The interconnection of single computers and devices set the starting point for the World Wide Web, social media, big data and cloud computing, revolutionizing industries, markets and the way of collaboration, communication and information exchange around the world. Where the internet reduced costs due to automated and simplified processes, new forms of retailing, organizing work as well as digital ventures were created.
As a result of the digital economy, technology has infused our day-to-day life in form of innovative products and smart services. Improvements of soft- and hardware, such as sensors, computing or data transfer, enhance further the shift from the physical to the digital world. Although the impact of digitization is already known, logistics and supply chains just entering the age of unprecedented challenges and opportunities. Introducing our two-part series on the future of supply chain, we take a closer look on the technological advancements ahead of us.
Supply Chains and Digitalization
The digitization of physical supply chains received a lot of attention in recent years. Where the awareness for an integration has grown, many companies started to transform their organizational structures. To develop a transparent, collaborative, flexible and responsive network, it has been prerequisite to digitize the enterprise processes (Wehberg, 2014, pp.10). Seen as a source for competitive advantage, it has been also a goal to rely on data for both execution and decision support. However, the flow of goods, information, and finance are still considered as isolated streams across different functions and parties. The efforts, costs and the complexity of a holistic digital transformation have been often underestimated (Schrauf & Berttram 2017, pp.4).
A technology-driven Journey
Most supply chains originate from conventional SCOR¹ processes. According to the operations plan, source, make, deliver, and return, all relevant actors, such as suppliers, manufactures and distributors, are interconnected in a vertical and horizontal dimension (Corsten & Gössinger, 2008, pp. 148). Following this complexity and the necessary investments, mostly dyadic relations are established. Where only these processes have been digitized, the end-to-end supply chain still experiences inefficiencies in terms of limited views, delayed information and indifferent planning cycles. However, as the technical requirements in operations increase, it is strongly appreciated to reconsider the classical approach (Schrauf & Berttram 2017, pp.4). Illustrated in figure 1, several supply chain management trends have been identified and visualised according to their impact and core dynamics. Beside supply chain governance as well as business and social trends, it can be determined that the focus will be strongly on technological-based aspects (Wehberg, 2014, pp.10). Advancements in Information and Communication Technology (ITC) are moreover rapidly emerging. Innovative instruments and tools, such as advanced planning and execution, procurement 4.0, smart warehousing, autonomous B2C logistics, or supply chain analytics are on the rise and will soon impact the existing landscape again (Zhang & Dhaliwal, 2009, pp.4).
Figure 1: Trends in Supply Chain Management (based on Wehberg 2014)
In this uncertain, competitive and volatile environment, organizations must reconsider their existing business models through the identification and adoption of new technologies. BitCargo addresses the digital transformation due to rapidly changing technological innovations and customer behaviour. In the second part of our series, we take a closer look on the value of data and its operationalisation in data-driven business models.
- Corsten, H. & Gössinger, R. (2008). Einführung in das Supply Chain Management. 2. Aufl., München: Oldenbourg.
- Schrauf, S. & Bertram, P. (2017). Industry 4.0: How digitization makes the supply chain more efficient, agile, and customer-focused. PriceWaterhouseCoopers Strategy&.
- Wehberg, G.G. (2014). Logistik 4.0 Komplexität managen in Theorie und Praxis. 1st Edition, Springer Gabler.
- Zhang, C. & Dhaliwal, J (2009). An Investigation of Resource-Based and Institutional Theoretic Factors in Technology Adoption for Operations and Supply Chain Management,” International Journal of Production Economics, Volume 120, No. 1, pp. 252-269.