March 23rd, 2021
The concept of a digital supply chain is nothing new, but what constitutes a digital supply chain is changing by the day. With the maturation of Big Data and advancements in artificial intelligence (AI) and machine learning, along with the progression of blockchain and an increased preference for cloud-based SaaS solutions, the digital supply chain is expanding into new territory.
Even if a digital supply chain offered an end-to-end experience a few years ago, there’s a lot more involved from one end to the other today. From IoT in manufacturing to advanced route planning in transportation, a digital supply chain is not static. In other words, an organization must undergo constant change in order to achieve it.
What a Digital Supply Chain Is Not
Rather than start with what a digital supply chain is, it might be more efficient to begin with what it is not:
A digital supply chain is not implementing one or more digital technologies to support a specific process. For example, TIE Kinetix offers EDI and e-invoicing solutions that help businesses to achieve 100% supply chain digitalization, but our solution alone does not make a supply chain digital. The same can be applied in all other process isolation instances.
Expanding on the above, a digital supply chain is not disconnected. Digitalizing business processes with technical solutions is only half of the equation. A digital supply chain cannot be realized when individual systems and applications don’t actively communicate with one another, or rather, share data in real time.
Furthermore, a digital supply chain is more than the solutions that, technically speaking, make a supply chain digital. Adding to your enterprise technology stack may not always be the best decision, especially if you’re still figuring things out.
What a Digital Supply Chain Is
In understanding what a digital supply chain is not, it becomes much easier to conceptualize what a digital supply chain is.
In short, a digital supply chain has no gaps. All operational and logistical processes are accounted for with an appropriate solution (e.g., an EDI solution), and everything is interconnected. But technology aside, there’s also a human side to a digital supply chain that requires a commitment to change and effective management of that change.
In a sense, this means a digital supply chain is an end-to-end supply chain; digital enablers (systems, applications, services, and so on) meet human initiative for full transparency at every level.
What Is End-to-End?
Supply chains are without a doubt becoming more and more complex—it’s no longer a linear model. However, when supply chains could be described as a linear model, the idea of an end-to-end supply chain still existed and could be achieved relatively easily.
Today, as trading partner networks continue to grow and new players and services continue to be introduced (e.g., 3PL providers and drop shipping), achieving an end-to-end supply chain becomes much more of a challenge.
Up Next: How To Achieve a Digital Supply Chain
Now, we know that the benefits of a digital supply chain are well communicated from industry analysts and service providers alike. We know that a digital supply chain is an end-to-end supply chain. We also know that it is becoming increasingly difficult to realize.
This begs the question, how can a digital supply chain be achieved?
Read the next post in our Digital Supply Chain Series, How To Achieve Digital Supply Chain Transformation. Here, we'll tackle this question by addressing common roadblocks that prevent many organizations from moving forward with supply chain digital initiatives, as well as how to overcome them.