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Can Digital Transformation Transform the Supply Chain?

Jan 4, 2022 | IoT, Manufacturing, News, Research

The last two years have completely shaken the supply chain. Disruptions in shipping and port operations have left container ships lingering off coasts worldwide. Production of complex components like computer chips and mobile phones has been stifled by delays in raw material delivery. Disruptions are to be expected, but the resulting negative effects can be prevented with a digital transformation of the supply chain. Let’s take a closer look at what this transformation entails.
How the Digital Transformation Will Revolutionize the Supply Chain - SAAB RDS

How the Digital Transformation Will Revolutionize the Supply Chain

New Technologies in the Supply Chain

Currently, the supply chain is far from fully digital. While many companies and shipping networks keep digital records of their products’ movements, this data is trapped in silos. The manufacturer knows where their parts are headed, but the destination port doesn’t know what’s about to arrive. The goods themselves need to be the data. We need to be able to track every item at every step of its journey through the supply chain.

With comprehensive data collection and sharing, the supply chain can become more flexible and efficient. Like any other chain, however, the supply chain is only as strong as its weakest link. Less developed countries often lack digital infrastructure at ports. Fortunately, foreign investment in new technologies is helping to lift the entire chain up. Here are some of the tools that will make supply lines stronger than ever:

Blockchain Technology

Although blockchain is primarily associated with cryptocurrencies, the technology itself can be applied to virtually anything. A shared, distributed ledger that provides an accurate, real-time report of activity is exactly what the supply chain needs. Imagine every shipment having its own unique ID number which is recorded onto the blockchain. Each movement is logged and updated in real time. This isn’t unimaginable; banks and some shipping companies have already started using this technology.

The challenge moving forward will be integrating various companies’ systems. A single global supply blockchain should be our long-term goal. However, this will likely need to be coordinated through international organizations, as a single standard must be adopted for the system to work. Nevertheless, the supply chain issues of the last few years have inspired political will. We may see this sooner than you think.

Artificial Intelligence

With a global blockchain established, we’ll have a deep pool of data to draw from. That data can be fed into machine-learning algorithms, a form of artificial intelligence. Over time, AI will identify trends and patterns in the data. Once enough data has been gathered and analyzed, artificial intelligence will begin to predict future events. Naturally, every business will look to apply AI in unique ways, but we’ll all be using the same base data.

So, a mining company’s AI may notice an increased demand for their raw materials in a region as more shipments of that material head in that direction. Managers may make the decision to pursue more sales opportunities in that region. A shipping company may find better routes that result in a higher rate of cargo space usage. Governments can intelligently decide where to place a new port. Better decisions make for a better supply chain.

Automation

The final step, and the one that will produce the most profound change, is automating as much of the supply process as possible. After data is gathered and an AI can make accurate predictions, we can allow it to make decisions. Picture automatic rerouting of vessels to avoid natural disasters or dangerous waters, automated container placement for faster loading and unloading, even automatic contracting of ground-based shipping based on a ship’s contents. All of that becomes possible.

With a fully automated supply chain, businesses can focus on production instead of logistics. Prices will drop as an entire facet of global business becomes an afterthought. For this vision to become a reality, businesses need to start implementing these technologies now.

Starting a Digital Transformation Strategy

The supply chain is no single entity. It is the product of thousands of businesses interacting in a global market. That means that each business needs to invest in these technologies to be able to enjoy the benefits we expect to see in the future. You need complete data collection, real-time tracking, and AI-based analytics. Contact SAAB RDS to schedule a meeting. We’ll help you forge a new way forward.