Digital Supply Chain: Definition, Benefits and Software

digital supply chain

In recent years, we have witnessed a profound evolution of the market, to which the Covid-19 pandemic has also contributed significantly.

To ensure business continuity, companies have approached an increasingly smart industrial model, digitising all processes – from the supply of raw materials to the distribution of the finished product – and implementing what is now called the digital supply chain.

But why are we talking about the digital supply chain and what are its advantages in the production context? Continue reading the article to learn more about the topic.

 digital supply chain infografica  

Whatis the Digital Supply Chain

The digital supply chain represents the digital evolution of the traditional supply chain through the implementation of advanced technologies, such as artificial intelligence, the Internet of Things, cloud computing and process automation.

In this way, a complete and integrated ecosystem is created, which allows you to closely monitor production activities, collect specific information and data on performance and communicate quickly with the different departments.

Adopting a digital supply chain therefore means creating a more efficient, flexible and transparent supply network, optimising production operations, reducing time-to-market and reducing associated costs.

The key factors of the Digital Supply Chain

The digital supply chain is distinguished from the analog supply chain by a number of factors, which are detailed below:

Data integration and advanced analytics

Through the digitization of processes, it is possible to collect, integrate and analyze large volumes of data in an agile way, providing detailed insights that can be decisive for the optimization of operations and the timely resolution of problems, such as interruptions, unforeseen events and delays.

Automation and robotization

Implementing a digital supply chain allows you to automate processes through specific software and robotize production plants, reducing processing times and considerably improving product quality. Thanks to these state-of-the-art technologies, human errors are limited, giving staff the opportunity to focus on higher value-added activities.

Real-time visibility and traceability

The ability to track and monitor in real time all processes related to warehouse management, production activities, logistics and product distribution greatly improves workflows, ensuring constant and meticulous control over the individual phases of the production process through an end-to-end approach.

The advantages of the Digital Supply Chain

As mentioned above, there are many advantages that the adoption of a digital supply chain can bring in the industrial context. Let’s analyze some of them:

Greater efficiency and cost reduction

Thanks to the digitalisation of their operations, companies can maximise production efficiency, optimising resources according to market demands and needs (just-in-time production). This translates into a significant reduction in costs and, above all, in production times, ensuring that the management of the order is completed by the deadline.

Faster response to market changes

End-to-end visibility and predictive data analytics allow companies to anticipate and respond more quickly to changes in the market, which is now more than ever characterized by extreme volatility and uncertainty. In this context, the supply chain must be able to be flexible, adapting to the circumstances and unforeseen events that may occur.

Sustainability and environmental impact

The integration of a digital supply chain in its own industrial reality can also be a strategic choice from an environmental point of view. In fact, the optimisation of resources makes it possible to limit inventories in the warehouse, reducing waste and the impact that activities of this type can generate on the environment.

The challenges in implementing the Digital Supply Chain

Although the implementation of the digital supply chain has numerous advantages from a production point of view, it should be noted that it is still a complex transformation process, from which several challenges arise:

Initial investment and costs

The transition to a digital supply chain requires considerable upfront investment in technologies, staff training, and process reorganization. For this reason, companies need to carefully evaluate the costs and benefits of such an investment, planning a phased implementation that minimizes financial risks.

Integration with existing systems

To function properly, the digital supply chain must integrate with existing systems, which often appear outdated or inadequate compared to recent digital technologies. In these cases, it is necessary to carefully evaluate the possibility of updating or replacing current systems, focusing on more innovative and high-performance solutions.

Training and cultural change

Introducing new tools and technologies in an already established and consolidated company can be complex, especially from an organisational point of view. In order for this transition to be successful, it is necessary to involve staff immediately, providing them with an adequate training process, which allows them to acquire the skills they need.

Software for the Digital Supply Chain

Digital supply chain activities can be supported by various software solutions, including:

Inventory Management Systems

Inventory Management Systems allow companies to monitor the flow of goods and materials within the warehouse, in order to optimise inventory, reduce storage costs and minimise the risk of product surpluses or shortages.

However, it should be noted that these software are limited exclusively to inventory management and do not consider complex factors, such as any production constraints, set-up times and resource capacity.

Enterprise Resource Planning (ERP) systems

Enterprise Resource Planning (ERP) systems are created to support companies in the management and integration of various internal functions, including finance, accounting, human resources, production, purchasing, inventory and so on, facilitating information sharing, planning and process control.

Despite including modules for production, these tools do not offer specific features for the management and optimization of production processes in the digital field, sometimes requiring the integration of external software.

Advanced Planning and Programming Systems (APS)

Designed to streamline digital supply chain processes, advanced planning and scheduling (APS) systems leverage complex algorithms, real-time data, and modeling techniques to help companies make more informed decisions about production planning, asset management, task scheduling, and product delivery.

Thanks to the implementation of an APS software, it is possible to maximize operational efficiency, distributing resources strategically, reducing delivery times, improving customer satisfaction and their competitiveness in the market.

Among all the different APS solutions currently on the market, we recommend CyberPlan, an all-in-one, dynamic and flexible software that allows you to anticipate market challenges, planning and scheduling production activities in a more agile way.

CyberPlan integrates seamlessly with leading ERP systems, ensuring unprecedented management and monitoring of business operations.

The ability to respond quickly to changes in demand, reduce production costs and speed up delivery times are just some of the advantages that make CyberPlan a fundamental pillar in the digital supply chain of any industry 4.0.

Would you like to stand out and increase your competitiveness in the global market?

Book a free consultation with our experts. They will explain all the advantages, features and potential of CyberPlan, answering your questions and clarifying all your doubts.

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