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Improving supply chains through digital transformation

In a competitive market, supply chain managers seek to create net value, build a competitive infrastructure, utilize available worldwide logistics and try to meet supply with demand. This places the supply chain as central to many key performance indicators. Efficiencies and costs reductions can be gained through the adoption of digital technology.

What might this digital transformation involve? There are several areas, and Digital Journal has selected five from among the most promising.

First is the use of big data together with advanced analytics to gain insights and to improve decision making. This is on the basis of every point of data being an interaction. Supply Chain Drive uses the examples of “an item is picked off a shelf, a customer leaving a website, an online review is written, a damaged product is returned.” An understanding of each of these can yield valuable information.

China launched a freight-train line to UK.

China launched a freight-train line to UK.
Phillipe Marcou/AFP/Getty

If parts of the supply chain network are willing to share this information digitally, then useful material can be built up, as discussed in article published in the International Journal of Production Economics (“Big data analytics in logistics and supply chain management: Certain investigations for research and applications.”) Collected information can also be integrated into optimization tools; and used for activities like demand forecasting, integrated business planning and supplier collaboration and risk analytics.

Batteries as contingent power supply

Batteries as contingent power supply

A second area of data collection relates to the use of sophisticated sensors designed to track and collect information. These can provide safeguards for goods that need to be temperature controlled. An example is with the company company TruTag Technologies, which was featured on Digital Journal (“Tag technology company wins innovation award.”) Digital sensors can also protect against counterfeiting. This is a ‘hot topic’ in the pharmaceutical world where up to 20 percent of distributed medicines may be fake. The U.S. Food and Drug Administration has recently produced new guidance on this subject for medicines manufacturers, as Pharmaceutical Microbiology has reported.

More than 7.5 percent of global maritime trade passed through the Suez Canal in 2007  according to t...

More than 7.5 percent of global maritime trade passed through the Suez Canal in 2007, according to the World Shipping Council

A third area where digital technology can be used is with customer engagement. According to Software Advice, the selection of the right piece of software to enable this is key to achieving “customer retention, lower operating costs, increased sales and faster growth.” The best types of software for this are mobile. As the European Commission points out mobility is seen as a disruptive technology for business purposes and it allows new ways of working in “an ATAWAD (Anytime Anywhere Any Device) environment.” An example system is Darius, which collects customer feedback, analyzes it and passes regular reports back to the initialing organization. A second example is with Ambrosus, which has put in place a blockchain-based ecosystem for the supply chain (“Blockchain-powered supply chain tracker.”)

The fourth area is the use of cloud based technology. Cloud computing solutions for the supply chain can provide business process gains; this works best when a large number of suppliers and customers agree to share data over a cloud. According to an article in Forbes, companies that use an Electronic Data Interchange (EDI) to communicate throughout their supply chain are more efficient than those reliant upon emails, faxes and phone calls. Through an EDI two different companies can electronically exchange documents (such as purchase orders, invoices, shipping notices, and many others). Once the supply network is connected via a cloud then analytics, cognitive equipment and smart apps can aid decision making.

Fifth and finally, and with a nod towards the future, cognitive computing should leverage considerable advantages. Applications of artificial intelligence could include enabling organizations to shift through large amounts of structured or unstructured data;
assess detailed supplier assessments of a single supplier or a group of suppliers; and for assessing and calculating risk. There are also potential gains to be made from using artificial intelligence to find new ways of operating, to provide new insights, and to uncover new opportunities. Companies like IBM are developing cognitive computing systems to support supply chains.

Microsoft Surface computer

Microsoft Surface computers to provide its retail store visitors an interactive, unique and cutting-edge way to learn about the growing universe of mobile applications and devices.
Photo courtesy Microsoft

These five examples show how technology can help, now or in the near future, to improve the efficiency of the supply chain. The adoption of such technology needs to fit in with a clear business strategy. With a clear direction in place, the promises that digitalization of the supply chain promises are considerable.

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Written By

Dr. Tim Sandle is Digital Journal's Editor-at-Large for science news. Tim specializes in science, technology, environmental, and health journalism. He is additionally a practising microbiologist; and an author. He is also interested in history, politics and current affairs.

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