What is a Digital Supply Chain
A digital supply chain integrates advanced digital technologies to enhance the management and optimization of the entire supply chain process. By utilizing data generated at each stage of the supply chain, digital supply chains enable organizations to make informed, data-driven decisions. These insights help to better plan, manage, and strategize operations with greater accuracy and efficiency.
Digital supply chains leverage tools like IoT (Internet of Things), AI (Artificial Intelligence), machine learning, blockchain, and cloud computing to enable real-time data collection, analysis, and decision-making.
Modern vs Old-school Supply Chains:
How does the concept of a Digital Supply Chain compare to supply chains of the past? Digital supply chains offer more efficiency in key areas that help businesses thrive.
| Category | Old-school supply chains | Modern supply chains |
|---|---|---|
| Technology | A mix of paper and spreadsheets, legacy inventory management and forecasting software—and telephones! | Cloud-based SCM systems integrated with finance, manufacturing, and even HR cloud services, with low-cost communications capabilities that keep everyone connected at every stage of the supply chain. |
| Scope | Small, mostly regional, some national. International only for products and raw materials that can be obtained at higher quality or lower cost. | Multinational, but balancing global partnerships with the need for diverse partners from different geographies to ensure redundancy. |
| People | Managing manual processes, with little insight into potential supply chain disruptions. | A complete view into the needs of every stakeholder—from internal stakeholders managing the factory floor to external vendors and customers. |
| Results | Ready to take advantage of technological advances in transportation, communication, and planning. | Using the latest advances in IoT, AI, and robotics to handle volatile and changing trading environments and contribute to a more sustainable future. |
Transforming to a Digital Supply Chain:
Before planning a supply chain system upgrade, it’s important to understand the goals and expected results. Apps’ customers are typically looking to improve these four main areas:
- Enhance visibility: Stakeholders can track products, assets, inventories, and resources across the entire supply chain and gain accurate, real-time data on customer demand.
- Improve efficiency: By automating or eliminating manual processes and consolidating others.
- Reduce lead times: By increasing production throughput.
- Enhance collaboration: To reduce errors and increase the responsiveness of various stakeholders, including suppliers, distributors, manufacturers, and retailers.
Leveraging Advanced Technologies
The digital supply chain is equipped with IoT devices like sensors and monitors that collect data from manufacturing and logistics processes. This data is then transmitted through IoT gateways, enabling stakeholders across the supply chain to access and analyze it.
To fully benefit from digital transformation, companies must shift from the traditional linear supply chain model to a networked approach. This model offers greater flexibility and responsiveness to changes within the supply chain.
Blockchain in the supply chain creates an immutable ledger that records every transaction and movement of goods, ensuring data accuracy and security. This allows stakeholders to verify and audit the supply chain in real time.
AI (Artificial intelligence) tools help build “smart and responsive supply chains” by boosting workforce productivity, expanding visibility, speeding up processes, and prioritizing actions to drive results. AI improves with use—machine learning models become more effective as they process more data, providing valuable insights to supply chain planners. AI supports various supply chain functions, including planning, inventory, warehouse management, transaction processing, transportation, monitoring, and inspection, with new use cases emerging. Manufacturers use AI to derive insights from large datasets, enhancing assembly, logistics, and workflows, while also automating repetitive tasks to reduce manual labor.
Incorporating IoT, AI, blockchain and robotics helps companies better manage volatile and unpredictable trading environments. These technologies also enhance supply chain sustainability and efficiency by minimizing waste and reducing environmental impact.
Benefits of a Digital Supply Chain
A digital supply chain can have several benefits as compared to old-school supply chains. The advanced technologies offer:
Increased Personalization: Digital supply chains empower companies to segment customers more effectively, allowing for tailored services and options. Customers can choose delivery methods and times that best suit their needs, enhancing satisfaction and customer experience.
Greater Flexibility: Traditional supply chains can face delays that can take hours, days, or even weeks to be communicated. In contrast, digital supply chains provide real-time updates, enabling quick response to disruptions, adjustment of plans, and reroute of shipments.
Improved Planning: Predictive analytics play a crucial role in digital supply chains. Companies can use advanced forecasting models to anticipate changes in demand, optimize inventory, and plan for disruptions, ensuring the supply chain remains resilient amid dynamic market conditions and unforeseen events.
End-to-End Connectivity and Visibility: One of the key advantages of a digital supply chain is the ability to monitor the entire process from start to finish. Real-time visibility allows tracking every stage of the supply chain and make data-driven decisions instantly, ensuring smoother operations and better outcomes.
Integration with Oracle:
Oracle provides powerful cloud solutions that drive digital transformation in the supply chain by integrating business processes and improving operational efficiency. Key elements of Oracle’s integration approach include centralized applications, advanced technologies, and seamless collaboration with trading partners.
Oracle offers cloud-based Supply Chain Management (SCM) systems that integrate seamlessly with other enterprise functions like finance, manufacturing, and HR. This integration provides a unified view across the organization, while low-cost communication tools ensure constant connectivity throughout every stage of the supply chain.
Learn more about Oracle SCM Cloud modules.
Conclusion:
The digital supply chain represents the shift from traditional, siloed supply chain operations to interconnected, data-driven, and agile systems that leverage advanced technologies. This shift is driven by the increasing complexity of global supply chains, customer demand for real-time information, and the need for greater efficiency.
As businesses increasingly adopt digital supply chains to enhance efficiency, agility, and customer satisfaction, Oracle Fusion Cloud Applications provide the ideal infrastructure to support this transformation. By integrating advanced technologies like AI, machine learning, blockchain and real-time data analytics, Oracle ensures that businesses can adapt to the ever-changing demands of modern supply chains while staying competitive, secure, and sustainable. In short, Oracle Fusion Cloud applications offer businesses a future-ready solution for thriving in an increasingly digital and connected world.
To discuss your Supply Chain roadmap with our industry and Oracle experts, get in touch today.