Since the conception of the internet, innumerable processes from every sector of work and business have converted from traditional methods to contemporary digital alternatives. Supply chain integration should be no different. Here are 5 reasons why supply chain integration should be digitised.
Digitally integrated planning and execution
The aim of any supply chain for B2B businesses is to deliver products to buyers as quickly as possible while acting responsibly and reliably. The digital integration of supplier management or supply chains allows increased efficiency while alerting all issues affecting supply and demand, such as shortages of raw materials, components, spare parts, and finished products. A fully responsive digital supply chain is an enormous competitive advantage and has become a must-have.
It is vital for effective rebate management
Rebates can be difficult to manage. Suppliers and distributors need to make accurate forecasts about how much of a product should be purchased and delivered for them to work correctly. This incentivises distributors to keep sourcing materials from certain suppliers, minimising waste and ensuring that they receive the right volume of products. But when these projections are unreliable, both parties are exposed to financial risk, and the possibility of a dispute increases dramatically.
This is where digital supply-chain integration comes in. It provides a centralised method for maintaining healthy relationships across stakeholders, increasing communication and collaboration between all parties, managing large numbers of complex rebate deals all at once, and increasing productivity, market share, and revenue for everyone involved.
The key to success for any supply chain is the efficient exchange of information. The traditional supply chain is fraught with friction, caused primarily by a lack of complete and timely information. The potential for disruption is high; sudden shifts in demand, lack of raw materials, and in some cases natural disasters can cause mayhem on the best-laid supply chain plans. Additionally, outsourcing of many necessary elements only makes it harder to understand the supply chain in full, fogging visibility into the transportation network and making it difficult to mitigate problems as they occur. Digitising your supplier management removes this fog and improves visibility.
The rise of autonomous logistics
The introduction of autonomous transport has already begun within production facilities, with companies like Lego almost entirely depending on them. It may seem dystopian to some, but the truth is that driverless cars and lorries are inevitable, and what was once science fiction will become reality.
While it is generally huge multinationals that are automating their production and manufacturing, in years to come this will trickle down to MNE’s. When it does, it is imperative for businesses that they are in a logistical position to adapt to this new technology. By having a digitally integrated supply chain, a business is in the best position to welcome new technologies such as self-driving lorries. It may be scary to think of, but these technologies will increase the efficiency of B2B and B2C organisations.
Development of supply chain analytics
The latest development of supply chain analytics will be the ability to prescribe how the supply chain should operate. In the coming years, organisations with digitally integrated supply chains will be able to optimise for any number of factors across the entire chain, depending on circumstances, and then be able to actively modify the chain accordingly. To improve the quality and efficiency of such decisions, companies will be able to include external information such as economic indicators and employ self-learning algorithms to aid in automating the decision-making process.
For more information about the digitalisation of supply chain integration, please contact us.