Using high-tech solutions is becoming necessary for business supply chains because they enable firms to function more effectively and efficiently. It helps organizations make better decisions, lower costs, and increase performance in logistics, customer service, inventory management, and supplier collaboration.
Visibility and transparency are the major advantages of technology in supply chains. With tracking tools, businesses can keep an eye on their cargoes as well as supplies, allowing them to identify stoppages or other inefficiencies promptly.
This blog examines how technology has progressed in supply chain management, leading to its transformation throughout this sector.
Understanding the Importance of Technology in Supply Chain Network
The role of technology in supply chain network optimization cannot be overstated. Utilizing technology in the supply chain network enables operations to be more streamlined and enhanced. With advanced technology, businesses can collect and analyze large amounts of data to improve their processes, increase efficiency, and make plans.
The role of cutting-edge technologies in supply chain networks is constantly evolving. Reports show that 60% of organizations worldwide anticipate that robotic process automation will have a significant or moderate impact on their supply chains by 2025.
As technology advances, we can expect a global shift towards digitizing the entire supply chain, with AI solutions and robotics working together to drive continuous improvements.
How Supply Chain Management Can Benefit From Technology?
Installing advanced supply chain management technology boosts operational efficiency and revenue growth. Here’s how –
- Improves Operational Efficiency – In today’s competitive landscape, just having the basics isn’t enough. Technologies such as machine learning will offer you a comprehensive understanding of your supply chain operations, making you learn about the efficiency and effectiveness of these systems.
- Enhances Access to Information – Technology connects previously isolated data points, solving the problem of disconnected information across different sections of the supply chain. With new tech, all participants in the supply chain can access up-to-date information about orders, inventory, transportation, workforce, and warehouses.
- Boosts Collaboration – Modern supply chain systems facilitate and monitor collaboration among individuals, departments, and organizations. This seamless flow of information and decisions often results in improved financial performance.
- Increases Agility – With advanced technology, companies gain better insights and faster access to information, making it easier for executives to address issues or seize new opportunities quickly.
- Improves Decision-Making – Technology provides precise, real-time data, enabling managers to make informed decisions and identify potential problems early. This immediate access to accurate information enhances overall decision-making.
Problems in the Current Supply Chain Technology
1) Material and Labor Shortages
In 2020-21, layoffs and quarantine disrupted the global market, leaving leaders struggling with delegation and filling key roles in procurement and supply chain operations. The Institute of Supply Chain Management reports that crucial resources, both human and material, are now scarce and costly, causing significant industry challenges. This shortage underscores the need for next-gen technology to streamline and enhance supply chain management.
2) Increasing Freight Costs
In 2021, intermodal transport saw significant growth, with spot prices doubling, reefer rates increased by 25%, van by 18%, and flatbed by 27%. Air and sea freight costs also surged, making high-capacity freight movement difficult for companies. This prompted businesses to invest in advanced logistics and supply chain technology to discover more cost-effective solutions.
3) Port Congestion
Over the past two years, global ports have faced significant delays, with over 50 container ships waiting off Los Angeles and Long Beach in October 2021. These bottlenecks, especially at overseas ports, disrupt domestic supply chains by adding time to import-export operations. While port congestion isn’t new, the National Customs Brokers & Forwarders Association of America (NCBFAA) expects ongoing delays in 2022, leading to increased reliance on technology in supply chain management.
4) Limitations in Demand Forecasting
In 2020, the global shutdown disrupted supplier network data, and in 2021, rapid digital adoption left supply chain leaders without benchmarks. This opened the door for global supply chain technology adoption. With demand still surging, leaders use current data to predict trends and set benchmarks for inventory, pricing, and budgets. As the supply chain industry faces ongoing challenges post-COVID, the solution lies in embracing new technologies to drive innovation and efficiency in operations.
What are the New Technologies Impacting Supply Chain Networks?
1) Internet of Things (IoT)
Manufacturers and transportation companies invest more in IoT development services to enhance manufacturing operations and manage production assets and freight fleets.
IoT enables real-time location tracking, monitoring weather conditions, and analyzing traffic patterns, which are crucial for optimizing supply chain management.
By combining IoT with artificial intelligence, businesses look to create more efficient, responsive, and intelligent supply chains, addressing a wide range of operational challenges and improving overall performance.
2) Blockchain Technology
Blockchain technology is revolutionizing supply chain management by providing a secure and transparent way to track the origin of goods and ensure trust in the entire process. With its immutable ledger, blockchain offers a more efficient audit trail than traditional methods like email or bookkeeping. This enhances transparency, reduces errors, and boosts efficiency, making blockchain one of the most valuable investments for managing global supply chain disruptions.
3) Artificial Intelligence (AI)
Modern supply chains generate vast amounts of data, providing key insights into global operations. By integrating technologies like AI and machine learning, companies can automate warehouses, improve delivery times, manage inventory more effectively, and optimize sourcing relationships.
Predictive analytics further enhances these processes, helping businesses create better customer experiences, boost satisfaction, and increase sales. This combination of advanced technology in supply chain management is crucial for staying competitive and meeting the growing demands of the market.
4) Robots and Automation
Advanced technology is revolutionizing supply chain management by automating tasks like material movement in warehouses and order fulfillment. With AI’s growing role, machines now handle many manual tasks, from picking and packing orders to managing entire supply chain processes.
This collaboration between humans and robots drives the widespread adoption of automated supply chain solutions, enhancing efficiency and productivity across the industry.
AI-powered cloud technology revolutionizes supply chain operations by turning massive data into actionable insights. By integrating cloud app development with AI, businesses can enhance supplier selection, automate processes, analyze carrier performance, access real-time shipment data, identify operational trends, and improve customer support.
This powerful combination of cloud and AI is key to optimizing supply chain efficiency and effectiveness, driving better decision-making and overall performance.
Final Thoughts
Technology’s function in improving supply chain networks has been revolutionary, presenting better visibility, efficiency, and decision-making competencies. Nonetheless, material scarcities continue, costs soar, and infrastructure remains a limitation.
Newly discovered technologies such as IoT, blockchain, AI, and robotics are changing everything, bringing intelligent and robust supply chains. As they advance further on their journeys as they have done before, with no doubt about it, these systems will assume an even more pivotal part when it comes to shaping the future of supply chain management.
As the editor of the blog, She curate insightful content that sparks curiosity and fosters learning. With a passion for storytelling and a keen eye for detail, she strive to bring diverse perspectives and engaging narratives to readers, ensuring every piece informs, inspires, and enriches.
