Why Digital Transformation in the Supply Chain Isn’t about Technology

Supply chains have been fundamentally transformed with new digital solutions, perhaps more than any other industry. Noticeable improvements have been made in areas such as overall performance, operational excellence, and heightened customer experience. 

The focus of the digital transformation strategy in the supply chain industry is around the applications developed to enhance warehouse management and logistics, streamline end-to-end-planning, and brush up decision-making processes in view of the availability of new technologies and data accessibility. 

Because the factual manifestation of digital transformation is best discernible when a new software application hits the office, many business leaders have a tendency to base the next steps on technological improvements per se. However, creating a full-stack digital transformation strategy is way above technology. 

Initially, it broadens into at least two aspects of ERP and goes beyond into customer experience:

1. Resource management, or how you manage people, physical assets, and data across all internal and external sources.
2. Prediction, analytics, and planning, or how can you improve the future state of the business by using insights picked up from the current and past state of the business.
3. Cross-organizational collaboration, or stronger and better-connected teams with a fresh communication approach, both for employees and customers. 

 

Technology has certainly proven irreplaceable in avoiding redundancies and duplication of processes, two major obstacles of good ERP in the supply chain. Many supply chain companies already heavily rely on business analytics, automation, robotics, artificial intelligence, and IoT. 

But the way in which that process is specifically executed in each individual digital transformation strategy can be quite disruptive. It requires building bridges between people, data, and technologies that haven’t previously existed. It also pushes up for reinventing the business model. Finding the touchpoints of these bridges is a crucial element that needs to be incorporated in a digital transformation strategy. It is also the first task for leaders who intend to transition to Logistics 4.0 and Industry 4.0. 

In a way, the supply chain is growing much smarter than it used to be, depending on the technological and business model innovations made in congruency with the e-driven customer base. 

The software solutions are there, or if not fully available, then surfacing along with the needs. The needs must be sharpened, though, and incarnated into observable, measurable, and viable action plans in order to deliver the expected outcomes. 

Therefore, when devising a digital transformation strategy for your business, you must be hyperaware of the transforming needs, as well as know how to educate yourself on the possible solutions out there. Execution, which comes next, will include adopting new technologies. However, it will be impossible to arrive at this point if you don’t complete the first two – hyperawareness and informed-decision making. 

Digital transformation is a holistic approach that can produce variable outcomes – a complete ecosystem overhaul or several improved touchpoints, but it will most definitely not be only about obtaining specific technological solutions – a new ERP software, using chatbots, automating transactions, or perceivable warehouse management upgrades. As with any strategic process, a digital transformation strategy must have a concrete plan, objectives, KPIs, and a roadmap to get to the goal. To digitally transform a company, a look into the future is a must – therefore, begin crafting your strategy with a new vision.