Digitization – A Key to Success in Supply Chain Management

Supply Chain is usually seen as a cost. Digitization enables a paradigm shift making supply chains a differentiator and a tactical pillar of brand-new organization designs.


The supply chain exists to enhance the processes involved in procurement and as a way of increasing effectiveness business-wide. In addition to ensuring the security of important info assets, business likewise have the obstacle of accomplishing a suitable level of sustainability, while pioneering and advancing the digital supply chain in general.

One method to lower expenses is through a digital supply chain platform. The digitization of information and the application of partnership, automation, and analytics innovation provides the chance to drive business worth throughout the worldwide supply chain.

A digital supply chain will assist to reduce risk, improve dexterity, and reduce expenses in many locations of company’s operation. According to IDC quotes, by 2020, digitally-mature companies will accomplish $430 billion in productivity gains.

In Today’s cost competitive market, every company attempts to keep their cost at minimum level by optimizing stock levels to ensure more full-price sales. Digitization eliminates barriers to supply chain productivity by application of digital capabilities to processes, products, and assets to enhance effectiveness, improve consumer value, manage risk, and uncover new monetization opportunities.

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Advantages of digital improvement supply chain management

There are many benefits as companies digitize their supply chain procedures with contemporary SCM systems. Below are primary of them

Just-in-time’ Techniques:

Just-in-time (JIT) becomes accessible. JIT manufacturing has actually been a cornerstone of a few huge business for decades, but the innovation backing it was inaccessibly pricey. Now, every enterprise can delight in a digital supply chain that makes sure that critical decisions and deliveries are pressed to the eleventh hour. Doing so optimizes decision making and saves expenses.

Just-in-time (JIT) particularly in Fashion/Fabrics market, style brands can postpone critical choices on design adoption, item quantities, and so on, up until the last possible minute– permitting them to create styles much closer to last shipment date and to take advantage of the current trends.

Improve cash flow:

With lower lead times and a JIT approach a digital supply chain reduces capital requirements and improves cash flow as less cash is tied up in keeping excess stock in a warehouse. Supply chain data becomes accessible. The faster the supply chain moves, the less capital is bound in the supply chain– a crucial benefit of digitizing your supply chain management procedures. Expense of working capital will considerably minimize primarily due to prompt delivery of products and it turns to quick recovery from consumer.

Enhance supply chain lead times:

These include factors such as the preparation for basic materials, reserving production capacity to make sure factory schedule at the correct time, and distribution preparation.

Make it possible for a demand-driven supply chain:

A demanddriven supply chain is the core of supply chain management; without a digital system, though, it’s impossible. Digitization permits companies to adjust products in the supply chain based upon need for those products utilizing real-time sales info, enabling them to speed up production of best-sellers.

Out of Stock:

Supply chains end up being forward-looking. Rather of operating on a reactive basis, digital supply chains permit business to predict future requirements as more information is collected, examined, shared and get rid of supply chain problems. A digital supply chain can ensure that your company never runs out of stock, nor orders too much stock– which eventually leads to high discounting.


Supply chains include several parties that need to engage on a frequent basis. Raveling these interactions is the predominant goal of a digital supply chain. A digital supply chain can eliminate manual procedures and instead connect enterprise digital systems into a single, fluent communications channel. Needless to state that, an expense reliable digital supply chain functions as an essential to success in supply chain management.

( Post published by Indian Institute of Management in ‘Products Management Review’– Digitization Produces a Strong Worth Chain Generating Expense Decreases November 2019 issue)

By CMA Vinod Shete


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