8 New Digital Technologies That Are Transforming Supply Chain Operations
Digitization has thoroughly improved sector after sector and the supply chain industry is next. As the backbone of many other industries, supply chain operations have much to gain from new digital tools, but they’ve lagged in this trend.
Increasing efficiency and reducing costs are the top priorities for 63% and 59% of supply chain leaders, respectively. However, the changes that can produce those ends — like manufacturing digitization and digital upskilling — get less attention. That’s starting to change as more organizations realize the potential of these technologies.
Implementing new digital technologies can help supply chains attain their goals now and in the future. Here’s a look at eight innovations changing the industry.
1. IoT Tracking Solutions
The Internet of Things (IoT) is one of the essential technologies to enter supply chains in recent years. These wireless, interconnected devices offer remote access to critical functions and real-time information. In supply chain operations, that means in-depth shipment tracking.
IoT tracking solutions can transmit locations in real-time, as well as shipment quality factors like temperatures and vibrations. When these fall outside acceptable parameters, the devices can alert relevant workers and stakeholders. They can then adjust operations as necessary to deliver sensitive shipments earlier and prevent spoilage.
This transparency can also help improve client-vendor relationships and establish trust with drivers. These benefits have made the IoT one of the most popular digital technologies for supply chains, with 56% of industry leaders planning to invest in it.
2. Remote Collaboration Platforms
Supply chains are complex interconnected networks involving multiple stakeholders. As a result, clear and efficient communication is crucial to success in the industry. Digital collaboration platforms provide the tools supply chain organizations need to maintain that level of communication.
Remote collaboration software is similar to ERP and WMS in that it uses the cloud to provide a single, consolidated point to manage multiple processes. That simplification is critical for communicating across departments and locations. Real-world case studies back this up, with some organizations seeing an increase in productivity after streamlining their workflow and reducing data silos.
Digital collaboration tools let supply chains act as a more cohesive unit. As disruptions continue, this quick and informed communication will become increasingly crucial, enabling faster, more effective responses.
3. Machine Learning
Another new digital technology that could revolutionize supply chain operations is machine learning. This subset of artificial intelligence is skilled at recognizing patterns and their causes to improve over time. Consequently, it’s an ideal resource as supply chains strive to become more flexible and resilient.
Machine learning can suggest practical process optimization steps in virtually any supply chain operation. Predictive analytics — which can predict incoming changes like demand shifts or logistics disruptions — are some of the most helpful. With these reliable future insights, supply chains can adjust to minimize these changes’ impact before they occur.
4. Enterprise Resource Planning Software
Enterprise resource planning (ERP) solutions will also likely play an increasing role in supply chain operations. These software platforms integrate multiple core business processes into a single solution. That way, stakeholders across departments can access the information they need and understand procedures quickly and effectively.
In addition to bringing typically separate processes together, ERP often includes automation features to streamline management further. ERP’s insight and efficiency have helped some companies improve productivity by 30% and reduce inventory by 20%. When supply chain leaders don’t have to switch between multiple platforms continually, they can better grasp operations and make more effective strategic decisions.
5. Warehouse Management Systems
A similar digital technology with significant potential in supply chains is the warehouse management system (WMS). WMS solutions offer a digital, highly automated alternative to traditional inventory management systems. They provide a single access point to view and control inventory tracking, picking, shipping and related processes.
Conventional manual approaches to warehouse management are inefficient and prone to error. In some sectors, inventory accuracy can drop below 60% because of these limitations. WMS provides a solution by capitalizing on real-time data tracking and automation.
WMS’s increased accuracy and efficiency make it easier to adapt to incoming supply chain disruptions. As more organizations implement these systems, product shortages, delays and similar errors will become less common.
6. Robotic Process Automation
Robotic process automation (RPA) is another essential time-saving tool for supply chains. Managing a supply chain typically involves many repetitive administrative tasks like scheduling, billing and data entry. While these are crucial to successful operations, humans aren’t ideal for the job, as they tend to be slow and make errors in this kind of work.
Instead, RPA tools automate software-based tasks just as physical robots automate manual labor. Delegating this repetitive, date-heavy work helps streamline administrative processes while reducing errors.
As technology improves, automation will come to more processes like driving to reduce the strain on truck drivers and similar challenges. Until that happens, supply chains can use RPA to free workers’ schedules and help them reach peak productivity.
7. On-Demand Warehousing
One newer digital supply chain trend is on-demand warehousing. In this practice, digital platforms give organizations access to unused or underutilized facilities to rent out for short-term adjustments or demand fluctuations. Businesses with excess capacity can use them to connect with clients to make the most of their assets, as those with limited space avoid delays.
Warehouse space has become an increasingly in-demand commodity, leading to high prices and limited expansion. On-demand warehousing helps mitigate the issue, democratizing available space and helping organizations minimize losses on both sides of the equation.
Another emerging technology with considerable potential for supply chains is blockchain. These are decentralized digital ledgers with open, transparent and unchangeable records. While the technology initially served as the underlying platform for cryptocurrencies, it can improve visibility throughout the supply chain, too.
Because blockchain records are immutable but easily accessible, they’re ideal tools for establishing trust and traceability throughout the supply chain. This transparency can help attract potential partners, meet regulatory requirements or reduce issues like counterfeiting.
While the use of blockchain technology in supply chains is a new practice, real-world use cases already exist. Two British hospitals used blockchains to track vaccine shipments at the height of the COVID-19 pandemic. As the technology grows, it could bring the same benefits to other products.
Digital Transformation Is Reshaping Supply Chains
These eight technologies are just a sampling of the emerging digital tools that can improve supply chain operations. As more organizations realize their potential, innovations like this will shake up the industry.
Digital transformation in supply chains may fall behind other industries, but that trend is changing. These digital technologies can help supply chain businesses meet and exceed their most critical goals, becoming more efficient, transparent and flexible. Over time, digital transformation could help the industry overcome its reputation for disruptions and delays.