Supply chains in general and the logistics industry in particular are changing day by day. To grow and develop, businesses need to transform themselves to catch up with that changing trend in the context of the COVID-19 pandemic and the impact of the industrial revolution 4.0.
What is supply chain digital transformation?
Supply chain transformation refers to technological innovation and the digitization of an organization’s supply chain. Excellent supply chain operations are an integral part of doing business. The faster and more cost-effective your supply chain is, the better your business results will be. By transforming an enterprise’s supply chain to automation and real-time information, companies can respond more quickly and accurately to any potential risks that disrupt business operations. , step by step improve competitiveness in today’s increasingly fierce business environment.
Supply chain transformation drivers
There are many key drivers behind an organization’s supply chain transformation. However, the key to digitizing and automating your supply chain must lie in the needs of your customers. Some of the key drivers are:
- Improve service quality: With the rise of online retail and consumerism, delivering a service experience over a product to your end users will set you up for success.
- Operate transparently: By providing real-time logistics for purchases and merchandise, organizations can better serve customers and suppliers.
- Cost-effective: New technologies like the cloud, process automation, and paperless warehouses drive efficiency at every level of the supply chain.
- The world is becoming flatter and technology is drastically changing the traditional activities of every industry and field in social life. The industrial revolution 4.0 brings many breakthrough opportunities for businesses, gradually changing the traditional way of working in supply chain operations.
- The COVID-19 pandemic pushes businesses to go digital faster. According to research by global strategic consulting firm McKinsey, the digital transformation process that should have taken 5 years to apply to businesses, now takes only 8 weeks thanks to the push from the pandemic.
The supply chain of each industry is changing
The e-commerce industry is expanding in the context of people buying more online because of Covid-19. This is a factor that helps logistics for the e-commerce industry thrive. Today’s consumers are more demanding about on-time delivery, “freeship” and if the product is not suitable, the “logistics recall” needs to be organized in a convenient way.
In the retail industry, new business models are also taking shape. The new trend in the industry is promoting omni-channel sales, integrating online and in-person. According to a survey conducted by Vietnam Report, in the context of the COVID-19 epidemic, people have to limit travel and gathering to prevent the epidemic, consumers have changed their shopping channels for the group of essential products. essential and non-essential needs.
In the F&B industry, the phrase “cold chain” is appearing more and more. The use of cold chains will extend the shelf life of fruits and vegetables from 2-3 days to 7 days and reduce losses by 60-70% at the store. Cold supply chain not only pay attention to the conditions of temperature and humidity, time also needs to be strictly controlled. Cold chain must have very timely supply speed.
To find solutions to challenges in each industry, businesses need digital transformation to adapt and develop. Effective digital transformation will help businesses achieve an increase in revenue to dominate the market, reduce costs, and improve competitiveness.
The future of the supply chain is the customer
To successfully transform the digital supply chain, companies need to develop business processes and infrastructure to focus on the customer. Specifically, companies must build teams with specialized skills in analysis, communication, and collaboration in the supply chain. Businesses should implement a supply chain planning platform that integrates data and can support digital supply chains.
This starts with end-to-end visibility of the supply chain to inform operational, tactical, and strategic decisions. Once this visibility is in place, the real differentiator is how businesses use it to enhance decisions, model scenarios, mitigate risk, and find business opportunities. new business. Competitive advantage will come from a company’s ability to use its digital supply chain to plan and respond optimally to customer needs.
Where are businesses in digital transformation?
Compare manual supply chain and digital supply chain
In the process of transformation, we often confuse the two concepts “computerization” and “digital transformation”. Computerization is the activities supported by the computer system in the working process. Computerization is just the first step of the digital transformation process by digitizing the data and resources of enterprises. Digital transformation goes further than that. The story of digital transformation cannot begin with technology. Digital transformation must start from people, to processes and finally to technology. Because technology is just a tool to help realize people’s ideas.
Digital transformation must start from people, to processes and finally to technology
In order for all employees in the enterprise to understand that digital transformation is an important activity, managers need to make it clear that this is a central strategy of the business. Businesses all think that changes in corporate culture are more difficult than changes in technology.
New process suitable for digital transformation
Workflow is the next element that needs to be addressed in the digital transformation process. Businesses need to identify new business models, build test capabilities, and drive process innovation rather than simply automating existing processes. An old process with many manual operations, no clear division of tasks for each employee. When applying technology right into that process, it will create holes, errors and can have the opposite effect. This is not effective, but also creates additional problems that need to be solved.
Once we have the right process, we begin to build a solution software system based on that process. In the supply chain, the needs of each business are different, depending on the industry in which that business is operating. The most practical thing is that businesses need to identify their needs. Every improvement and application of technology is necessary, but businesses need to know what to prioritize, because not every problem needs to be changed immediately.
Businesses can choose to use the system of supply chain solution providers. Solution providers are experienced in building supply chain management software and have the ability to customize the software to suit businesses in different industries.