Digital Supply Chain Management
Supply chain management digital transformation
Technology has crept into all aspects of business in our modern world. It altered the way we conduct business, how we handle interactions with partners, and how quickly we can access information. Now, as organizations look to the strengths and structure of their supply chain, the need for digital tools to manage and optimize your supply chain is becoming increasingly apparent.
In the following guide, we break down the strategy behind digital supply chain management and touch on the benefits of implementing these practices into your business.
What is digital supply chain management?
Let’s face it. The world is more connected than ever before, and global relationships have become complex and difficult to manage. These relationships require upkeep and transparency in order to be successful, but as global trade expands, managing your supply chain can quickly become time-consuming.
What’s more, is that global supply chains are privy to disruption. Changes in processes, compliance laws, and the state of global trade all impact a business’s ability to secure cash flow and fulfill orders. But, the good news is that as business operations grow and modernize, more and more digital tools to help support your supply chain are popping up. Organizations are gearing up to digitize their business processes, and it all starts with digital supply chain management.
Put simply, digital supply chain management is comprised of the electronic technologies and tools organizations use to support their supply chain from end to end. Automation capabilities and digital tools enable organizations to reduce their use of paper, eliminate manual processes, and reduce the need for information requests since all vendor and buyer data is hosted in one location. The objective of digital supply chain management is to holistically manage your orders, invoices, and supplier and buyer relationships, all on a digital platform that is easy to access for all involved parties. With enhanced insights and data, digital supply chain management platforms offer a depth of information on performance, requirements, and overall supply chain dynamics that leaders can use to make informed decisions.
What are the elements of the digital supply chain management process?
Digital supply chain management is a process that involves multiple steps. As an end-to-end supply chain strategy, digital supply chain management begins in the planning stage and continues all the way through relationship management after order fulfillment. At every stage of the cycle, organizations need to utilize digital tools that support the processing of information and facilitate open communication. Without access to transparent data regarding orders and transactions, organizations open their supply chains up to potential roadblocks.
Below we break down the various stages of the digital supply chain management cycle:
- Plan — The planning stage of digital supply chain management is just that: planning out your processes and inventory before advancing to order management. This stage is imperative for control over your business’s inventory and manufacturing processes. This stage will look different for companies based on their industry and the tools they use. For example, some firms rely heavily on technology and tools to help them map out their materials and order planning. Planning ahead helps your company ensure they are prepared with materials, tools, and human capital to fulfill future orders.
- Source — In the sourcing stage, organizations work to identify vendors and suppliers for goods and services necessary for order completion. Your business needs to have suppliers that can provide you with the tools and materials you need to actually meet the demands of your customers. Luckily, with the support of supply chain networks like the Tradeshift Network, organizations can get access to information about hundreds of qualified suppliers, and can easily add and adjust supplier information as needed.
- Make — This step is fairly self-explanatory. At this stage in the cycle, your team and digital tools should be focused on performing the necessary steps and operations to manufacture the product from raw materials.
- Deliver — The delivery stage involves more direct interaction and engagement with your customer. After making the product or service, organizations need to have a process in place to help deliver the order to the customer. Digital supply chain management tools help to make this stage more efficient by granting both parties access to the necessary information and by facilitating a space for open and honest communication. Your best bet to a happy customer is to not only fulfill your order promise but to create a buying experience that is enjoyable and free from miscommunication.
- Return — The return stage is part of the digital supply chain management process that involves relationship management. The relationship you have with your suppliers can have direct benefits on the efficiency and productivity of your supply chain. You want to ensure that your buyers see value from your relationship and have an enjoyable experience working with you. In this stage, supply chain managers need to plan out processes for returning or replacing defective products, what steps will be taken if a process is not fulfilled correctly, or any other potential roadblocks you may encounter.
Challenges of implementing digital supply chain management
As with any new tool or process, organizations might face some hurdles to implementation or objections from their team. While these barriers may create a challenge initially, they are easily outweighed by the benefits of an integrated digital supply chain management system. Below are the most common issues organizations face when considering utilizing a digital supply chain management platform:
Low acceptance initially — Getting employees and executive leadership on board can be a tricky task. What can be even trickier is getting your team excited about training for a new platform or tool. Employees and suppliers have an aversion to change, and it will take some effort to overcome their initial objections. While some people will initially be unwilling to turn over control of their supply chain to digital tools, you can take comfort in knowing this is a common hurdle many organizations face. With time and gentle nudging, your team and suppliers will see the benefit of implementing a digital supply chain management strategy.
Lack of cooperation — Often, performance is measured for departments based on isolated factors like order completion, units produced, on-time delivery, or cost per piece. What this means is that performance metrics often create siloed departments that are focused on hitting their personal benchmarks. This silo-based procurement, inventory, and maintenance process create internal conflicts within an organization.
Luckily, these challenges can be overcome when organizations commit to implementing digital supply chain management tools. By offering support and training to your team and suppliers, you can create a resilient and efficient integration.
Advantages of digital supply chain management
As business operations expand globally and organizations embrace and implement digital tools in their existing processes, digital supply chain management strategies become even more necessary. While some businesses might be hesitant to transition to a fully digital supply chain platform, the benefits of digitization far outweigh any potential costs. Digital supply chain management provides many helpful benefits for organizations such as:
Enhanced collaboration — When organizations embrace the support of digital tools, their supply chain benefits from enhanced collaboration. With more and more businesses being conducted in a digital format, businesses need to find solutions that support the move towards digitization. Alongside heightened collaboration, digital supply chain management also reduces the likelihood of departments undergoing a “data silo effect”. By sharing transaction information among internal and external teams, digital supply chain management helps to create a unified, shared view of the entire supply chain process through one singular portal.
Automation capabilities — Automation is the key to an effective supply chain in our modern age. By reducing the amount of manual input that is needed, digital supply chain management tools and strategies create an end-to-end digital platform built around efficiency. Supply chain professionals can automate tedious tasks, saving themselves time and energy while also reducing the likelihood of manual errors. Other benefits that organizations might see when implementing digital supply chain management strategies are improved data accuracy and increased supply chain speed.
Better data analytics — Without access to clear and timely data, your supply chain and business relationships will suffer. Organizations need clear information in an easily accessible location in order to plan ahead and make informed decisions. Today’s analytics and data are more useful than you might know. Nowadays, digital supply chain management tools have features that can spot problem patterns, identify bottlenecks and pinpoint savings and cost-reduction opportunities, watch for imminent and future risks and recommend proactive solutions, and enable real-time transactional reporting. What does this mean? It means you and your partners will have access to real-time data that facilitates stronger relationships, enables better decision making, and allows for proactive planning.
Supply chain management digital transformation
Digitization in the supply chain was always a growing trend, but the impacts of the pandemic on global trade expedited that process significantly. The need for a digital trade platform became crucial as cash flows halted and businesses moved to a remote format. Aside from providing a space for digital trade, businesses are keen to jump on the trends towards digitization for a few reasons:
- Digitization enhances your visibility into your supply chain — with greater visibility into data and transaction records, digitization creates a more complete supply chain built around adding value to your relationships and operations.
- Digitization offers access to real-time information — organizations need accurate and updated information in order to make informed decisions and adapt quickly. Digitization helps you become more proactive in your inventory and order management, giving you more control over the process.
- Digitization breeds efficiency — in order to efficiently and effectively address key issues, businesses need to have 70-90% visibility into their operations. The only way to achieve this is through digitization. With the support of a digital platform, you can speed up your order process and delivery times, making your suppliers and customers more satisfied.
As more businesses jump on the digitization bandwagon, the need for supportive and robust tools grows as well. Luckily, Tradeshift is there to help support you along the way.
How Tradeshift can help
Tradeshift is a one-stop-shop for people looking to transform their supply chain process. Our digital platform helps to solve the needs of your specific organization while connecting you with vetted and qualified suppliers and customers. People who use our Tradeshift Network enjoy access to:
Enhanced communication and connections — Tradeshift is the single technological solution you need for your global supply chain, our Tradeshift solutions consolidate your processes, orders, invoices, and conversations all on our robust platform. Users enjoy having all their information and data in one location, where all involved parties can easily access data, update information, and track order progress. Tradeshift builds transparency into your supply chain, creating a resilient process that is prepared for potential future disruptions.
Advanced technological solutions — As a best-in-class software solution for your supply chain and workforce needs, our AI on the Tradeshift platform can take over your time-consuming and tedious tasks, leaving your team more time and energy to devote to relationship management and strategic thinking. The best part? Our platform allows you to determine the level of involvement AI solutions play in your processes, giving you full control over the experience.
Tradeshift is built for adaptability — Our technological solutions are built to adapt with your supply chain as you scale your operations. This means that Tradeshift is built to work around your needs, solving your supply chain troubles as your company grows. And, with our marketplace network of vetted suppliers and buyers, you can easily find the supplies and connections you need to manage orders and invoices as your company adjusts.
Get paid quicker — At Tradeshift, we know how important it is for you to secure cash flow and payments in a timely manner. Tradeshift Cash provides faster financing on qualified invoices, and with our 24/7 availability, you can get instant updates on transactions and invoices at any given time. Users can implement Tradeshift’s solutions to supplement their and existing early payment solutions, or they can use our service in place of their existing solutions. The most important part: we help you keep cash flowing so you can keep operations running.
See us in action:
Over the years, we’ve helped organizations from numerous industries to better their supply chain strategies and secure their digital data. See how our technologies have been used to help create an efficient and effective vaccination distribution system in Belgium:
Tradeshift in action: using digital technologies to knit together Belgium’s COVID vaccine supply chain
Tradeshift can help you transform your manual processes and supply chain into an integrated, efficient digital supply chain network.
For more information about how our suite of software solutions can help you to shift your business into a digital platform, reach out to our team of experts and see Tradeshift in action today.