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Supply Chain Digital Transformation

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Supply Chain Digital Transformation - Technology and Logistics
Steve Thompson
Steve Thompson
August 12, 2022

Even though digital transformation has proven to improve logistics in enormous ways, many businesses still resist this change. Some reasons for this resistance are insufficient budget to invest in new technology and simply a desire to maintain familiar legacy systems. Here's a look at the huge advantages of adopting a supply chain digital transformation.

How Technology is Changing Supply Chain Business Models

Supply Chain Management Software

A recent Gartner survey of over 500 supply chain professionals found that 38 percent of organizations are improving their technology to support end-to-end processes. These companies are well-positioned to overshadow competitors who resist embracing digital solutions. Technology is creating greater efficiencies for supply chain processes partly by providing advanced analytics for management to speed up decision-making in real-time. Digital transformation also makes it seamless for supply chain members to share information.

Ultimately, digital supply chain technology improves business growth, risk management, and cost optimization. According to recent McKinsey research, today's supply chains typically only have a digitization level of 43 percent. That means less than half of supply chain processes are performed with digital technology. A labor force is still needed to handle and transport inventory products. But companies that embrace automation, machine learning technology, and robotics have the opportunity to cut labor costs and fill gaps in labor shortages.

The combination of pallet investing and digital technology has played a major role in how to reduce operational cost. It's now possible for inventory managers to get accurate product counts in real-time, find precise locations of stored items, and make better demand projections for stocking up on supplies. Even so, most supply chains have yet to realize the full potential of these advancements.

Assistance from Artificial Intelligence

Artificia Intelligence

Machine learning (ML) technology allows warehouse managers to take faster action on ordering supplies and how they're stored. This software has capabilities of scanning enormous data at lightning speed and delivering instant problem-solving recommendations. It's an advanced step in modern supply chain digital transformation that cuts time and waste in logistics processes. Artificial intelligence (AI) is still in its infancy but has come a long way in a short time to be a major contributor toward streamlining warehouse and transportation functions.

A major advantage to ML technology is its "self-healing" properties, in which automation can detect and fix system vulnerabilities. Problems that used to take weeks or months to figure out can now be resolved within a day or even minutes.

Digital Technologies to Consider

Traditional suppliers can shift toward digital infrastructure by investing in software that simplifies a warehouse management system (WMS). It will noticeably improve inventory management quickly, making products easier to track with scanning devices. This dynamic alone speeds up the order fulfillment process, which is crucial to achieving customer satisfaction. Once you have a powerful WMS that suits your supply chain vision, you can work on building a more elaborate digital infrastructure.

While a modern WMS upgrades warehouse processes such as scheduling, picking, and packing of inventory, an even more powerful digital solution is an enterprise resource planning (ERP) system. ERP software is a broader platform that integrates all aspects of a business. It includes accounting, human resources, payroll, and more.

Choosing a flexible system that integrates well with new technologies is best. Fundamental technologies for supply chains to embrace digital transformation include IoT, GPS, and RFID. Additionally, blockchain improves cybersecurity and tracking, as well as facilitates digital contracts between vendors.

Your operation becomes even more efficient when you begin connecting and combining cross-functional elements both internally and externally. The more inventory and shipping departments can share data through a WMS or ERP system, the more they can accelerate and optimize supply chain activities. Supply planning and demand forecasting become much more precise when advanced analytics are available at a manager's fingertips. It helps prevent problems such as opportunity-losing undersupply or wasteful oversupply of inventory.

Once the core of your digital infrastructure is established, you can determine which redundant, boring, time-consuming, or unsafe human tasks would be more effective using automation. Furthermore, selecting the right communication devices will help facilitate a more collaborative environment. The more you improve the team experience, the more cohesive and reliable your production performance will be.

Adopting Sustainable Solutions for Supply Chain Management

Not only is digital supply chain management technology beneficial to your bottom line, but it also helps reduce adverse effects on the environment. You will have a wealth of data on supply networks, which can reduce errors in order fulfillment, cutting losses in shipping costs. It's important to maximize shipping to offset rising fuel costs.

By focusing on real-time decision-making, automation, innovation, talent, and customer satisfaction, your business will open up new opportunities for expanding market segments. It will create new revenue streams to help your business sustain financial stability while reducing system vulnerabilities and inefficiencies. From a social perspective, it can improve team loyalty and create a safer workplace for employees and the environment.

According to McKinsey research, a digital supply chain cuts lost sales and services by up to 70 percent. It also allows for inventory savings of 35 to 75 percent. Meanwhile, transport and warehousing costs can be cut by 15 to 30 percent, while administrative costs are cut by as much as 80 percent.

3D Printing

An emerging technology for achieving even greater sustainable production and distribution is on-demand 3D printing, which has already improved efficiency in the manufacturing and distributing of machine parts and many other products. The 3D printer is particularly empowering for testing and refining prototypes of new products.

Steps to Supply Chain Transformation

The first step toward supply chain digital transformation should be to plan a transformation road map. Figure out what modern tools are needed to make supply chain operating more seamless for your team. It starts with a strong WMS or ERP encompassing digital tools for scheduling, routing, and monitoring processes. Here are the development stages you should consider for your digital transformation planning:

  1. Evaluate your existing operation and compare it with your supply chain vision
  2. Embed supply chain solutions such as IoT in your digital ecosystem
  3. Implement autonomous supply chain technology that automates processes
  4. Synchronize your supply chain vision with digital business infrastructure
  5. Invest in talent that meets the requirements of your digital technology

Digital solutions such as IoT, automation, and e-commerce have already enabled companies to gain significant edges over competitors that resist digital transformation. The more you increase the capabilities of monitoring logistics processes in real-time with digital tools, the more you can accelerate order flow and the shipping process. You'll reduce or eliminate errors and slowdowns that have plagued traditional supply chains, leading to greater customer satisfaction. It will help maximize warehouse space and create opportunities for suppliers to share warehouse space or assets.


A proven way for a retailer, supplier, or shipper to gain a competitive advantage is to undergo supply chain digital transformation. Combining smart technology, qualified personnel, and traditional supply chain methods creates a powerful operation with expanded supply chain visibility for all members. If you’re looking for a pallet factory near you, get in touch with Pallet Market today!