Importance of Digitalisation to Improve Supply Chains: Helping Businesses Navigate Through Supply Chain Disruptions

Importance of Digitalisation to Improve Supply Chains: Helping Businesses Navigate Through Supply Chain Disruptions

Opinion Editorial by Bill Heaney – Chief Commercial Officer at DB Schenker USA

As Industry 4.0 is adopted in more and more industries and companies, the supply chain industry is starting to implement these disruptive technologies to adapt to the ongoing challenges and obstacles. Applying innovation to supply chains, combines innovative technologies like the Internet of Things (IoT), analytics, and robotics to supply chain management to improve performance and meet customer demands.

The ongoing impact of the pandemic brings greater challenges and obstacles with increased consumer demand, limited resources, shipping congestion, and labor shortages. Industry 4.0 is a solution to streamline the supply chain process with digitalization.

Here are some important technologies for the digitization of the supply chain.

Internet of Things (IoT)

IoT is making a mark on more and more industries, including logistics. Automation, cargo tracking, robotics, and remote fleet management are all examples of how IoT can be used to harness organizational data and gain insights into key processes.

Logistics companies are also leveraging IoT and automation to create more efficient processes. Automation can be used to replace mundane tasks, freeing human workers to focus on mission-critical work. This also reduces mistakes and errors that can lead to lost revenue and delays.

With regard to IoT, DB Schenker is equipping classic logistics infrastructure like freight containers, trucks, or department stores with sensor technology to systematically record all data points of a logistics shipment. These include position, temperature, and humidity, all bundled centrally via a separate IoT platform.

In logistics, this differs significantly from the use of IoT in other industries. DB Schenker is leveraging sensor data from cargo in transit to monitor and control high-value shipments or sensitive shipments, such as with cold chain logistics. This data is combined with other sources to always know the location of the shipments and the condition of the cargo, facilitating rapid, real-time action if problems arise.

Cyber Security and Risk

Cyber security is an ever-growing concern among organizations and consumers. Supply chains have inherent vulnerabilities that allow hackers to find and exploit weaknesses in the supply chain and access sensitive information.
Logistics often involves partnership as well, which creates a challenge for a unified security approach. Each party needs to have security shored up, or else any of them can leave weaknesses that can compromise the entire group. End-to-end security measures are the only solution to close off access points for hackers and keep security robust across the entire ecosystem.

Supply Chain Management

“Agility” is a key concept in logistics. Though demand-driven supply chain management isn’t a new idea, the opportunities in data and technology require a higher level of agility to meet the demands of the industry.

The use of IoT combined with machine learning and predictive analytics can collect, process, and analyze organizational and environmental data to offer in-depth insights. When the conditions shift, either within the organization or in the larger environment, companies can adapt quickly and mitigate the effects.

Customer Demand

The demand from customers is one of the biggest pressures on the supply chain. As consumer habits shift and evolve, they’re expecting orders to be processed and delivered faster, without delays or errors, and businesses are facing more pressure.

A longer-than-average processing time, a wrong delivery, or significant delivery delays could drive a customer to a competitor, leading logistics and distribution companies to strive for the most efficient processes possible. One solution to this problem is centralized distribution and real-time inventory management.

Looking to the Future of Supply Chains

Technology is disrupting the supply chain industry like any other. Supply Chain 4.0 brings innovations like IoT, robotics, data analytics, and other technologies to improve supply chain management and improve performance. With the right digitization strategy and technologies, logistics companies can improve agility, efficiency, and optimization to deliver better services to customers.