One of the pillars of any online business is, naturally, smooth supply chain. The effectiveness of this operation determines not only the distribution efficiency but also the quality of your products, and customer satisfaction.
The supply chain is, without a doubt, one of the key components of your business activity and changes storming through the business world didn’t leave it unaffected. One of the biggest transformations is the adoption of modern technologies and workflows in pursuit of efficiency.
Digitized supply chain management has single-handedly revolutionized online business by allowing for increased visibility, accountability and tracking — it has come a long way since its function as a tool for resource management. Today, digital solutions enable supply chain to maintain situational awareness and make context-sensitive decision making in every step of the process. It not only increases overall efficiency and reduced operational costs but also steers your business towards improved customer experience and, hence, revenue growth.
To help you keep up with the market demands, this article will introduce several different ways you can “pimp” your supply chain and open boost your supply chain efficiency. But first, let’s have a look at the ins and outs of supply chain!
Understanding the Supply Chain Ecosystem
In a vast majority of businesses, products are distributed and delivered to customers using a standardized process. The marketing team analyzes buyer demand and attempts to predict the sales for the upcoming period. Based on that information, your manufacturer (or drop shipping partner) orders materials, components or parts to satisfy the predicted demand.
If all is well, the gap between demand and supply is minimal. However, this is rarely the case especially if the business still relies on traditional workflows where manufacturing often operates in isolation from marketing, suppliers, customers, and other partners. Without a holistic overview, even the smallest inevitable mishaps along the way can grow into costly problems.
Forecasting is an inexact science in essence. Nonetheless, thanks to multiple advances in the field of technology, the craft of efficient prediction is being perfected every day. The goal behind digitizing supply chain is very ambitious: to build a supply network that is resilient and responsive. However, to make the ecosystem work smoothly, you can’t think just about the technology but also your business capabilities. For example, you need to ensure you have people with right skills who are willing to carry out and oversee the necessary changes and teams or individual members that are open to more interactive collaboration.
Pillars of Effective Digitization
Before we get to the tech itself, there are a few core aspects you have to keep in mind as you work towards digitizing your processes.
1. Adopt Comprehensive Approach
It’s barely enough to choose a few random tools and call your supply chain digitized. Whatever software you decide to adopt, make sure they are connected via unifying technology. Compatibility will ensure visibility and accurate data flow.
2. Maximize the Value of Digital Supply Chain
Yes, efficiency and cost cuts are the most attractive features of the digitized supply chain. However, don’t get blinded by the lowest hanging fruit, there is much more to be gained. To maximize your benefits, make digitalization a part of a bigger strategic plan and design your supply chain accordingly.
3. Work Towards Customer Centricity
Whatever step you take, make sure you walk towards a great holistic customer experience. Satisfying demands of modern consumers requires absolute visibility, agility, real-time data, and intelligent analytics. Make sure your supply chain provides all the information and qualities you need to take your online business to the next level.
4. All for One, One for All
The pillar number four is about ensuring everybody in the company is on the same page, including the CEO (if that’s not you). Digitalization is far-reaching and intricate and should be rightfully treated as a high-profile initiative within the company — no matter how big or small. In other words, everybody needs to be on board, from the bottom to the top.
5. Adopt Long-Term Approach
Digitalization doesn’t happen overnight and might not be fully in place even after a year. There are wide differences between companies and their levels of digital maturity of the supply chain. Plus, the tech inventions and discoveries don’t stop. Each year there are new, better technologies to be considered. Thus, the last pillar to the success of your digitalization is accepting it as a long-term project that requires careful application and nurturing over-time.
Key Supply Chain Technologies For Your Online Business
Here are a few tech ideas to transform any supply chain into an entirely visible and trackable process.
RFID Technology
One of the biggest headaches of any supply chain manager are the anomalies and mishaps that occur when a product is already in transit. The answer to this impending issue is the adoption of Radio Frequency Identification technology (RFID) which works on the basis of a semiconductor chip and antenna. Thanks to RFID you can easily and accurately monitor every single product from production to your retail partner or end-consumer. RFID chips are attached to all products and thus, help employees quickly catch any anomalies in order shipments. It is a smart, simple way to solve a problem before it reaches the end-consumer and leaves a permanent mark on your company image.
RFID increases visibility your goods throughout the entire process and thus, decrease fulfillment time, eliminate errors, cut costs, and become more competitive. Even if you are working with dropshippers and application RFID isn’t in your power, it is a feature to look for when picking reliable suppliers!
Electronic Data Interchange (EDI)
EDI technology is perfect to transfer business documents and other essential paperwork from one digital device to another (or one organization to another). It’s a way to turn your business completely paperless and simplify the necessary routine processes to the maximum.
The core difference between sending an email and using EDI message is that email needs to be handled manually while EDI message is composed by one software and received and interpreted by other. All messages are structured and have legal standing in a court of law. It’s most commonly used by B2B businesses. However, it can have much wider application. For instance, it’s also a great to use internally to maintain paperwork visibility and eliminate human error within departments. Businesses transferring from B2B to B2C model might find EDI especially useful to keep track of all paperwork.
Improved Weighing Technology
The vast majority of industrial facilities still uses old truck scales which are inefficient and often compromise overall efficiency. Digitization offers an upgrade to handy onboard truck scales which sustain seamless operations even if access to platform scales is unavailable.
These ingenious scales measure the weight of the payload as well as the gross weight of the truck. They will alert the system in real time if the vehicle is not used to its maximum load capacity from the point of loading, thus saving you both time and money.
Again if running a warehouse doesn’t depend on you, but your dropshipping partners, inquiring about this technology is worth a second. If your supplier is reliable and efficient, your business will likely be so as well.
Shipping Management Software
Offering multiple shipping options, from basic to same-day delivery, is quickly becoming an expected standard in the world of online retail. Thus, many businesses end up working with several different carriers, even more so, if these businesses ship internationally.
While having multiple delivery options satisfies the consumer needs, it often creates complications for the retailers as it’s hard to keep track of multiple providers, rates, and conditions. To sustain this trend long-term, you need to be organized, and digitalization of the workflow (e.g., payever Shipping App) is the best way to keep the situation under control. A lot of available software provides handy features such as automatic order synchronization, shipping rate monitoring and customization, multiple carrier management, etc.
Cloud-Based Inventory Software
Well-managed inventory is a crucial part of your supply chain. Let’s face it; it can get pretty messy, especially if you are working with multiple delivery providers. Many online and offline retailers struggle to balance out the uncertainty of consumer behavior and more complex supply chains.
Therefore, implementing a cloud-based inventory tool means you will be able to track your supply chain in real time, analyze fresh data and answer demand changes with more agility and flexibility. In other words, an organized digitized system allows you to answer market fluctuation on the fly and also, for example, ensure you don’t oversell your products when selling on different platforms at once.
Effective Communication
Another essential part of a smooth supply chain is effective communication. We live in a time when the instant multi-channel exchange of information is not a sci-fi fantasy. A plethora of online and digital tools are waiting to be leveraged.
Communication practices include person to person exchanges as well as automatic data sharing via wireless convergence using GPS, voice recognition or digital imaging. For instance, thanks to digital imaging shipping staff can capture proof of delivery or record information such as damage and have the information instantly uploaded to your centralized system.
Whatever software you decide to apply to your supply chain communication network, don’t get carried away thinking simply implementing tools will make your processes more efficient. First, analyze the workflows and processes that create friction, only use tools and software that addresses these issues, and make sure everyone knows how to use it. Too much tech is as bad as none at all.
Social Media
Taking advantage of social media is the right step towards customer centricity. For instance, Facebook active monthly users are over 1.3 billion, so it only makes sense for online businesses to leverage their reach for optimizing their supply chain operations. It’s an easy way to keep in touch in real time with all of the stakeholders in your supply chain. You can easily respond to queries, send real-time updates about any mishaps, incidents or price changes while at the same time increasing the visibility of your business.
Data Analytics
The best and most crucial advantage of digitalization is the capability to collect real-time data and apply it through advanced analytics. You will be able to ameliorate your forecasting precision as well as better observe analyze, observe, and manipulate customer behavior.
Knowing which product is in demand when or for what demographic it is most attractive will help you optimize your production, warehouse storage, and render your sales more efficient. You will also be able to analyze and uncover the points of friction more quickly and thus, prevent small issues growing into significant problems that can threaten your business.
Conclusion
Most leading companies have already made calculated strategic investments in their supply chain management to overcome the, still common, ineffective cross-functional silos. If you want your business to keep its competitive advantage and continue growing in the increasingly competitive digital climate, you need to take steps to eliminate barriers among teams and departments. Smooth communication and real-time data are the future of business, and the future is already here.
