelty of having games, productivity boosters and communication tools a tap away at any moment on a device that fits in the hand. As of the first quarter of 2020, however, people had millions of app options from the top two vendors alone.

See also  The 5 Big Benefits of the Digital Supply Chain!

This tremendous growth aided the supply chain to evolve and in its ongoing progression to rely on electronic data rather than paper documents. A vendor could pull up information on a phone or tablet to prove a company’s capabilities during a meeting to secure a new client. 

Since many apps now use smartphone cameras to show streaming information, a person could even tour a factory or see the potential of a new machine without leaving their office. Another advantage is that apps accessing a device’s camera can show an accurate perspective to a remote party. A security guard might use one to check the premises from home, or a newly hired person could connect with an expert mentor through an app to receive mandatory training.

Bringing Big Data Into the Picture

Another supply chain evolution concerned real-time data collection. When companies began examining data, the most recent statistics were often from a month or week ago. Many decision-makers also relied more on gut instincts and experience than hard statistics. Organizations have a long history of struggling to gain insights from company databases, and many didn’t try due to the perceived labor involved. 

People were introduced to the concept of big data in 2005. They saw that the right tools processed massive quantities of information much faster than humans could without specialized technology. Supply chains did not widely adopt the earliest versions of big data products, however. As companies began offering big data functionality through business intelligence tools, this broader access facilitated growth in the supply chain sector. 

Companies enjoyed the user-friendly interfaces and realized that digging into data didn’t necessarily require hiring people with specialized expertise to help. They could use internet-based tools to generate graphs, view trends and study predictions.

As systems became more advanced, people could see information from the last hour. Now, thanks to the Internet of Things (IoT), supply chain managers get immediate readings from information fed directly into big data software. They can see where problems exist and implement decisive fixes, or access data to predict demand fluctuations and prepare the company for those shifts. 

A Personalized, Dedicated Approach

In the early days of digitizing the supply chain, adopters largely took trial-and-error approaches. Companies now have the advantage of partnering with a consultant that can advise on all aspects of automation and other technological options. Hiring an expert can aid an enterprise in utilizing the most appropriate choices for their respective specialties — whether auto parts or pharmaceutical drugs. 

A 2018 report found many global manufacturing companies were still in the early stages of their journeys toward high-tech solutions. More specifically, the document showed that two-thirds of the enterprises had barely started or not yet begun such transformations. Then, there were the 10% of companies deemed “digital champions,” that achieved a high level of maturity with their efforts.

Other findings included that two-thirds of all companies did not have clear visions and strategies to support the necessary changes, whether concerning the tools used or the culture. Similarly, only about a quarter reported feeling their employees had the qualifications to “master the digital future.”

These conclusions emphasize why companies should not attempt to progress without professional guidance. The ideal ways to pursue supply chain advancements vary depending on a company’s number of employees, its average output, goals and more. Since many analysts view supply chain evolution as a key to future success, it’s easier to find knowledgeable companies ready to offer advice about which aims to tackle first. 

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People remaining unconvinced that failing to rely on available innovations could put them behind more advanced peers need only to consider a prediction from analysts. They suggested that, by 2023, digital transformation efforts would account for more than half of all information and communications technology (ICT) spending.

Support From Robots and Automated Systems

When supply chain brands began using robots to evolve and improve their workflows, the machines stayed behind safety cages. However, many of today’s robots are much more flexible and mobile. Both of these characteristics help supply chains become more powerful with help from cutting-edge computer algorithms. For example, autonomous mobile robots (AMRs) feature smart sensors that let them recognize people and steer around obstacles. 

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A company may use a data analysis tool to conclude that employees spend substantial portions of their workdays transporting goods between different parts of a warehouse. If the enterprise purchases AMRs to save workers some steps, those workers could spend more time doing rewarding tasks and the duties that robots can’t manage. 

One analysis projects the mobile robot market to reach $54.1 billion by 2023. That prediction represents a combined annual growth rate (CAGR) from 2018 to 2023. 

Automated systems — such as conveyors and pick-and-place systems — also bring supply chains into the future. Companies specializing in warehouse automation can assist their clients with end-to-end installation and integration services, ensuring they are well-prepared to meet needs and grow. Many automated systems operate in the cloud and let users link pieces of compatible equipment that communicate with each other for maximum output. 

The Need for Advanced Cybersecurity 

As supply chains evolve and become more dependent on Wi-Fi-enabled technologies, the opportunities ramp up for cybercriminals to exploit vulnerabilities. A 2020 report showed that supply chain cyberattacks rose by 150% between 2016 and 2017. It also warned how the growing number of connected devices only expands the attack surface. 

Supply chains have come an impressively long way, and the advancements show no signs of slowing. Companies can reap meaningful and long-lasting benefits from a digital supply chain but must keep cybersecurity a top-of-mind concern. 

Business leaders can do that by purchasing intelligent threat detection software to monitor for traffic abnormalities. Moreover, cloud suites like Office 365 have built-in malware protection and Office 365 backup. Since IoT devices are more prevalent in today’s supply chains, it’s also worth investigating cyber protection tools that automatically detect new gadgets on a network and check them for vulnerabilities. 

Robust cybersecurity requires a concentrated effort. Otherwise, online threats could restrict a company’s growth efforts and limit their return on investment (ROI).

A Fascinating Progression in How did the Digital Supply Chain Evolve

This look at how did the digital supply chain evolve focuses on the tremendous advancements achieved in a relatively short time. The improvements are far from over, however. Artificial intelligence (AI) and the blockchain are two of the many technologies that should continue to gain ground in the sector moving forward.

Megan R. Nichols is a STEM writer who covers engineering, science and technology topics. Megan is also editor of Schooled By Science, an easy to understand science blog. With Schooled By Science she hopes to encourage others to learn more about STEM subjects. You can follow her on Twitter.

Originally written for Supply Chain Game Changer and published on July 16, 2020.

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