August 24, 2018    2 min read

As any business owner would know, a well-functioning supply chain is vital to the success of any business. Getting it right entails the efficient networking between all individuals, organisations, and activities involved in a business process from the manufacturer to the end user.

Nowadays, the traditional supply process is carried out with the aid of digital technology – this is what we call a digital supply chain. In this article, we’ll explore the ins-and-outs of the digital supply chain and demonstrate the benefits of adopting new technologies in your supply chain model.

What is the digital supply chain?

The primary aim of the digital supply chain is to deliver insights to increase efficiency and to produce higher profits for the organisation.

The digital supply chain works by managing a series of activities that are connected with coordinating, controlling and planning the movement of raw materials, goods and parts from the supplier to consumer. During this process, financial, material and information flows are managed and controlled as decisions are made at the tactical, strategic and operational levels throughout the supply chain.

How does it help businesses?

Organisations who adopt a digital supply chain are automatically at an advantage because it increases efficiency and reduces the likelihood of human error. For example, a digital supply chain will allow business owners to move assets, people, and resources to where they are required at any time. This cost-effective method allows for proactive mitigation of any transportation and manufacturing risks involved in the supply chain.

Businesses with a digital supply chain can save large amounts of money in multiple areas including resources, time and transportation. For example, some of the latest technologies like radio frequency identification (RFID), GPS tracking, smart labels, and barcodes have played a vital role in the digital supply chain for many businesses, providing real-time data on the whereabouts of goods.

Furthermore, by integrating cloud technologies with web services, the digital supply chain can unify information and create trading-partner visibility. When the system is fully automated, manual data entry can be eliminated and this will greatly reduce the likelihood of human error.

Among the many benefits of the digital supply chain, the most important one is perhaps its cost-effectiveness and value-added services. The key factor of supply chain integration is its ability to minimise governance costs, which include the cost of exchange with other organisations and those within the firm.

Companies that integrate digital technologies into their supply chain can quickly improve service levels while cutting costs up to 30 per cent. Just as important are the options that digital technologies provide to develop new business models and new strategies. For instance, leading-edge companies such as Adidas are deploying 3D printing to move some production closer to customers, offering greater product customisation and shorter lead times.

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