Digital Transformation In Supply Chain

Have you ever stopped to think on how digital transformation will change your job and career? Wondered how soon your job will be fully automated and become obsolete? I have and have not been able to stop thinking about it.

Since I graduated from college about 6 years ago, I have worked in supply chain. I have seen how technology has changed over time and improved the way in which things are done.

The industrial engineer in me loves to find new and more efficient ways to perform tasks. I have been an advocate to invest and use new technologies in our day to day data management to allow us the necessary capabilities to standardize and automate tasks. In the past I have made improvements and automated too many tasks that ended up making my role obsolete. Should I be scared to keep making improvements and utilizing new technologies that could result in my job being obsolete? I do not think so.

Digital transformation will play a big role in defining how the future of supply chain will be. Block chain, business intelligence platforms, machine learning and artificial intelligence are just some tools that will enhance how we do business. Jobs will certainly change and become obsolete with time, but in order to stay ahead of the curve we must continue to learn and apply and implement the new technologies in our field.

How can new technologies be applied in the supply chain field?

Supply chain consists of many different areas, from demand planning, forecasting, logistics, inventory control to manufacturing (and more!). Digital transformation can and will improve most of these functions with time.  I will touch base on the two main areas that I am involved at work – Supplier Management and Demand Forecasting and Planning.

Block chain – Supplier Management

First of all, what is block chain? Block chain is a digital ledger in which transactions between parties are recorded. It provides increased transparency between groups in a secure and traceable document. The decentralized chain of certification allows for the data to be authenticated and maintained indefinitely. The document is unchangeable, unless all parties agree to modify it.

Supplier management can not be successful without trust between both parties. The fact that transactions can not be modified without consensus from the whole team it provides transparency which leads to trust and credibility to everyone involved.

Leveraging block chain for managing suppliers can be beneficial.  If implemented correctly, it allows for shipments to be tracked and provide status updates in real time. The block chain element allows for the transactional records to be recorded and be used to track shipments back to the origin if necessary. This could be very useful in the event of a quality issue or potential recall.

Automation and standardization of processes are other benefits that can be applied and can be enabled with block chain. The transaction log can be used to verify delivery of goods to the destination. Once the transaction is recorded, it can automatically trigger the payment to the supplier (based on contract and inco terms). By standardizing the shipment and payment processes it is reducing the human touch points and could potentially minimize payment errors. This technology can be implemented across

Artificial Intelligence and Machine Learning – Sales Demand Planning

Machine learning, Artificial Intelligence and Big Data are tools that will provide more power and insights to demand planning.  Adeel Najmi says it best “Learning occurs when a machine takes the output, observes the accuracy of the output, and updates its own model so that better outputs will occur.” By leveraging the power behind these models it can analyze and find insights that the human brain can’t. It also has the power to run millions of iterations of specific models to create scenario analysis. The benefit is better insights in less time.

It is important to mention that these tools by themselves can not provide decisions, but guide the user to take more informed and accurate decisions. Data analytics will turn to better decision making.

While there are more ways in which supply chain can change in this digital age, block chain and machine learning are the ones I can leverage in my day to day life. I see my job transitioning from excel models to more robust machine learning / deep learning models. The power of data is something I will be leveraging to my advantage and try to stay ahead of the curve, after all models needs to be created by humans. While my job and others in supply chain may become obsolete in the future, it is best to learn new ways in which we can use the new technologies to our advantage.

So, are you looking at ways to stay ahead of the curve?

Sites used and recommended for further reading:

https://www.cfo.com/supply-chain/2018/08/five-ways-blockchain-will-juice-supplier-management/

https://www.forbes.com/sites/stevebanker/2019/01/01/20-things-to-know-about-artificial-intelligence-for-supply-chain-management/?sh=48221dc53716

https://www.forbes.com/sites/forbestechcouncil/2020/05/27/digital-supply-chain-transformation-preparing-for-future-growth/?sh=1d8e1d361f73

8 comments

  1. Nice post. It will be interesting to see where supply chains go after the pandemic. I heard a bunch of talk about the need for resilient and adaptive supply chains, not just more efficient ones. Will be interesting to see if this continues and/or how it plays out.

  2. I enjoyed reading your post. I like how you linked it to your current career and how changes are being made.

  3. shaneriley88 · ·

    Love it. I’ve lived through these thoughts when Rolls Royce started publicly announcing its work on autonomous vessels. It’s fascinating to think about the United Nations voting to adopt amendments to international shipping and air traffic regulations to account for fully autonomous logistics connectors. (https://www.forbes.com/sites/jessicabaron/2019/01/07/rolls-royces-autonomous-ship-gives-us-a-peek-into-the-future-of-sea-transport/?sh=4aba3c1e659f)

  4. williammooremba · ·

    Really great post. I am currently taking Supply Chain Management as one of my other classes, so I found the information particularly engaging. One of the topics we are currently covering inventory management. I could really see machine learning models making a huge impact in that area, particularly in scenario analysis. I also wonder if companies will invest more in scenario analysis in the long term because of the pandemic.

  5. sayoyamusa · ·

    I appreciate your clear picture of block chain because I had no ideas how it worked in the real business world (although I’ve heard of the word…) Before reading your insightful post, I felt like supply chain management was all about operational efficiency, but I was wrong. With data and technologies, there are a lot more things they can do. Now, I (as a marketer) can ask them for more value creation activities in terms of sales demand planning as well.
    It’s also impressive how you show your growth mindset! Everyone needs it in this fast-paced environment.

  6. Divya Jha · ·

    I love how you explained the use of blockchain in the real world. To someone like me, who does not have a technical background or any understanding of blockchain technology whatsoever, your post enabled me to visualise a serious way to benefit from this technology. Also, now I have a clearer understanding of what people mean when they say blockchain technology will cause many people to run out of jobs!

  7. Hello fellow supply chain professional! I laughed at the meme of the demand planning. I certainly agree with you on how digitalization will change our scope of work and it will not take long. I have seen this first hand while working for my previous organization when we started implementing bots to reduce the number of clicking by a person. Change is scary and I think we will have to adapt and understand that automation does not mean we will be out of jobs, it simply means we will have to adapt to a new version of our jobs. I normally say that there are no arguments against data so I am all for it. What will be interesting to see, on the other hand, is how smaller start-ups will pick up the pace in comparison to large organizations. I was just offered a job in a small company that still uses “green screen ERP” in their (rather complex) supply chain. One of my tasks will be to partner with IT to determine the best ERP system. Now, smaller companies don’t typically have the amount of cash for investments of larger organizations, so I guess, for us, being able to adapt to both scenarios will be crucial for our success. Nice post!!

  8. Having enrolled in the intro to blockchain course here at BC with Bennett Collen, I can adhere to how amazing and quickly some of these technologies are coming to the forefront and all the potential business applications that exist. I think it’s always a catch 22 when it comes to finding efficiencies in a particular role. The speed of technology is getting faster and faster and we are forced to adapt quickly when it comes to being on the right side of change in a role. Being aware of Blockchain and how it can positively benefit your role will give you a leg up on those that resist or don’t attempt to understand the emerging technology.

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