Supply Chain Is Not Yet Digitized

Rapid advancement and widespread use of technology in our everyday lives, many businesses in the supply chain industry have not fully grasped the opportunity to digitize their operations.

According to a survey conducted by Automation World, only:

  • 44% of respondents are currently using supply chain software
  • 15% of companies plan to implement supply chain software within the next year, 46% in the next few years, and 39% indicated that it was not in their short-term plan at all.

These statistics are problematic.

As mentioned in our previous blog, “COVID-19: A Story of Two Supply Chains,” global trade is largely governed on the foundation of the physical supply chain. Implementing technology that automates supply chains can help optimize and synchronize operations between businesses. In addition, digitizing supply chains can improve tracking abilities and increase transparency to better regulate both physical and digital supply chains. 

Here are some aspects of supply chains — both physical and digital — that are not yet digitized, according to Rethinking Supply Chain Episode 40

  1. Many businesses have not yet adopted centralized supply chain software. This kind of software can automate the exchange of information among brands and retailers. Different retailers have unique formats brands must follow to submit product data to their sales channels. Many brands have no idea that centralized supply chain platforms like Venzee exist, so they continue to use labor-intensive, error-prone methods involving the manual exchange of spreadsheets to send product data to retailers. Centralized supply chain software allows brand manufacturers to easily send product data to any retail sales channel and transforms information to meet channel requirements — acting as a digital translator between brands and retailers. 
  1. EDI, or Electronic Data Interchange, is not yet embraced at ports. EDI technology would make dockworkers’ jobs a lot easier. Instead of tracking information on clipboards and trying to guess the contents of an incoming ship, dockworkers would have access to digital intelligence that communicates the number of incoming shipments and the contents inside. This not only ensures that consumers receive shipments in time, it also places accountability on certain parties for supply chain delays. 
  1. Management systems at ports and warehouses are not yet automated, despite the fact that automated management technology was created in the 1990s and has been developed ever since. These systems use artificial intelligence to automate planning processes, inbounding sequencing, bring-backs, replenishment, case pick, and loading sequences. Without a centralized, automated management system, businesses struggle to get packages to consumers in time. Artificial intelligence can benefit both physical and digital supply chains.

What risks do businesses face if they fail to automate?

If businesses don’t invest in a centralized digital supply chain, they risk:

  1. Failing to deliver shipments on time and meet customer demand. The success of your business depends on how well-received your products or services are by your customers. Unhappy customers are a risk to brand loyalty and revenue opportunities. 
  2. Relying too much on costly physical materials. Automated warehouse management systems can help reduce the use of pallets and other physical materials. In light of current pallet shortages occurring as the economy transitions towards business as usual operations, decreased reliance on physical materials is a strategic investment for companies to be more resilient and sustainable (wvtf).  
  3. Inefficient use of human capital and high labor costs. Without a doubt, humans can do things that artificial intelligence cannot: strategizing, customer-centric marketing, critical thinking, and more. Instead of having workers do manual labor that could be automated, companies should digitize menial tasks so they can save time on tedious processes to focus more on growing their business. 

Implementing even one of the above can help decrease labor costs while increasing efficiency, productivity, and profit. 

Digitization: A Growing Trend

MHI, Deloitte, and CB Insights have researched the number of supply chains that are currently digitized, the expected growth in this number, and surveyed business executives about their perspectives on digital supply chains. Here is what they discovered: 

  • 39% of companies say that supply chain disruption is the most challenging aspect impeding business operations, making it one of the top 6 challenges: 

Source: The 2021 MHI Annual Industry Report

  • 83% of companies believe digital supply chains are the model of the future: 

Source: The 2021 MHI Annual Industry Report

  • 49% of companies are increasing their investments in supply chain innovations, and according to a CB Insights report emailed to Retail Dive, supply chain technology investments have nearly doubled to $8.6 billion over the past year. (Supply Chain Dive

Source: The 2021 MHI Annual Industry Report

Digitization is a trend that more businesses are starting to adopt and investors are starting to take interest in.

No Doubts About Digitization

There is no doubt that supply chains can benefit from increased digitization. Businesses that invest in digital strategies can obtain significant advantages over competitors that continue to waste time and labor on inefficient, costly operations. 

To learn more about digital supply chain technology, visit Venzee at or connect with Venzee on LinkedIn and Twitter.

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