7 Digital Supply Chain Technologies in 2021 to shape supply chain future
Organizations are looking forward to use digital supply chain technologies to build a digital supply chain so as to ensure business continuity, risk mitigation, avoid disruptions, cost optimization and build capability to gain competitive edge and deliver growth.
Let us first define what is a digital supply chain is. A digital supply chain uses electronic and digital technologies to connect and upgrade existing supply chain processes and ways of working.
Key benefits of digital supply chain is that there is end to end transparency and visibility as all nodes are connected and it mitigates the risk of supply chain disruptions due to physical barriers. There is full digital connectivity and real time end to end information flow and transparency in the supply chain.
7 Key Digital supply chain Technologies enabling the supply chain are :
1. Internet of Things :
The Internet of things (IoT) can be explained as system of interconnected things embedded with sensors and software. It is able to collect and transfer data with other devices and systems over internet or wireless network.
IoT devices are an effective way to track and authenticate products and shipments using GPS and other technologies. IoT devices use sensors to measure specific aspects of the world around them, including location, temperature, humidity, light levels, movement, handling, speed of movement and other environmental factors. IoT devices come in many form factors including RFID chips, smart devices and mobile sensors
IoT devices can be attached to specific storage containers or to raw materials or products themselves. The IoT device will transmit its location, which can be picked up by GPS satellites and used to track movement of goods.
Key applications are keeping regular track of goods movement in the supply chain from suppliers to distribution reducing handling times, monitoring temperature controlled products like ice-creams which can melt leading to spoilage if threshold is breached, route optimization leading to reduce freight costs or alternative routes in case of disruptions.
It can also be used for accurate identification and management of goods in a large warehouse, early identification of issues with goods getting lost or delayed and better quality management due to keeping raw materials and processed goods in correct storage conditions.
IoT is one of the key technology among digital supply chain technologies to shape supply chain future.
2. Blockchain :
The blockchain can be described as an open and decentralized, distributed books of account ( ledger) that record transactions between two entities efficiently and in a verifiable and permanent way.
It records the history of data, from its beginning to various stages of lifecycle and provides detailed records of how data was collected, where it was stored and how it was used
It makes the history of any digital asset unalterable and transparent through the use of decentralization and cryptographic hashing.
Key characteristics of blockchain are that it is distributed rather than copied or transferred. There is full real time access and all changes are transparent for the concerned parties
Key applications are that it allows people in value chain who are not one entity to share valuable data in a secure way like payment to suppliers , farm to customer batch level traceability, transportation and storage of temperature sensitive goods using RFID tags and ocean freight shipments
3. Artificial intelligence (AI) :
Capability of a computer or robot to perform tasks using intelligence similar to being done by human beings . It includes intelligent activities that human do like reason, interpret meaning and learn from history and past experiences
Artificial intelligence makes it possible for computers to learn from experience, adapt to new inputs and perform human-like tasks.
Key applications of AI in supply chain field are forecasting within inventory, demand and supply. Artificial intelligence can be used for predictive analysis for advanced forecasting. Plans can be refreshed more frequently to capture accurate demand. Real time planning is going to be way forward.
It improves agility and optimization of supply chain decision-making using work tools. Best possible scenarios could be built based upon intelligent algorithms and analysis of big data sets.
AI will optimize delivery of goods while balancing supply and demand, and wouldn’t require human analysis, but rather action planning for improvement in end to end planning process
AI can be used in supplier selection and risk management to evaluate and select best suppliers in terms of delivery, quality and cost.
Transportation management systems uses route performance by carriers, Warehouse Management system will reduce the time taken to deliver an order, improve container loading efficiencies by selecting best SKU mix loading patterns to optimize weight and volumes.
AI is going to play a very important role among digital supply chain technologies to shape future supply chain
4. Big data analytics
Big Data analytics is a process used to interpret meaningful insights, correlations, predictive modelers, market trends and consumer preferences. Big Data analytics provides various advantages. It help companies to make more informed business decisions and can be used to identify and prevent fraudulent activities.
Key applications are in transport: revenue management, technological enhancements, logistics and for competitive advantage (by consolidating shipments and optimizing freight movement) optimization tools, demand forecasting, IBP, supplier collaboration and risk analytics, GPS, RFID, Real time shipment tracking, control tower analytics and visualization, advanced robotics in manufacturing, AI and advanced delivery systems
5. Robotics :
Robotics is design, construction and usage of machines called robots to perform repetitive tasks done by humans. Robotics help supply chains to move goods without human intervention and aiding in achieving inventory accuracy.
Robotics is defining future supply chain among digital supply chain technologies by helping organizations decrease costs, improve labor and utilization stability, increase worker productivity, reduce error rate, reduce frequency of inventory checks and optimize warehouse processes.
Warehouses are deploying autonomous mobile robots and drones for efficiencies in picking orders and inventory management. Mobile robots are helping warehouse workers to fulfill orders quickly and efficiently. Ecommerce sector has seen significant growth during the pandemic and they have been using robots to handle large scale and complex warehouse operations.
Drones are being used with combination of computer vision technology, artificial intelligence, and RFID sensors, to perform inventory management tasks within the warehouse and more accurately than the human eye.
In a digital warehouse, end to end process is managed without any human intervention. Trucks are placed at docks and dock gates are opened. Goods move on conveyor and post bar code scanning and weighment are received into the system. Goods are sent to respective bin locations in the storage aisle. From there, goods are picked from system location basis automated pick list and moved to trucks for loading. Goods in and goods out are done with the help of RF scanner.
6. Track and Trace Technology : ( Digital supply chain technologies)
Track and trace technology uses various methods to track goods movement in the supply chain. It tracks material movement from suppliers to factories, factories to distribution centres and DCs to customers.
There is real time update of stock in the system and address any delays in the value chain. It provides accurate picture of stock in the system and improve supply chain efficiency.
GPS enabled trucking system is used to provide Advance shipment notifications to customers on expected goods arrivals.
7. Information System enabled processes :
Information systems connect various functions in an organization and establish strong interface with external supply chain partners. System based planning and operations build consistency, discipline and reliability in supply chain. It also ensures robust processes, strengthens routine operations and optimize the supply chain. It is among the most important digital supply chain technologies which are prevalent today.
Some of common applications are :
a. Strong interface between customers and suppliers for sharing of Purchase order for manufacturing and delivery and vendor invoices submission and payment.
Inventory management by vendors and implementation of auto replenishment model. Robust end to end procurement process from request for quotations, bidding and supplier selection and management.
b. Warehouse management systems to accurately capture the Product, quantity, batch and location of goods with the help of automated put away system. It will ensure perfect traceability at product, batch and quantity level.
Stocks are stored and picked through an automated application to improve productivity and minimize the distance travelled in the warehouse. It will reduce reach trucks and manpower requirement and promote efficiencies in the warehouse
c. Transportation Management system: There is established system interface between transporters and the customers. Indent is shared with the transporters and transporters can book the slot in the system. Once the vehicle is moved, shipment is created for payment. Business allocation is done by the system basis the vendor performance
d. Customers- There is System interface with customers so that orders can be captured and delivered accurately. It will improve serviceability, reduce invoicing errors and bring overall efficiencies in the customer service process.
Considering the dynamic trends in consumer preferences and choices, complexity in supply chain is only expected to increase going forward. Digital supply chain technologies and robust processes and systems are going to play an important role in capturing supply chain information, decision making and execution to control and operate supply chain with simplicity and efficiency.
Read more about digital supply chain technologies on What is the digital supply chain ?