Why Digitizing the Supply Chain Will Be the Next Global Technology Movement – Entrepreneur

Why Digitizing the Supply Chain Will Be the Next Global Technology Movement – Entrepreneur

Opinions expressed by Entrepreneur contributors are their own.

As the current global health crisis continues to wreak havoc on the world’s supply chain, with constraints impacting everything from semiconductors to plastic, companies need to accelerate a move towards supply chain digitization — need to consider how to leverage new technologies to allow for a faster flow of data from retail sales floors to component manufacturers. According to a 2020 report by Foley and Lardner, 42% of manufacturers plan to strengthen these relationships and increase transparency across their supply chains.

But how to get started? 

A digital ecosystem, with transparent data

The first step needed to bring more smarts to a supply chain is to bring together current available industry systems under one roof. For many businesses, this isn’t a simple task, but an incredibly important one. Brands like Henkel, a consumer goods company based in Germany, did this when it connected its 33 factories across the globe to one cloud platform, which allowed them to easily track everything from product supply to truck logistics and consumer demand.

It’s important to note that, in addition to developing one digital ecosystem to host the digitized version of the supply chain, it’s critical for every part of an organization to share necessary data to prevent data silos. When planning, purchasing and production departments work in such silos, information gets delayed or goes uncommunicated, slowing down the process and resulting in partly or completely uninformed decision making. But synchronizing systems from the start opens an array of opportunities for transparency and collaboration; the more departments know each other’s updates, the more check points there can be throughout. This leads to faster response times and a more efficient process overall. An added benefit is that it allows businesses to better understand market demand and have the ability to create an industry-wide master production system (MPS). 

Related: Why Un-Silo-ing Your Data Will Boost Your Company’s Efficiency and Productivity

Another important goal is to match enterprise resource planning (ERP) inventory, storage resource management (SRM) data and suppliers’ data, so that departments can have more frequent and real-time access to information across all channels, allowing for better evaluations and informed decision making. Such data synchronization reduces redundancies, improves communication and offers clearer insight into channels. It also gives companies the advantage of better predicting demand and identifying risks, making forecasting and risk assessments more accurate and helping to meet demand without the need to produce excess inventory. According to McKinsey, high-performing organizations are …….

Source: https://www.entrepreneur.com/article/392984

Leave a Reply