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Digitalisation of Supply Chains: How IoT, Big Data and Blockchain can Revolutionise Supply Chains

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Gary Noble 1st executive careers, 1st executive, recruitment...

As a system which enables the transfer of a huge variety of goods and services around the world, modern supply chains are vast ecosystems, with products often moving through multiple parties and regions. Naturally, this can lead to a number of inefficiencies. However, there are plenty of emerging technologies with the potential to disrupt this. Blockchain, the Internet of Things and Big Data could all address many of the significant problems with today’s supply chains. So, what should you know about the digitalisation of supply chains?

Digitalisation of Supply Chains: IOT

The growth of the Internet of Things, and general increase in the amount of interconnected ‘smart’ devices is a huge development in the digitalisation of supply chains, and will undoubtedly be used to improve efficiency. There are a number of applications of this already. For example, keeping tabs on assets. Tracking numbers and bar codes can now be replaced by RFID and GPS sensors that monitor products from floor to store. This allows companies to get a better grip on quality control, delivery times, and product forecasting. They can then optimise supply chains by using this data to tweak production schedules or identify sub-par vendor relationships. Interconnected fleets are another notable development in this area. Be it shipping containers, or delivery vans, all vehicles are set to be connected and co-ordinated. Technology such as drones and self-driving vehicles are all rapidly proliferating, with unmanned cargo ships, autonomous trucks, and self-learning stock-picking robots set to become commonplace. This has already happened with self-driving vehicles, which are fast becoming a regular fixture inside production plants.

Big data and analytics

Big data and analytics are set to play a pivotal role in the future of supply chains. Companies and customers will soon have the tools to collect, analyse and use data to previously unprecedented levels. Furthermore, the volume of data generated from different sources across the supply chain will only continue to expand as new digital technologies become more widely adopted. This will allow companies to use analytics to make a multitude of improvements to supply chains. Professionals will be able to make more informed, cost-effective decisions by using time and cost simulations, enabling them to prevent overstocking and understocking, achieve higher sales and increase customer satisfaction using demand sensing and forecasting techniques. However, as organisations integrate big data analytics into their operations, they will need to update their talent strategy, in order to truly leverage the digitalisation of supply chains.

Blockchain

Blockchain could potentially provide a vast amount of benefits to supply chains. It can give consumers a 100% verifiable way to prove the authenticity and history of products. As data in the blockchain is visible to all participants and cannot be altered, customers can rest assured that the data they are viewing has not been tampered with. In terms of corporate social responsibility, this could not only ensure more ethical and sustainable supply chains, but also boost company brands. Blockchain will also help streamline operational efficiency. Usually, products will pass through numerous parties, making it difficult to achieve end-to-end integration of data documentation. However, with blockchain, the confusion caused by these interactions would be replaced by transparent, multi-party access to data logs. Finally, it may also give us a viable way to eliminate paper from trade, with current applications of this including solutions to digitise and automate the bill of lading.  

No one size fits all solution

Ultimately, the potential benefits of the digitalisation of supply chains is huge. However, there will be many challenges to successfully implementing new technologies. For instance, making sure all parties are happy to share data will be a large hurdle, while privacy and cyber security aspects, such as data access permissions, will also need to be thought through at length. For any procurement professionals, however, the top priority should be ensuring you have the right talent in place to successfully integrate these technologies, and truly take advantage of what industry 4.0 can offer you.

Have you got the right people in place to handle future challenges? Take a look at how we’ve assisted organisations in building first class procurement and supply chain functions. Or, if you’re in need of a new challenge, visit our jobs page.