{CIOPages.com supply chain transformation drivers is a hub of resources for enterprises on a supply chain transformation program, including customizable deliverables.} There are many imperatives and supply chain transformation drivers. Few segments are seeing a transformation equal to that of logistics and the traditional supply chain. Technology is, of course, changing every aspect of life and business. However, it is totally redefining capabilities and expectations in every aspect of operations and processes for producing, handling, shipping and delivering products.
An Irresistible Force Meeting Immovable Objects
While technology-driven changes in the supply chain have been underway for more than three decades, the rate of disruption of traditional processes is at an all-time high. While as much as a third of companies that ship, warehouse and fulfill are still doing things as they always have, that will not be possible for much longer. It is not an overstatement to state that participants in the logistics space are now facing a change-and-grow or stay-and-die environment.
Accordingly, it is worth evaluating the leading factors that are driving this now-inevitable transformation of the value and supply chains. Below are five supply chain transformation drivers that are creating the new environment for supply chain companies:
Key Supply Chain Transformation Drivers
While technology-driven changes in the supply chain have been underway for more than three decades, the rate of disruption of traditional processes is at an all-time high. While as much as a third of companies that ship, warehouse and fulfill are still doing things as they always have, that will not be possible for much longer.
- The rise in service over product. Manufacturers have always sought to differentiate their products by price, quality and/or selection. Increasingly they find that service before and after the sale is equally determinant of success. The supply chain is likewise a growing factor in delivering, servicing and exchanging products for online customers. Online vendors are replacing brick-and-mortar providers, but consumers are now expecting them to deliver equal or better services as those providers.
- Vendor and end-user expectations. Real-time transparency of the logistics process is now a common competitive factor. From the manufacturer to the consumer there is a desire to automatically and instantly know heretofore unknowable information about inventory, delivery, and status of each unit in the chain.
- Growth in cloud and technology capabilities. Cloud-compatible apps and software change the competitive landscape in significant ways. While large companies make multi-billion dollar investments, the technology produces equips even the smallest firm with competitive capabilities via the cloud and minus the huge capital outlay. This, in turn, feeds the expectations of vendors and end-user for every participant to provide similar capabilities.
- Cost factors and efficiencies. While minimizing capital outlays is a major innovation driver, new technologies such as the cloud, robotic process automation, and simulation provide new efficiencies at every level of the supply chain. From more efficient automated warehouses and routing to automated customer information the industry is seeing a demand for lower costs while delivering more comprehensive and speedy services.
- Data-driven management. The capabilities of Big Data empower management and decision-makers with new insights into even the most arcane aspects of their business. The analytics that turn these massive amounts of data into actionable information allow management to act more rapidly, often in real time, to change their processes and achieve competitive advantages. This area alone is creating knowledge bases that allow the supply chain to be seen in a totally new light.
While these are only five of the many drivers creating an entirely new approach to logistics, they indicate just how much the idea of moving product from here to there has entered the digital age. Moreover, it clearly shows the critical need to jump on Supply Chain transformation digital train or risk being left at the station.