For years, the supply chain sector lagged far behind others in digital transformation. Firms eschewed supply chain technology over lengthy Excel spreadsheets and remained steadfast on cumbersome paper billing. In addition, the limitations of supply chain technology meant the market offering often fell short of firms’ needs.
But those conditions have changed radically over the past two years. Disruptions and uncertainty stemming from the pandemic and its aftermath have finally pushed a once skeptical sector to embrace digital transformation.
According to a study by the Business Continuity Institute (BCI), the number of firms adopting technology for supply chain mapping in 2021 is 40.5%—compared to just 22.6% pre-pandemic in 2019. And over 55% are integrating technology to manage supply chain disruptions.
Supply chains are evolving to integrate technologies such as AI, cloud computing, and IoT (Internet of Things) to improve connectivity, tracking, and visibility. All this points to a future where firms will increasingly rely on an ecosystem of technologies to tackle business and operational challenges, bolster resiliency, and maintain their competitive edge.
Transforming supply chain management
Supply chain technology is undergoing significant upgrades and evolving to integrate next-generation technologies. According to a survey by PwC, the technologies currently receiving the largest investments are cloud computing, IoT, and AI:
1. IoT (Internet of Things)
IoT is revolutionizing how enterprises collect data at every stage of the supply chain—from shipments and ground transport to warehouse management. In particular, IoT devices are helping firms improve end-to-end visibility and providing them with high-quality granular data.
Improved visibility translates into enhanced shipment lifecycle monitoring, optimized event management capabilities, and better customer service. Data collected by IoT devices can feed into clouds and AI models to generate detailed insights on everything from operational efficiency and shipment times to more accurate forecasting.
IoT devices can also collect information on consequential variables such as temperature, humidity levels, handling, and the speed at which a particular item travels. Information such as this makes the devices especially valuable for shippers working with fragile or time-sensitive shipments.
Elsewhere on the supply chain, IoT devices have proved extremely useful in warehouse settings, where they help with inventory management and improved workflows by making tracking and finding items easier. Combined with robots and AI, IoT devices have also become pivotal drivers of warehouse automation.
2. Cloud Technology
Cloud computing forms the backbone of integrated supply chain technology by centralizing data from other technologies such as AI, IoT, and blockchain into a single source of truth. For firms, cloud computing enables:
- Accessibility. Clouds unify siloed data from supply chains into control towers that translate it into accessible outputs such as dashboards and data visualizations.
- Visibility. Unified historical and real-time data enables improved supply chain visibility and better control of operations.
- Speed. Easy access to high-quality data empowers better-informed decision-making, optimizes event management capabilities, and accelerates response times to events.
Beyond connecting technologies, cloud technology connects participants across supply chains—improving communication, collaboration, and accuracy. Better access to data throughout enterprises reduces the need for time-consuming, error-prone, and hard-to-track channels such as paper, spreadsheets, emails, or phone calls. Plus, better connectivity promotes open and collaborative enterprise cultures and bolsters employer brands by improving day-to-day experiences for everyone involved.
3. AI and machine learning
AI and machine learning models form the last layer of supply chain technology ecosystems. They process fragmented data from other technologies such as IoT devices and turn it into insights that enterprises can apply to decision-making, forecasting, and event management.
Firms are employing AI insights in myriad ways—from everyday tasks such as customs clearance and paperwork to the more delicate tasks of monitoring suppliers and assessing risk exposure.
Forecasting is one area where AI and machine learning models look particularly promising. They can help bolster preparedness and lessen the blow of bullwhip effects by transforming past and real-time data into more accurate predictions of future demand in areas like stock, labor, or logistics.
As supply chains become complex and market conditions more volatile, AI’s ability to analyze and interpret large volumes of data makes it a highly-valuable asset for enterprises looking to optimize decision-making and improve resiliency.
Supply chain technology with digital transformation
The future of supply chains is digital. CTSI-Global’s Honeybee TMS™ digitizes and simplifies transportation management for more efficient and cost-effective operations.
Contact us to learn how we can help you build a more robust supply chain operation.