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Currently, we’re in a period of growth for supply chain management. With the digital revolution bringing industry players around the globe closer together, business operations have expanded for companies big and small. As both business owners and consumers, we’re experiencing the changes every step of the way as well.
Each change brings with it a new set of challenges and benefits. This beckons in a new set of industry rules, and companies are left to learn them while keeping their operations running. If adopted and implemented poorly, this can stagger a business’s growth. That said, it’s necessary to understand these changes beforehand in order to weather them when they hit you.
The melding of physical mechanisms and digital systems
The average business owner is no stranger to physical threats to supply chain efficiency, especially if they’ve been around for a while. For instance, though it is one of the most conventional ways of moving goods, truck transportation can be very dangerous. Incidents on the road have long been problematic in the process of manufacturing and distributing products.
However, the progression of digital tools and the involvement of data has added another layer to the complex journey that brings products to consumers. For the most part, digital and databased technologies have made the supply chain system more efficient. While challenges exist, the pros outweigh the cons.
Big data insights can help entrepreneurs identify weaknesses in their supply chain, whether that be a lack of sufficient technology, staff, or organization. With this information, they can take real action to streamline the chain, enabling them to respond more flexibly to changes in the market.
Automation technology is an excellent example of advancements that can help business owners achieve greater efficiency. Companies like Amazon have already started incorporating automation into their practices. It would be wise to learn from their efficiency and apply it to your own operations.
Speaking of data, it’s important to be constantly evaluating your data security practices. A good data security plan takes specifics into mind — and with supply chains, there are a lot of seemingly minor specifics involved that could disrupt the entire flow of a business if mishandled. After all, when we talk about new technology in supply chain management, a lot of it has progressed due to the inclusion of data.
Data advancements are certainly what has brought in this new age of supply chain management, but failing to protect data can have disastrous consequences. As businesses exchange information with a variety of suppliers and vendors, new potential data security risks arise. When you factor in subcontractors and other players, it’s likely that companies aren’t even aware of all those involved in their own supply chains.
Maybe that last sentence sounds odd to you. How could companies not be aware of everyone involved in their business? With large-scale operations, however, there may not be apt time or labor to closely watch everything. Different parties who can take care of specific parts of an operation are trusted to do so. Unfortunately, this means some problematic actors may slip through the cracks from time to time. So stay up to date on the best data software and updates to keep that data safe.
As business practices change, the tools that keep them running also change. Since data is so heavily involved now, new precautions should be taken. For instance, implementing new incident response mechanisms is necessary in the digital age. After all, with efficiency improvements, people will expect things faster.
We’ve already mentioned that getting on the automation train is a good idea, but it’s also important to have safeguards in place to provide that these automated systems work how they’re supposed to. Nothing is perfect, so if these systems don’t account for everything necessary or lose something along the way, companies will need a way to handle this — and fast!
Lastly, something to keep in mind with all of this is the terminology is changing! Have you heard of “the digital supply chain”? As described by Forbes, it is “a conceptual umbrella term that will continue to be used to identify supply chain software, communications, and automation efforts that meet certain digital criteria.” The changes seen by these approaches are truly transformational.
Within the digital supply chain, we will keep measuring and testing new tools and practices, holding them to the necessary scrutiny to see that they are working at maximum efficiency.
The digital age has brought on an entirely new era of supply chain management. Physical systems are becoming automated and interconnected with big data. We can’t underestimate the importance of protecting such data in a supply chain. And ultimately, companies need to be aware of how they must adapt to new technology. If they are able to, we will see systems around the world improve in efficiency, speed, and profit.
What is your best advice regarding new supply chain technology? Let us know in the replies below.