supply chain automation and digitalization

supply chain automation and digitalization

Over the years, supply chain operations have changed from being a part of the purchase and sales domain to a separate identity. These days, the supply chain looks after an organization’s logistics and plans the operations according to the demand analysis.

Although the supply chain operations have improved over the years, many flaws were still exposed during the Covid-19 pandemic. “Supply Chain 4.0”, a supply chain digitalization, has been introduced to overcome these flaws.

Supply chain 4.0 includes using modern technology to crunch data streams across departments. Helping organizations to uncover new possibilities, highlight any challenges in the process, and detect system-wide patterns in the works. By merging and integrating new technology, corporate organizations may gain a more comprehensive perspective of internal and external data while overcoming potential departmental gaps.

According to a report by Gartner, more than half of big worldwide organizations will utilize IoT, machine learning, and technical analysis in supply-chain operations by 2023. According to the research, this shift toward digitizing supply chain activities will be controlled by humans who will collaborate with new technology.

Supply Chain Management Latest Trend

Industry 4.0 causes upheaval and forces businesses to reconsider how they construct their supply chains. Several technologies have evolved that are disrupting established modes of operation. Furthermore, megatrends and customer expectations alter the game.

Aside from the necessity to adapt, supply chains can advance to the next level of operational performance, capitalize on developing digital supply chain business ideas, and turn the organization into a digital supply chain.

Customer expectations are rising: the recent online trend has resulted in higher service demands and considerably more order granularity. There is also a clear tendency toward greater individualization and customization, which drives the SKU portfolio’s rapid expansion and continual modifications.

The online-enabled accessibility and simple access to many alternatives for where and what to buy fosters supply chain competitiveness.

To capitalize on these developments and meet changing demands, supply chains must become considerably quicker, more granular, and more exact.

Why Should The Supply Chain Be Digitalized?

The supply chain’s digitization enables businesses to address evolving customer demands, supply-side difficulties, and unmet efficiency improvement expectations. Digitization will bring supply chain 4.0, which will have the following features;

Fast Process:

The shipment time of high runners is now only a few hours, thanks to new product distribution methods. Advanced forecasting techniques serve as the foundation for these services.

Forecasts are made every week, and in the case of highly fast-moving products, even daily.

In the future, “predictive shipping,” for which Amazon has a patent, will be used, in which orders are shipped out before the customer places them. A shipment already in the logistics network and headed toward the customer is later matched with the customer order, and the load is then rerouted to the precise customer location.

Flexible System:

Ad-hoc and real-time planning enable a flexible response to shift supply or demand conditions. Planning becomes a continuous process that can respond dynamically to shifting requirements or constraints, with fewer planning cycles and frozen periods.

Increased delivery process flexibility after the products are shipped enables customers to reroute shipments to the most practical location. The flexibility of the supply chain organization is increased by innovative business models, like Supply Chain as a Service for transport management functions.

Instead of having the capabilities and resources in-house, the supply chain can be purchased as a service and paid for by usage. Service providers can generate economies of scale, economies of scope, and appealing outsourcing opportunities thanks to their specialization and focus.

Granular Features:

Customers are continually asking for products that are more and more customized. That gives micro-segmentation a strong push, and mass customization ideas will finally be implemented.

Customers are managed in much smaller groups, and a wide range of appropriate products will be provided. Customers can now choose from a variety of “logistics menus” to find the option that best suits their requirements.

Companies can effectively manage the last mile for single and high-value dense packages thanks to new transport concepts like drone delivery.

Leveraging Supply Chain 4.0 To Improve Operational Efficiency

Map the six primary value drivers to the Supply Chain 4.0 improvement levers. In the end, the advancements allow for a step change in capital, agility, cost, and service.


Automation of knowledge labour, big data, and sophisticated analytics will considerably benefit future supply chain planning. Confined planning and predictive modeling in forecasting demand are two examples of powerful levers.

Better Connectivity

Through improved connectivity, cutting-edge analytics, rapid prototyping, and advanced automation, logistics will experience a significant step change. For instance, as warehouses become more automated, the number of autonomous and intelligent vehicles will significantly increase, and the use of 3-D printing completely alters warehousing and stock management strategies.

Performance Monitoring

In fact, performance management is changing dramatically. Previously, KPIs were only provided at an institutional level, making the building of KPI dashboards time-consuming. Granular data, on the other hand, is now readily accessible in real time from both external and internal sources. As a result, the management of performance evolves from a normal, monthly-to-month procedure to an operation focused on addressing exceptions and continuous improvement.

Order management

No-touch order processing and real-time replanning are two examples of how order management is improved. These methods result in lower costs through the automation of tasks, more excellent reliability due to granular feedback, and a better customer experience through prompt and trustworthy responses.


These are some of the benefits of automating and digitizing the supply chain. The future of the supply chain will be digital, which is inevitable, but how fast this will happen is yet to be seen.


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