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Digital Transformation: Using Technology to Create the Supply Chain of the Future

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Seventy-nine percent of companies know that they need highly-customized global supply chains, but the average supply chain is just 43 percent digitized at this point. Is your company ready to face the demands of tomorrow’s supply chain requirements?

To compete effectively in any industry today, enterprises need flexible, agile global supply chains that can go the distance. Enabled by technology tools that range from Android rugged handhelds with barcode scanners to mobile tablets mounted on forklifts, organizations of all sizes are improving their performance, maintaining profitability, and supporting the supply chain worker of the future.

But even in this era of constantly-evolving customer expectations, frequent regulatory shifts, and global trade tensions, some companies are sitting on the “digital supply chain transformation” sidelines and relying on age-old supply chain management processes and procedures.

“As companies struggle to deal with competitive pressures, technology change, and an ever-expanding range of customer requirements, corporate leaders are paying more attention than ever to their supply chains,” Accenture reports. “In too many cases, that scrutiny reveals supply chain design and execution that barely meet today’s business imperatives, much less imperatives that will arise over the next three to five years.”

Aggressive Digitization = Real Results

A recent McKinsey study found that the average supply chain has a digitization level of 43 percent, the lowest of five business areas that the firm examined. In fact, just 2 percent of the surveyed executives said the supply chain is the focus of their digital strategies. The same McKinsey research found that those companies that aggressively digitize their supply chains can expect to boost annual growth of earnings (before interest and taxes) by 3.2 percent and annual revenue growth by 2.3 percent.

The good news is that the latest digital technologies are enabling companies to comprehensively transform the way that their supply chains operate. At the enterprise level, for example, such digital transformations incorporate analytics, artificial intelligence (AI), robotics, the Internet of Things (IoT), and other advanced technologies that collect and process information automatically and either support decision making and other activities or automate them altogether, McKinsey reports.

“Improving supply chain performance isn’t just a matter of buying and installing new systems or software; supply chain management is a collaborative endeavor,” the firm concludes. “Most efforts to improve supply chain performance should therefore involve changes to the ways that employees and teams share information, consider problems and opportunities, reach decisions, and carry out actions they agree on.”

In return, companies get better decision making, recommendations for how to deal with certain situations (i.e. more accurate material planning processes that accommodate customer orders), streamlined operations (via automation), improved customer service (by knowing exactly where orders are in the supply chain at any given time), and improved collaboration with suppliers and customers alike.

Helping Companies Work Smarter, Better, Faster

Whether a company is tracking containers from ship to rail, keeping tabs on freight deliveries across the country, or selling cocktails at 30,000 feet, it needs secure, powerful mobile devices that can endure and get the job done. When a logistics company deploys enterprise-grade Toughbook laptops, tablets, and handhelds, for example, it puts high-powered handheld computers into the hands of its workforce.

Using a Toughbook laptop, tablet, or handheld device, workers can run full-sized applications from virtually anywhere over 4G or Wi-Fi. This keeps logistics companies connected to their drivers no matter where their routes take them, with features to reduce fuel costs and delivery errors, track and report cargo status, and log driver time to ensure employees get the rest they need.

In the rail industry, Toughbook solutions help transportation organizations stay efficient and connected with always-on, real-time data analysis, logistics tracking, and automated dispatch that extends to rail network operations centers, engineers, and yard and maintenance workers. Available with integrated barcode scanners, Camera Options for 3D Measurement, or Thermal Imaging Solution Options, these flexible devices support logistical applications, asset tracking and other functions with work-ready features (i.e., built-in heaters and the ability to work with heavy duty protective gloves), so nothing interrupts the information flow.

The same flexibility and durability extends into the warehouse or distribution center (DC), where rugged mobile computing solutions—with high visibility screens for bright sun or dim-lit freezer warehouses—are helping forklift crews get the job done in even the toughest environments. Engineered to withstand drips, drops, dust, and grime, these mobile devices not only enhance productivity, but they also help workers stay safe on the job. 

Developing the 2025 Supply Chain

In Architecting the 2025 Supply Chain, Accenture paints a picture of an industry that’s dealing with fundamental shifts, challenged by rising customer expectations, and struggling to develop more tailored/personalized experiences.

“Over time, operating in this environment will require an entirely new way to architect and manage supply chains—an architecture than can evolve as marketplace needs evolve,” Accenture notes. “To succeed in the coming years, companies will need new supply chain configurations across a broader ecosystem, new roles and skills, and new technologies.”

To meet these and other demands, 79 percent of companies admit that that their supply chains will need to become “fit-for-purpose,” based on the value proposition for a particular customer segment. And, 85 percent says that each customer order will dynamically activate a specific set of nodes in real time to best meet the order requirements. “It all sounds good,” Accenture states in its report, “but too many companies are moving too slowly in making it happen.”

Ready, Set, Go!

To succeed in tomorrow’s marketplace, organizations need supply chains that can respond to multiple, dynamic customer segments to meet a higher percentage of requirements in an increasingly tailored fashion. Getting there will require new technologies that can “comprehensively automate and add intelligence to the supply chain, from live segmentation to helping manage operations at a new level of speed and scale,” Accenture predicts.

Using AI, machine learning, mobile technology solutions and other advanced technologies, for example, companies can more efficiently improve the interactions between people and machines—all while maximizing overall productivity and effectiveness. “An effective transformation depends on a creative, forward-looking concept for the future supply chain. This means thinking about the outlook for the company, amid the pressures and trends that influence its competitive situation, as well as the changing expectations of its customers,” McKinsey notes in its report.

“Ultimately, the supply-chain vision should be aligned with the company’s strategic goals,” it adds. “While the need for such alignment has always existed, what’s new is that both the strategic goals and the vision now have to account for the pressures and opportunities that companies face in an increasingly digitized economy.”

If your company hasn’t already started down the path to supply chain transformation, and if it’s not maximizing technology to help it get there, now is the time to start. Don’t wait until your nearest competitor architects a top-notch, future-facing supply chain to make a move. Take stock of your current assets and processes; investigate your options; and then implement the digital and mobile technologies that will help your firm stand heads and shoulders above the competition in any market conditions.

Learn more about why rugged devices are an integral part of the supply chain of the future in our whitepaper, Rugged Mobile Devices: A Supply Chain Necessity

And if you will be at the Barcoding Inc Executive Forum Oct. 1st and 2nd in Ellicot City Maryland, stop by and find out more about Panasonic Toughbook Mobile Solutions.