Supply Chain Management

4 Options On How To Address Digitization in Supply Chain Management

Learn which options for digitizing your supply chain are available if you are a small to medium enterprise.

From Smooth Operations to Crisis Mode

Supply chain managers are typically occupied with running all aspects of the supply chain. Internal alignment takes place during regular S&OP planning sessions. After that, everyone goes their separate ways until something happens in the supply chain. These disruptions lead to numerous phone calls and emails, not only with partners in the external supply chain but also with internal stakeholders.

All of a sudden, the supply chain manager becomes a crisis manager. She not only deals with external supply chain partners but also answers inquiries from production, sales, procurement, and the warehouse:

  • When can we expect deliveries?
  • What should I tell the customer?
  • Where are our shipments right now?
  • Do we need to look for a substitute supplier?

From here onwards, information exchange is done via emails and spreadsheets, which adds to the chaos as:

  • Information may get lost.
  • Updates of spreadsheets may get overlooked.
  • Manual updates are prone to errors.
  • Information may be accidentally deleted.

This is a recipe for disaster and increases the frustration of everyone involved. Additionally, ad-hoc crisis management prevents achieving strategic objectives as they are deprioritized, and the crisis dominates. Further, the customer experience suffers as reliable updates become hard to provide.

From E-Mails and Spreadsheets To A Digital Platform

In 2022, we conducted over 100 interviews and conversations with supply chain and procurement professionals. The vast majority of companies we spoke with confirmed the existence of problems in their supply chain, and many recognized the lack of digitization as a key issue. The most common pain points in supply chain management were identified as follows:

  • Too many manual updates via email and spreadsheets
  • Lack of visibility into the supply chain, particularly regarding shipments and statuses
  • Frustrated employees who are forced to work manually with outdated tools

Furthermore, management is under pressure as these pain points can have a real economic impact on the P&L, including:

  • Additional costs due to demurrage, detention, or express shipments
  • Revenue loss due to production interruptions
  • Higher safety stock levels locking in cash

Given these challenges, it is clear that supply chain management software must:

  • Provide all internal and external stakeholders with real-time information
  • Create visibility into the supply chain, including orders, shipments, cargoes, containers, vessels, and SKUs
  • Identify potential risks in the supply chain as soon as possible
  • Allow for easy on- or off-boarding of external partners
  • Require minimal user on-boarding and training
  • Be able to launch without the involvement of in-house IT.

But the Market Options Are Minimal

Small and medium enterprises often operate on a tight budget, and the current options for digitizing supply chain management are limited. There are only four options available:

a) Continue with the status quo of working with just an ERP system and spreadsheets. However, this becomes unsustainable as it lacks efficiency and causes the aforementioned pains and issues.

b) Use existing supply chain solutions. Unfortunately, they are often too complex and expensive. Additionally, they require extensive user training, which inhibits the agility needed to react to changes.

c) Start with partner-provided front-ends to track shipments. However, as soon as a company works with more than one partner, it needs to use too many tools and log onto too many websites. This isn't feasible for companies with complex supply chains. They need to be able to:

  • Give internal and external stakeholders access to information relevant only to them.
  • Automate processes and workflows.
  • Onboard new partners quickly.
  • Update all information in real-time and receive automated updates when possible.
  • Collaborate with partners along the supply chain with inline chats.
  • Improve customer experience by sending updates and tracking links to customers.
  • React faster to risk events in the supply chain.
  • Lower the cost of operations.
  • Prevent revenue losses and interruptions.

d) Use a comprehensive and affordable next-generation supply chain platform, as only this will meet these demands.

To learn more on how companies can start their journey into digitizing their supply chain, download our white-paper now: Download White Paper

Get limbiq

Supply Chain Management – made easy