How Supply Chain Digitization Can Streamline Your Inventory
Digitization provides a host of advantages to your supply chain, but perhaps the most important is that it can protect you from risk and positively impact your bottom line. A recent survey found that 85% of C-level executives predict that widespread digitization adoption will improve cash flow.
Digitizing is often achieved via 3rd party software implementation that introduces automation and machine-learning into previously stale processes like MRO procurement or inventory stock control.
This article will explore the benefits that a digitally advanced supply chain has over traditional systems.
What is supply chain digitization?
Supply chain digitization is the act of shifting from analog supply chain processes into digital software-based systems with established master data that provides comprehensive information across multiple supply chain enterprises.
How can supply chain digitization benefit your company?
Using data for decision making
Digitizing your supply chain doesn’t just allow your company to endure disruptive events like those we saw during the 2020-2021 years, it is also an aspect of modernizing your business that facilitates economic growth.
The pandemic beckoned in an era of digitization as companies realized the level of risk they allowed through the use of existing systems. The adoption of software as a method of digitizing previously sluggish data procurement strategies has increased visibility throughout supply chain operations.
Modern times now require data-driven decision-making in real-time to maximize efficiency and mitigate potential hazards threatening to disrupt supply chain processes.
Digitized supply chain management systems are able to gather, store, and analyze massive amounts of data across all enterprises with significantly less time and effort required from leaders.
With this knowledge, supply chain managers can inform their decision-making process and develop evidence-based strategies to improve operations and predict periods of downtime.
The incorporation of real-time data often leads to better outcomes for both the vendor and supply chain business as this data is used to enhance the customer experience, back-end logistics, and overall quality of life for employees.
Reducing manual tasks helps to alleviate the administrative burden on your team so that they may focus on issues that require increased attention. Not only does this save time and money, but it will result in happier and more productive employees.
Automation also reduces the chance of human error, thus reducing risk. Humans have been shown to make consistent errors in data entry while the chance of a computer making a mistake is infinitesimally small. The minimization of errors will prevent pesky interruptions from slowing output, as well as ensure suppliers and customers are accurately and readily taken care of.
Reports have indicated that the average yearly cost of manually entering data figures into supply chain ERP and administrative systems is more than $1 million in lost time, effort, and errors.
Automation is one aspect of an overhaul every supply chain management company should be undertaking to modernize. If you’re still citing spreadsheets or searching for physical files to make decisions, you will no longer be competitive in this market.
Procurement on demand
The digitizing of procurement is sure to throw a wrench into the tools and talents currently utilized to manage suppliers of capital. Efficient integration and management of suppliers of raw materials and parts to your supply chain is a crucial aspect of the inventory management process.
As companies use big data tools to lower suppliers and take advantage of bulk cost discounts, newly digitized systems are working in the background to aid the planning process, improve sourcing ability, manage risk, and facilitate communication between actors.
Improved procurement ability is just a symptom of the enhanced visibility and increased automation that digitization enables.
Companies can expect more than just refined systems; they can look forward to a radical transformation in the way operations and employees contribute to a company’s bottom line. To achieve such an upgrade, businesses regularly employ third-party AI-enabled software.
However, how do they use that software to find these benefits?
Start digitizing your supply chain today
Identify specific problems in your supply chain
To effectively begin to digitize your supply chain it’s essential to set realistic goals and attainable upgrades. Starting with a specific mission, to automate your factory floor, for example, is much more attainable than digitizing the entire enterprise at once.
It helps to perform an audit of your inventory management systems to discover areas that can be digitized for better performance. Analyze your strengths and weaknesses to help you locate areas of improvement.
Develop a targeted strategy
What systems are most critical to your supply chain operations?
The transition from a traditional supply chain model to a comprehensive digital supply chain is complex and multi-faceted; once you’ve found your place for digitization, strategizing the method of integration is crucial to guarantee future benefit.
Despite this seemingly obvious step, a reported that 78% of supply chain professionals noted the need to digitize their supply chain, but only 26.8% had established a clear strategy to accomplish this.
Choose your software solution
Digitization doesn’t have to be a siloed process. There are tools ready to collaborate with you on improving areas of slow production and reactive decision-making. Modern software with machine-learning and AI inclusion will not only help bring your supply chain into the 21st century, but it will also protect you from hidden disruptions ready to derail your operations.
Digitizing your supply chain has never been easier
Digitization of the supply chain is critical to encouraging visibility and overall streamlining of inventory management processes, as well as decreasing wasted resources and potential risk. The first step is building a strategy and training employees to excel at their new duties.
Digital technologies are helping to catalyze this process. Modern software integration is creating significant changes in the standard operating model. By identifying digital trends and areas of weakness companies are beginning to navigate the logistical adjustments forced by the pandemic.
To learn more about reducing supply chain risk through MRO optimization, download the white paper on MRO optimization today.