Supply Chains In The Digital Age: A Competitive Perspective
A dynamic and fiercely competitive market, along with a not easily tied down and demanding customer, are posing challenges to businesses, including to supply chain vendors and Third Party Logistics Providers (3PLs). A proliferation of channels and customer touch points is another challenge. Many retailers are opting for omni-channel approach.
From their point of view, the customer has become center of all transactions and conversations. Customers are asking for a single view across different channels and touch points, as well a unified and cohesive customer and brand experience. They are asking for single-day delivery, green supply chains, and integrated supply chains.
There are opportunities, created by advancement in information technology in the area of Internet of Things IOT and the amount of data and intelligence that can be are available from information systems, for optimization, better decision making and increased returns and better profitability.
It’s not as if supply chain companies have been slow to join the digital movement. Some have automated certain sections of the supply chain. Robots have begun to be used to perform labor intensive and routine tasks. While this has mostly happened to warehouse and distribution tasks, like order picking and selecting, it has also happened in customer facing tasks such as purchasing, invoicing, accounts payable, and customer service.
So, what exactly does the new digital wave hold out to supply chains as advantages or benefits?
Firstly, digital places certain constraints before it offers benefits. The operations of the entire business, including the supply chain, needs to be connected and integrated. Next, all the processes or work flows need to be optimized for the supply chain to leverage the advantage of digital, through speed of execution and responsiveness to customer requirements.
Supply chains have traditionally relied on information to be efficient as well as for customer satisfaction – information about expected delivery, information about status, etc. Most of this information traditionally was related to order execution and customer service. However, digital allows supply chains the unprecedented information that helps them to anticipate orders and demands, to purchase and inventorize based on these predicted and anticipated demands. Artificial intelligence allows supply chains to model the order cycles, frequencies of cycles, fulfilment of cycles, seasonal factors, and so on, and to predict and to anticipate emerging demand. This helps them plan, schedule, purchase, store better and thus provide better customer satisfaction. Digital enables supply chains to become proactive and more engaging with customer, rather than the traditional reactive mode of operation.
With the rise of omni-channels, companies usually handle many channel providers. The result is that the supply chain operational space for the company has become fragmented and very unwieldy to manage. Digital offers remarkable capability here, by integrating all the channels and providing the customer and the client with one single view of the supply chain, across channels and touch points. For a supply chain provider, offering this could mean significant competitive advantage over other players, who are still in the traditional mode.
Also, even though retailers have opted for omni-channel retail experience for their customers, the experience for the customer is not a unified one.
Digital offers a truly unified experience that includes:
• Automation and integration of sales, marketing, business operations and the different locations and people
• Personalized customer service
• Real time customer analytics and metrics for decision making
• Mobile integration
• Easy intuitive interfaces across web and mobile devices
• Simplified checkout process and payment
Finally, digital makes the customer truly the center of all operations and decisions. It could well be the strategic differentiator and competitive advantage that supply chain companies are looking for.