15 Steps to Build a Digital Supply Chain

In our everyday lives, we take notes on our phones but set goals on a board. We shift between physical media and computers for every other task. We do so because it makes our work faster and better, and our lives easier. A digital supply chain helps a company in the same way.

A digital supply chain integrates modern tech tools into the basic supply chain. This allows for an efficient and transparent ecosystem in Supply Chain Management (SCM). These two together form a hybrid supply chain to reach maximum output.

Keeping a digital supply chain twin has many benefits. It can –

1) Help each member in the process to work together in sync and access data on one common platform.

2) Automate tasks to save time and reduce errors.

3) Track the movement of goods in real-time through the entire chain.

4) Make use of AI and ML along with data to predict failure and provide insights.

5) Help make faster and more accurate decisions.

6) Integrate each step of the process with another to create a network. It links every path from the start to the end to give an overview of the entire supply chain with ease.

A supply chain is diverse and involves many different processes. Each step has its own needs. Thus, to build an ecosystem requires care and caution. It is an ongoing process, and your digital supply chain will evolve with time. The core challenge is to set it up.

A step-by-step process can help ease the burden and allow your hybrid chain to be up and running as soon as possible. Here are 15 steps to build your own digital supply chain –

1. Review Current Maturity

Before taking on a new venture, know where the supply chain stands. The key to a successful digital model is to be aware of the needs of the company. You can then use this knowledge to shape and build an effective model.

To assess and review current maturity -

1) Study the four stages of the maturity model of a supply chain.

2) Identify the stage that your supply chain stands on.

3) Analyse the areas of improvement to take the model to the next step.

The weak segments will provide you the right strategy, goals, and vision for your upcoming digital supply chain.

2. Clarify the Vision and Role

The business runs on a mission statement and sets clear goals and objectives to attain it. The purpose of the digital supply chain would be to attain a set goal.

Clarifying the vision will set the mark for the action. To help gain more insight, ask –

1) How does a digital twin help the company in its current vision?

2) What purpose do I want the digital supply chain to fulfil now?

3) What do I expect from this model in the near future?

Having a clear knowledge of the role you want your digital twin to play will help in setting up the right one for you. You can do so by writing down a specific and direct goal for the digital model.

You can expand or remodel your digital twin as the company grows or as the needs change. Thus, aim to focus on the current needs and wants of the business.

3. Assess Current Systems

Unless you live under a rock, your company must already use some digital tools and systems. This move is simply a transit to one integrated system in the workflow.

To model a digital replica of your supply chain, you need to understand –

1) The current workflow of the team and the process.

2) The list of current tools and systems used.

3) The problems faced when using the current set of digital tools.

4) The capabilities of your workforce to adapt to a new system.

Assessing your current state will ensure a smooth transit. Some of these tools could also be a part of your digital ecosystem and save money. But most importantly, it will show you the loopholes or challenges you might face after setting up the model.

You can use this assessment to bridge gaps among workers and tools. Training your teams while you model the system can help tackle any problems that may arise.

4. Trace the Path

When planning your digital supply chain for the first time, you can start in either of the two ways -

1) Create an end-to-end digital supply chain.

2) Start with one segment and expand it one by one.

To know the best route for your company, you will need to map out the entire supply chain process. A visual diagram can present all information in a concise manner for better clarity.

The best way to trace the process is to involve the teams of each section. The people involved in the process are most aware of the nuances and can help give a more accurate picture of the same.

This will aid in identifying key problems and drive your key focus. The map will guide you to create your digital twin without errors. Further, the map should aim to understand the factors that affect each stage and its execution. This ensures that the shift does not give rise to a new set of problems.

5. Find Data Sources

Supply chains and their decision-making runs on data. The same also applies to your digital twin.

The data fed into the model can come from a number of sources, such as –

1) Internet of Things (IoT): which makes use of sensors to track data.

2) Open Data: refers to public data such as Google Trends.

3) Purchased Data: involves buying data from syndicated sources.

4) Web Data: collects data from direct-to-consumer websites.

Each step of the supply chain requires a different kind of data and insight. This is why most supply chains make use of ‘Big Data’. Big data refers to the vast storehouse of data used to establish trends and insights. This data can be of any type, or a mix, based on the company’s needs.

The data fed into your model is the base of your digital supply chain. Thus, being aware of its sources and owners ensures that you get accurate and credible data. You should put deep research into your sources before merging them with the system.

6. Pick a Hosting Solution

You can find a wide variety of technologies and systems in the market for supply chains today. With so many options, choosing the right one can be quite a task.

There are many factors to look into when picking a hosting solution. Check whether it –

1) Seamlessly integrates and connects with all your tools and data sources.

2) Offers cloud services that are flexible and can expand.

3) Has a strong security system for your digital data.

4) Provide a simple and easy-to-use user interface with all the services that you need.

Make sure you keep the company’s visions in mind. One software may be great for a large company, while another for a small or medium one. Making a list of priorities and needs with a budget can help keep track and narrow down your choices.

7. Create a Model

Once you gather all resources, it is time to construct the system. If you follow the plan, this step should be fairly easy to implement. But it will still require some amount of effort.

Building a clear diagram of your digital supply chain model can ease the process. The model of your digital supply chain should –

1) Include all components of plan, make and deliver.

2) Show the major resource management areas.

3) Display the tools and systems used in the supply chain.

4) Sketch out the links between different tools and systems.

When building the IT or architecture, you may want to consult an expert, if possible. An expert will help you decide what is tangible and best for the company.

8. Align the Model

Other than technical needs, your model also needs to cater to the set visions and goals. Aligning the model makes it much more likely to succeed in the task.

After the architecture of the digital supply chain is ready,

1) Make a list of priorities.

2) Analyse the value of each step.

3) Identify the tools and systems that cater to top priorities.

This also relates to the data provided by the model. Aligning the model to provide insights that focus on the set goals and visions will help create the right strategies in the long run.

Make the final edits to the main structure of the model. Once your model is ready, you can start setting it up for use.

9. Connect the Data

Data being the base of SCM is the first need of your digital model as well. Since you have already recognised and chosen your sources, this step is also simple. Just connect your data to the hosting service.

The most important part is the use of real-time data. Connecting to real-time data allows you to –

1) Find errors in the process.

2) Predict potential failures.

3) Align to goals and objectives as they change with time.

Make sure you have your IoTs, APIs, and Analytics well set up in the supply chain. Link them to your digital twin and get accurate insights. Using real-time data will keep your supply chain management fresh and effective through time.

10. Optimise the System

The digital twin provides analytics based on data input. To get the insights that link to your goals, you must optimise both - the data and the system.

A digital supply chain will make use of machine learning and other modern tools to optimise data. Your system should –

1) Focus on end-to-end visibility of the supply chain.

2) Standardise processes that can save time and money.

3) Be responsive with an ability to adapt.

Keep track of goods and cash flow in real-time.

Further, you should aim to build a collaborative and transparent workspace. To allow easy access to data, adjust key input variables to data. Link all your data and functions under one common system.

The base framework of your digital supply chain is now ready!

11. Analyse and Test

A failure in the model can be very costly. Thus, analysis and tests become a vital step. Make use of ML and AI to gain insights to generate results. You can then use these results to further build upon your current model.

To assess the status of your model –

1) Lay out the strategies and plans of your model.

2) Study the output of each tool.

3) Test if multiple people can access the system with ease.

4) Ensure that the UI is easy-to-use across different teams and vendors.

5) Check if the real-time data is well set up and gives out accurate info.

Tests will guide your path to improve the system to its max ability. It is the final step to prepare your model for the real deal. You can also look for alternate options for the tools or methods that give rise to problems. However, it is not a one-time process.

You need to assess and remodel the digital twin many times. Supply chain managers use a variety of strategies for the same. A common approach is the Kaizen method. It will help study and improve your system not just at this stage, but time and again.

12. Measure its Success

Using KPIs is the best way to know how effective your model is. You can measure the success of your model by using a metric called RTM. The metric can provide practical and direct insight into the actual performance of the system.

After taking a measure of the RTM –

1) List down reasons for your current value.

2) Check if any key areas need focus and improvement.

3) Simulate other possible approaches that can improve your RTM.

You may also want to consult an expert to build a specific strategy. Many software and tools in the market can also help measure the success of an SCM strategy. You can choose these tools based on your budget and current systems.

13. Allow Room to Expand

A heavy part of building a digital supply chain has been to remodel it. This is because digital supply chains need to adapt to a purpose and a vision. This purpose often changes as time passes. At the same time, the company and its supply chain are also bound to grow.

To be able to cater to the dynamic needs of the supply chain industry, the system needs to adapt and expand. To make sure your digital twin is adaptable –

1) Check for any limiting tools or tech that you may be using.

2) See if your system can integrate various tools, even if you do not need them right now.

3) Extend and connect to third-party apps.

Opening up to other organizations will allow your model to scale beyond borders. Keeping a note of every detail makes it easier to evolve the system over time.

14. Enhance Visibility

To make the best of it, a digital supply chain should be transparent. Every person involved should gain end-to-end visibility of the process. Supply chain visibility, or SCV, can be enhanced by –

1) Investing in a higher quality of tech products.

2) Live tracking goods by using smart sensors.

3) Using real-time data, chats and updates.

4) Measuring the current state via KPIs.

5) Extending the system to vendors.

The aim is often to increase SCV for every role and process. Anyone can then simply use the SKU number to fish out the details of a good. Hence, it saves time and cuts down on risks.

15. Automate Processes

One of the best features of a Digital Supply Chain is its ability to automate tasks. It will take over the burden of routine tasks on human labour. It can make large volumes of tasks fast and easy with the right strategy.

Your digital model can automate –

1) Storing, reading, and sending documents.

2) Micro transportation with trucks and drones.

3) Tracking demand and supply of goods.

4) Keeping note of inventory stocks and lack thereof.

5) Automating dock scheduling using a warehouse dock appointment scheduling software like Queueme.

Automating tasks is a great way to save time and money. However, it can go wrong if not used in the right way. You should avoid using automation for complex tasks and strategies. Instead, collaborate with teams and tech together to get the best results.

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