8 min read
26 Jul 2023
8 min read
26 Jul 2023
Supply chains are trending in the direction of complexity. They’re becoming increasingly global and are constantly evolving to match consumers’ growing expectations regarding choice, customization, and speed of delivery.
While this shift has brought many benefits for companies, including the globalization of consumer demand, the increasing complexity of supply chains has also exposed new vulnerabilities. Managing complex supply chains is simply more difficult, and risks like unexpected delays or challenges meeting sudden surges in demand are important to overcome.
Accordingly, streamlining the supply chain management process and increasing supply chain visibility have become critical steps in achieving supply chain efficiency. This has led directly to the development of a new wave of supply chain technologies.
The following six supply chain technologies have the potential to be particularly effective in helping companies manage their supply chains more efficiently and effectively:
Automation is a generic term that refers to the use of various technologies to automate mundane or repetitive tasks. It allows companies to minimize or replace the need for human input in diverse processes, reducing costs and increasing efficiency. And it’s increasingly applicable throughout the supply chain.
In factories, industrial robots can work around the clock to perform repetitive tasks with high precision and speed, which enables companies to streamline operations and increase productivity.
Where software is concerned, plenty of platforms exist to help companies streamline time-consuming processes. Accounts payable automation software, for example, can be used to improve the management of invoicing and payment processing while reducing errors and processing costs.
Artificial intelligence (AI) is the branch of computer science designed to enable sophisticated real-world problem-solving. Rather than being programmed explicitly for every task, AI systems use machine learning to digest large amounts of data, which they can synthesize to respond to diverse queries.
By deploying AI systems that have been trained on vast amounts of data, companies can get unprecedented insights into the inefficiencies in their approach to both supply chain management and working capital management. And these insights are practically entirely automatic, which drives efficiency.
Seen by many as the cornerstone of Industry 4.0 – or the fourth industrial revolution – the Internet of Things (IoT) refers to the integration of digital connectivity in diverse objects. This is transforming manufacturing, inventory, logistics, retail, and more, impacting the entire supply chain.
IoT devices are fitted with sensors connected to the Internet, which can feed data to remote automated systems for processing and analysis. They enable businesses to monitor the condition of equipment, identify inefficiencies in processes, and improve reliability.
IoT tech applied in the supply chain allows companies to track inventory, gather data, and access detailed insights that can drive new supply chain initiatives. This, in turn, can help them improve operations, reduce costs, increase revenue, and identify other opportunities for supply chain optimization.
A blockchain is a distributed ledger of transactions upheld by multiple decentralized entities. The information stored is an accurate and complete record of transactions that cannot be deleted and is represented identically in each node across the blockchain.
Since blockchain represents a way of recording digital interactions in a transparent, secure, and auditable manner, it can ensure the traceability and reliability of information between different stakeholders in the supply chain.
Combining IoT with blockchain creates the means to store, authenticate and share data from connected devices on cryptographically secure digital ledgers that reliably prevent information from being corrupted or falsified.
By using this type of technology in supply chain processes, companies can reduce administrative costs and paperwork, increase traceability and improve visibility over production.
In recent years, cash and physical payment methods have given way to digital or electronic payments that offer greater visibility and lower processing costs. Digital payment channels are more environmentally friendly and provide a range of benefits, including greater security and access controls.
Virtual cards are an attractive option for businesses with high-volume, low-value transaction flows as they come with secure payment controls and provide rich remittance detail. Meanwhile, solutions such as supply chain finance (SCF) and dynamic discounting (DD) (which are easiest to apply through digital payment channels) can offer businesses access to avenues of working capital optimization.
As well as facilitating payments to suppliers and being used to offer lines of credit, digital payment channels can also be harnessed to incentivize supplier performance – for example, sustainable supply chain finance can offer preferential rates to suppliers that improve their ESG performance.
Last but not least, supply chain management (SCM) software can play a key role in helping manage a company’s supply chain processes by offering real-time visibility, detailed data, and insights into changing customer demand.
While no longer emerging, supply chain management technology continues to become more sophisticated. It typically integrates modules for inventory management, supply chain financing, accounts receivable management, and more.
Using up-to-date technology, supply chain management software can link all processes in the supply chain, from creating services and products to order fulfillment. As such, it enables visibility and tracking across suppliers, manufacturers, logistics, wholesalers, and retailers across the globe, while enabling businesses to respond to changes swiftly and efficiently.
Furthermore, a company can use SCM software to share information across the entire organization, leading to greater visibility and analytics. By moving from a reactive supply chain to a data-driven one, businesses can reduce costs, strengthen cash flows, drive ESG improvements, optimize working capital, and make their supply chains more resilient.
Supply chain initiatives can help businesses mitigate threatening ESG risks and improve their ESG performance in the meantime. Here’s how.
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