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What are the Benefits of Supply Chain Digitization?

April 24, 2020

What are the benefits of supply chain digitization?

  1. Improve synergy with logistics partners
  2. Reduced waiting times
  3. Avoid glitches in the supply chain
  4. Centralization of supply chain solutions


The field of logistics is constantly coming up with innovative ways of delivering the product to the consumers. It starts with a fairly straightforward manufacturing, storage, and transport delivery system. But down the line, many innovations in supply chain management, warehouse storage, and the like have reduced these phases for more optimized delivery schedules. One of these innovations pertains to the benefits of supply chain digitization.

Whether you’re part of a large organization or the owner of a small or medium enterprise, taking advantage of modern digital channels is essential if you want to keep up with the demands of the market. While sticking to labor-centric methods cannot be entirely done away with, these may sometimes end up more costly in the long run, especially in the absence of a more accurate way of managing the supply chain end. Continue reading to learn more about supply chain digitization.


What is supply chain digitization?

Simply put, supply chain digitization refers to an integrated supply chain system relying on digital channels in order to provide you with more efficient solutions, better communication, and reduced costs in manufacturing, supply, and delivery. Your business can greatly take advantage of a reduction in reliance on human intervention. Let’s dive into the specifics of the benefits of supply chain digitization.


Improve synergy with logistics partners

two men shaking hands

Improving your business’ synergy with your logistics partner is one of the primary benefits of migrating towards a more digitized supply chain. Because your supply chain system is more integrated and allows a higher level of accessibility to data, you are able to efficiently cooperate with your logistics partners in transportation.

By incorporating digitization into your operations, you’re able to take more control of these functions alongside your provider. You can pan out routes, determine delivery schedules, as well as identify more cost-effective logistics practices.


Reduced waiting times

One cannot emphasize enough the importance of time when it comes to logistics functions. As mentioned before, one of the ways an optimal delivery schedule is achieved is by synergizing with carriers who can calculate routes for you. With supply chain digitization, you’re able to improve your efficiency and reduce waiting times at virtually every level of the supply chain.

In many cases, it may be difficult to acquire raw materials required in the manufacture of a particular product. You would have to manually contact potential suppliers and other wholesalers. To add to this difficulty, you would also have to consider the costs of transporting these raw materials, especially if they’re internationally based.

Investing in a supply chain software allows you to reduce the waiting times on procuring these materials, manufacturing them, and subsequently transporting the goods to the final points of distribution. You’d no longer have to worry about a reduced customer satisfaction level, thereby further adding to your reputation.


Avoid glitches in the supply chain

woman looking at inventory

A digitized supply chain creates more economical solutions and choices for your logistics business. You’d be able to avoid instances of having too many products in your inventory, or the alternative — having a shortage of these products.

The danger of storing too many products in your warehouse, for example, is that you could potentially end up wasting them and discarding them once they’ve reached the end of their shelf life. Depending on whether or not these products are perishable, they would eventually be rendered unfit for usage. On the other hand, an incomplete inventory would lead you to look for more expensive ways just to expedite the entire delivery process.

By digitizing many levels of your supply chain, you can avoid glitches that ensure that your company never runs out of stock of a particular good. Another positive aspect is that you would be able to avoid ordering too much of a product, which can lead to high levels of discounting in your invoices.


Centralization of supply chain solutions

With access to accurate analytics and data, you would be able to achieve a higher level of centralization when it comes to positive solutions on the supply chain end.

For example, the third-party software which you would use should constantly record and store data for you in a centralized system. You would easily be able to interpret the data through the help of an intuitive interface, helping you plan out many of your operations.

As mentioned before, these data-driven plans could better optimize your warehouse arrangement, maximize your available resources, or maybe even reduce the cost spent on packaging.


Key Takeaway

The benefits of supply chain digitization are things that your business simply cannot ignore. Data that has been generated by the integrated supply chain software has many positive outcomes in terms of reducing the cost of operations, improving delivery times, and coming up with more accurate delivery forecasts.

The guide above has hopefully served as a starting point towards your journey of investing in digitized supply chain solutions.

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