The digital supply chain. Digitization. Digital transformation. Supply chain 4.0. All of these phrases were considered buzzwords just a short couple of years ago. As the concept of “going digital” was introduced, many industry experts theorized about how digital technology could be applied to benefit the supply chain, but with implementation and adoption lacking, these terms were merely words.
Fast forward to 2017: These phrases now represent real, tangible strategies for businesses today. Retailers are implementing technologies that can talk to each other and connect the various points of the supply chain to make everything more accurate, efficient, connected and intelligent. Predictive analytics, machine learning, virtual reality and artificial intelligence have come on the scene, giving teams unprecedented insights and capabilities they can use for forecast accuracy, perfect order, on-shelf availability and more.
Winning at retail requires a digital strategy
It’s taken longer for the retail industry to fully adopt digital and new ways of doing things. Although the retail industry isn’t yet fully digital, the progress we’ve made is a big step up from where we came from. What we now call the “traditional” supply chain was siloed, discrete and comprised of many different steps to get a product from ideation into the hands of the consumer. The linear approach brought many blind spots with it – if a product wasn’t selling, we wouldn’t know until excess inventory clogged warehouses, and at that point it was too late to fix. If there was a labor strike in China that caused a disruption in shipments, the whole rest of the supply chain was impacted and we were doomed to disappoint consumers with delayed deliveries.
With digital supply chain strategies, companies leverage technology – mobile, social, sensors, analytics, cloud – to get instant information and real-time visibility that can break down these walls and create collaborative and advanced supply chain networks. The benefits work both up and downstream: Teams can immediately alert suppliers of a ramp in production when hotter ticket items sell out, or instantly send more product to warehouses to avoid low inventory. The result is a smarter, more effective and scalable supply chain that enables a competitive advantage for the business.
There’s a long road ahead before the industry gets to the point where these digital technologies are completely developed as they are in other industries and we’re fully using the tools we have at our disposal, but the point is this: Each leg of the supply chain needs to work together – not independently – for retailers to have a shot at winning the retail game today. Without a collaborative, social and digital approach, they can expect to be sitting on the sidelines.
Read how digital supply chains also offer transparency that retailers can use to increase efficiencies.