Technology is touching and changing every part of our lives. We rarely walk into shops to buy things nowadays; we just order them online. The way products get from companies to warehouses and our doors is called a supply chain. Technology is changing the way businesses handle this process, and even though it makes things easier for the customer when things are done this way, businesses are concerned with how technology will change supply chain management and all the integrations they will have to undertake to make it happen.
It is not all bad though because, after this rough patch, everything will be better. There is value in integrating technology into supply chain management, and below we will look at what value all stakeholders and customers can derive from this technological advancement.
Understanding Supply Chains
A supply chain has two ends. There is the production and the customer end. The production end starts at the factory and ends at the warehouse. From there, the business takes over to fulfill orders and deliver goods to their customers. Technology can come in at any of these points. The biggest use of technology in both areas is tracking and analysis.
Factories want to know where their raw materials are, businesses want to know where their inventory is and customers want to know if their order has been shipped or delivered. The most dramatic shift in the use of technology in all three of these areas is on the customersâ€™ side. Customers want to feel assured that their packages have been shipped and want to know precisely when they have been delivered.
Changing How We See Technology in Supply Chain Management
Delivery of goods to our doors is a service companies could point to in order to differentiate themselves from other companies. Now, it has become more of a necessity and less of a value add on. Because of this, businesses have to digitize all their processes to make things smoother for them and their customers. These integrations take time and money and these are the two biggest annoyances for companies that want to stay competitive.
Even with these annoyances, businesses can now use the same technologies to build end-to-end supply chains and remove any hiccups in the supply chain. Businesses can also use these digital systems to get real-time information about their supply chain. The software used in this process can send and receive information to and from different partners to enhance processes such as:
â€¢ Inventory management
â€¢ Improving manufacturing efficiencies
â€¢ Meeting customer needs as quickly as possible
The Value of Technology
1. Improved collaboration between different partners – Digital systems allow real-time information sharing between partners. From this information, manufacturers can track all their products right from their factories to a customerâ€™s door. They also have an insight into the performance of different partners so that they can understand the market better with the help of information provided by these partners. Due to the valuable insight manufacturers get, they can better streamline their processes and lower costs through timely procurement and management of contracts they have with different partners.
2. Better inventory management – All businesses have to manage their inventory efficiently. A business does not want to incur storage costs for products that do not sell. On the other hand, inventory that is too low can lead to delays and that can lower customer satisfaction. Using technology, businesses can monitor demand and supply to better manage their inventory.
3. Better order tracking and delivery – Order tracking and delivery is another huge challenge for businesses. Companies that do not deliver goods on the day they said they will often have the lowest customer satisfaction levels. Companies need to know what orders are in, what’s on the road or in the air, and what has been delivered to their customer. Technology allows them to do all this. Companies can also use the tracking information they have to keep customers in the know about the whereabouts of their goods. This helps ease anxiety and customers feel taken care of by the business they ordered from. In addition to customers, businesses can also talk to their logistics partners to get updates on inventory and product delivery.
The Benefits of Leveraging Technology in Supply Chain Management
After studying for a degree in supply chain management from Kettering University Online, a supply chain manager will fully understand the need to reduce costs in a business. Technology can help reduce these costs in a supply chain in several ways:
â€¢ Technology shifts the work of checking on shipments to the consumer. If a business has a tracking app or website, they do not have to employ someone to check on shipments and let customers know – the customers can do that themselves.
â€¢ The inventory management options that come with supply chain management software allow companies to reduce wastage by reducing warehouse costs and allowing manufacturers to order just what they need when they need it. If manufacturers can order their materials at the right time, aided by information supplied by their partners on market demand and trends, they can save huge sums of money.
â€¢ Technologies such as autonomous cars and trucks will save companies huge sums of money on transportation and energy costs alone. Also, the demand for truckers and drivers will fall as we integrate autonomous driving into the supply chain system which is another area in which companies could save money.
Companies are now delivering goods faster than ever before thanks to technology. The consumer is the biggest beneficiary here with companies that can do this seeing high user satisfaction metrics and the willingness of customers to buy from them repeatedly. The result of this is higher profits and an increase in market share for these companies because people talk to their friends and family about different experiences they have had.
Technology will disrupt supply chain systems for the better. It may be a little bit tough for companies to take full advantage of these developments right now, but once they have integrated technology into their operations, things will be a lot smoother.