Developing a Digital Transformation Strategy for Your Supply Chain

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Supply chain managers everywhere are watching technology upend and disrupt every other industry under the sun.

It's a big idea, this notion that a pivot toward the digital could change so much or yield such significant results.

Investing in a digital transformation for your supply chain company is probably not something you're taking lightly, and with good reason. Here's some information to help you better understand your opportunities and plan your own rollout of a new digital you.

Determine Your Goals

The digital needs of any complex industry, which goes double for supply chains, go beyond hiring a few recent IT grads and building some kind of web dashboard for your employees. In fact, the possibilities for your digital transformation are extremely broad. None of it can, or should, proceed without an understanding of your long-term goals.

After all, we're talking about a transformation — not tinkering around the edges. Making an investment in digital infrastructure represents an opportunity to rethink significant parts of your business and how you carry out your supply chain processes daily.

This isn't helpful without some examples, though.

One digital investment might see you finding a software vendor who can help you harness data from throughout the supply chain and apply predictive analysis. The goal in this situation might be to better understand your customers and their cycles of supply and demand, and how you can shape your workflows and resources around them.

Another digital transformation might mean creating or expanding your reach online. Believe it or not, even today, about half of all small-business owners haven't invested in a website. Digital transformations in a supply chain company's internet presence might mean dedicating a team for better B2B outreach and more active company personalities on social channels.

The point is, without a clear idea of what goals you're trying to accomplish, the idea of going digital isn't much help. This is your chance to really take stock of, and leverage, what differentiates you from the competition already — or find out what that critical missing factor is that makes you a leader in your field.

Take a Good Look at the Market and What Your Competitors Are Doing

Technology advances quickly. Before anybody knew what was happening, Uber — always styling itself as a technology company — had put several taxicab companies out of business. Amazon pivoted seamlessly from selling merchandise to providing a significant portion of the infrastructure the internet relies on.

The point is twofold. First, it's important to remember that new technologies emerge on a regular basis. If you're not looking ahead, your business model might find itself obsolete. The second point is more important, though. Looking out for new technologies to exploit can also expand your company's capabilities in ways you never imagined.

It might not be as dramatic a transformation as Amazon's road from bookstore to cloud computing provider, but think of all the types of supply chain companies out there, including yours:

  • The parties responsible for sourcing, extracting and/or transporting raw materials for manufacturing
  • The parties responsible for assembling products and/or transporting partially finished products
  • The parties responsible for local and global customs and regulatory requirements concerning the movement of freight
  • The parties responsible for operating and updating software dashboards, connected equipment, wireless access points and cloud-based digital commerce tools

Rapid changes in any industry can be consequential, especially in one with so many third parties and moving parts. Think about your competitive edge when drawing up your digital transformation strategy. Look for technologies that can reduce the number of parties involved in a process, remove a middleman or burdensome technique, or otherwise streamline your operation in a way your competitors haven't thought of yet.

Beyond that, look for digital platforms and software vendors who might help you break out of your current model and into another.

See What — and Who — You Have Available

At this step of the process, you should be taking a close look at what resources you've got available, and how and whether your current infrastructure supports your vision for the future of your company.

As an example, there's a good chance you have some kind of internal company network within your facility or across your campus. However, expanding your network capabilities to support the Industrial Internet of Things, for example, doesn't always mean a huge and expensive retrofit. Look for IT equipment vendors who can help you expand your digital infrastructure — routers, switches, servers, etc. — with cost-effective refurbished models or EOL equipment covered under a third-party warranty.

If you didn't follow a lot of that, that's OK. Another part of this "taking stock" step in your company's digital transformation is to make sure you have the right people to help you build what you want. Application developers, machine learning engineers, data visualization specialists and many other futuristic experts are in demand today and will likely remain so for companies across the supply chain and beyond.

As you're looking at your existing infrastructure and the talent already on your team, remember that this might be your ideal moment to assemble as future-proof an IT squad as you can. They'll still have to keep their skills current, but if you don't recognize their potential and what they can bring to your operation, somebody else certainly will.

Understand the Risks

Finally, it's worth remembering that every company is different. You know your organization's needs and culture better than most, which means you're also in a position to understand that any digital transformation comes with some element of risk. We know that about 94 percent of for-profit organizations consider digital technology the future of industry. However, there's a good reason why 44 percent of companies in those same polls don't yet have a digital strategy. They're taking it slow.

When we said there's an opportunity here to distance yourself from the rest, we meant it. The current moment in technological advancement means lots of companies are going to be left behind as the industry pivots toward leaner operations with fewer go-betweens and moving parts. Now's the time to figure out how to use technology to make yourself indispensable, rather than disposable.

Megan Nichols

Megan Nichols is a technical writer and blogger. She writes about engineering, science and technology topics. Megan is also editor of Schooled By Science, an easy to understand science blog. With Schooled By Science she hopes to encourage others to learn more about STEM subjects.

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