Digitization is not the future of effective supply chain management; it is the present. Organizations that are slow-walking the adoption of a digitization initiative are risking their competitive advantage and leaving significant money on the table across every link in the supply chain. Nevertheless, it is easy to understand why organizations might not pursue this important practice aggressively enough. Here’s what’s holding many back from realizing a digitization strategy; what companies can do to embark on a path towards this goal; and why it is imperative to begin today.
There’s No Magic Software
End-to-end supply chain management automation professionals have mostly rejected the “Lord of the Rings” approach to technology selection having realized that there is no “one software platform to rule them all.” When it comes to the many interlocking links in the supply chain, even the largest tech providers have not succeeded in fielding a “One Ring” solution that effectively addresses order management, transportation logistics, fleet management, warehouse/inventory management, yard management, financial management, etc.
Building a Tech Stack Seems Complicated Enough
Instead of looking for a single-source solution, most enterprise-level companies select “best-of-breed” solutions for each functional segment, layering these disparate technologies to build their supply chain “tech stack.” While arguably the correct way forward, this process presents numerous clear and present challenges which may distract companies from making overarching digitization a priority. In fact though, digitization must be at the center of the decision to engage each and every individual application in your supply chain tech stack.
Where to Begin
A recent CapGemini research report titled, “The Digital Supply Chain’s Missing Link – Focus” offers three broad areas critical to strategizing, planning, building and executing a digital supply chain management practice. Area one involves strategizing and planning, calling for strong advocacy of digitization from the top down and aligning supply chain vision with the overall enterprise goals. Area two involves building the ecosystem of technologies that support digitization, fostering collaboration across functions and working towards establishing data-driven processes across the organization. The third area deals with enabling digitization by driving a customer-centric mindset in supply chain design and execution. The common thread winding through all three areas is the ability to engage solution providers ready to engage all three of these broad goals. So how does an organization find such providers?
What to Look For in Technologies and Providers
Ensuring each new app added to the tech stack offers concrete digitization capabilities to enable smooth, efficient integration and data management is essential. For a transportation management system (TMS) platform, this means being able to accept all manner of supply chain information sent using a broad array of data formats from all the relevant supply chain applications that touch transportation logistics. As the infographic below illustrates, a digitization-ready TMS must be able to parse and normalize all that disparate, inbound data for effective manipulation in TMS before sending logistics information back out to downstream systems in its native format.
This capability supports more effective transportation logistics performance, predictive analytics, and overall improved transportation management. It also provides easy data visibility between other supply chain platforms that enables more effective resource planning, supplier collaboration, manufacturing process management, DC throughput, customer service and overall operational efficiency. It also positions an organization to succeed at unlocking the benefits of supply chain digitization from end to end.
Wherever an organization is in their supply chain automation journey – just beginning to automate processes in all segments of the chain, integrating new systems like TMS or yard management (YMS) with existing ERP implementations, or replacing/upgrading outmoded incumbent solutions – it is critical to keep the overarching goal of digitization in focus. It may seem more effective in the short term for an organization to focus only on the functional aspects of the solution selection and consider digitization goals as a secondary or even “Phase II” project. In reality, it makes more sense to make hard decisions at the outset and undertake the due diligence necessary to source solutions that accommodate both their functional goals and broader digitization goals at the same time.
It takes time and money to select and implement each new app in the tech stack and implementing less-than-optimal technologies is costly and detrimental to building momentum in supply chain management. Partnering with SCM tech providers ready to assist and support supply chain digitization goals is imperative. Narrow focus on tactical success will come at the expense of broader strategic planning and execution toward the goal of digitization and the powerful competitive advantage to be gained by succeeding in this endeavor.
Anthony Vitiello is Vice President of Sales & Marketing at UltraShipTMS. He enjoys a 25-year record of success marketing enterprise automation software platforms to some of the world’s largest companies. A published columnist and prolific blogger, Mr. Vitiello is responsible for generating and curating UltraShip’s Award-Winning Digital Supply Chain Collaborator blog and the company’s burgeoning library of thought leadership materials.