The need and demand for digital transformation in the supply chain industry are growing more than ever. New trends and technologies are continuously emerging, and many of them seem promising and have the potential to deliver great value. According to a McKinsey survey, the current digitization level of the average supply chain is 43 percent which is still the lowest as compared to other industries. The survey also suggests that companies that are planning to invest in digital transformation can expect to experience an increase in their earnings by 3.2 percent.
That's why it's important for supply chain businesses to embrace digital transformation, and that's where this guide comes into place. It contains the top trends in digital transformation that every business supply chain business should consider in 2021. So, without any further ado, let’s get started.
Hyper automation refers to the combination of multiple modern technologies such as RPA (Robotic Process Automation), AI (Artificial Intelligence), and ML (Machine Learning).
How Can Hyper Automation Help the Supply Chain?
This technology can automate and facilitate many of the tasks related to the supply chain that traditionally needs human actions and judgment. Hyper automation also has the potential to efficiently manage tasks that need critical decision-making, and it's expected to assist the supply chain by automating transaction processes. The ultimate goal of this technology is to create an autonomous supply chain that can augment human capabilities effectively.
Adoption of Blockchain Technology
Blockchain is one of the most popular and innovative technologies of the last decade, and the supply chain is one of those technologies that can benefit from blockchain the most. According to stats, blockchain is expected to save about 31 billion US dollars by 2024 by streamlining supply chains in the beverage and food industry alone. It’s a staggering number that only explains the true potential of blockchain technology. That’s why the adoption of blockchain is increasing dramatically.
How Can Blockchain Technology Help the Supply Chain?
The main goal of using blockchain technology in the supply chain industry is to achieve 100 percent transparency. Sharing data with obscurity is one of the biggest reasons that generate negative results in the supply chain. Blockchain will allow companies to share data most transparently and securely with all the concerned parties. It’s almost impossible to alter or hack data that resides on the blockchain, which will eventually make the supply chain more informed and transparent.
It’s also important to note that using cryptocurrencies to make payments is also becoming popular in the supply chain industry. That's because governments across the globe have started recognizing digital currencies as legal tenders, which makes it easy for the supply chain industry to adopt them. Not only does it offer a fully secure medium to transfer funds, but it’s also a much faster method as compared to the traditional payment and financial systems.
End to End IoT (Internet of Things)
Using IoT technology is another rapidly growing trend in the supply chain. The biggest appealing factor of this technology is that it can be used from end to end throughout the supply chain.
How Can IoT Help the Supply Chain?
Just like blockchain, IoT technology also ensures improved transparency. But at the same time, it also allows supply chain businesses with insightful data that can be used to make the supply chain processes more effective and efficient. For example, IoT devices along with sensors can be installed in trucks that are used for transportation to monitor the live location and to notify partners automatically about the estimated time of delivery. Other than that, IoT devices can also be used in retail outlets to gauge demand and in warehouses to manage inventory with more visibility.
The IoT technology allows supply chain businesses to increase their overall ROI (Return On Investment) by proactively responding to current demands, minimizing downtime, and increasing process efficiency.
Many supply chain businesses with strong automation adoption have also started using smart contracts. Not only does this technology improve the automation process, but it also saves a lot of time and hassle. It’s basically a set of transaction protocols that two or more partners across the supply chain can use. A smart contract is executed automatically when certain conditions are met. For example, you can create a smart contract that will generate an invoice only if the shipment has received its destination.
How Can Smart Contracts Help the Supply Chain?
Using smart contracts means that you’re automating multiple processes and functionalities. Otherwise, your need to perform manually will take a whole lot of time. In the aforementioned example, your smart contract will automatically generate the invoice if the shipment has reached its destination by performing the complex calculation instantly.
5G is basically the 5th generation of wireless technology, and it's also becoming very popular in the supply chain industry. This technology offers exceptionally fast upload and download speed which makes the communication of different devices lightning-fast.
How Can 5G Help the Supply Chain?
As we have already mentioned that because of the IoT technology, more and more devices are becoming a part of the supply chain. All of these devices need a strong wireless connection to communicate with each other for collecting data and monitoring different supply chain processes. It’ll timely provide supply chain companies with important data such as dispatching new orders, real-time tracking of transportation, and so on.
Agile Supply Chain
Agility is one of the biggest things that the supply chain industry can learn from the ongoing COVID-19 pandemic. It has become more important than ever for the supply chain industry to have enough flexibility in order to absorb both minor and major shocks. New models based on machine learning and artificial intelligence are being developed to make the industry more agile.
How Can Agile and Flexibility Help the Supply Chain?
These new SCM models, with the help of artificial intelligence, can predict upcoming crises to allow companies to be prepared for them. Other than that, the personalization of shipment (or personalized supply chain) is yet another aspect of agility. It allows the businesses to deliver exactly what the end-user wants in the least possible time and cost.
Immersive Applications and Experience
It is one of the most innovative technologies that the supply chain is leveraging to take the user experience to the next level. Smart glasses, wearables, HMDs (Head Mounted Displays), and even smartphones today now offer enhancements and infrastructure to provide immersive experiences. The technology uses a blended mixture of AI, graphic processing, and other applications.
How Can Immersive Applications Help the Supply Chain?
Immersive applications can dramatically transform the overall landscape of supply chain management. It provides brand-new interaction models allowing supply chain companies to improve work error rates, faster repair times, and safer working environments.
The digitization in the supply chain may be lagging slightly, but the adoption of digital transformation is inevitable. It's just a matter of time, and eventually, the modern technologies that we have discussed will reshape the entire supply chain. If you own a business related to the supply chain industry and you find these technologies overly complex to overcome IT problems, then you need professional services.
It’ll allow you to automate your business processes to save time and reduce friction by adopting new technologies more quickly with lower costs. All you need to do is to schedule a meeting with Integratz to start your digital transformation journey.