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Digital transformation is the process of transforming a business from its traditional, analog state to a digital one. This transformation happens at the organizational level, as well as at the level of the entire supply chain and logistics network that keep critical business functions running smoothly. This can include the adoption of new technologies and methodologies, such as the use of blockchain in supply chain and logistics, or the implementation of standards that create a common language between different stakeholders.

With digital transformation reshaping the supply chain, businesses are increasingly embracing a “demand-driven” model that brings greater flexibility and agility to supply chain planning. This model relies on real-time demand data to trigger inventory replenishment and identify the optimal sourcing location for raw materials. Businesses can also use data analytics to optimize their supply chain by identifying areas where waste is occurring and taking corrective measures to address these inefficiencies. The data-driven insights can also help businesses choose optimal transportation modes and carrier partners, given expected volumes and destinations.

As businesses inject greater automation into their supply chains, they are also embracing a “store-less” model whereby they offer customers the option to purchase products without visiting a physical store. This model leverages the major benefits of e-commerce, such as easier access to a wider customer base and lower costs of customer acquisition, but it requires a sophisticated logistics network to ensure that goods are quickly and efficiently delivered to customers. For example, businesses can leverage data analytics to map out the most cost-effective delivery routes for each customer. This allows businesses to minimize delivery times and maximize customer satisfaction by offering same-day or next-day shipping.

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The Internet of Things (IoT) refers to the growing network of devices — such as sensors, smart appliances, and wearable devices — that connect to each other over the internet. When applied to supply chain and logistics, IoT devices allow stakeholders to collect data about the state of their operation and the surrounding environment. This data can include information about weather conditions, location, and temperature. When integrated with a business’s backend systems, these devices can enable the transmission of critical data, such as the location of a truck or the amount remaining in a warehouse’s stock. Most importantly, IoT devices enable stakeholders to take action on this data.

Artificial intelligence has the potential to transform supply chains and logistics by bringing advanced analytics to forecasting and planning. When applied to forecasting, AI can help businesses determine future demand based on weather conditions and other environmental factors. Similarly, when applied to planning, AI can help businesses determine where additional resources — such as inventory, personnel, or transportation — are needed. AI’s biggest impact on supply chain and logistics is its ability to automate manual tasks. This includes the collection and analysis of data, the identification of anomalies, the triggering of workflows, and the implementation of corrective actions.

Digital transformation has the potential to redefine the landscape of supply chain and logistics and usher in a new era of higher customer satisfaction, increased revenue, and reduced costs. In fact, its impacts take place on an organizational level, as supply chain and logistics are the backbone of a business.


Beyond supply chain and logistics levels

Today operational efficiency is critical to the success of a business. Digital technologies can improve operational efficiency and productivity in several ways. One of the most widely used systems in supply chain management is Enterprise Resource Planning (ERP), which are systems that help companies manage their resources. Digital technologies can also help companies automate their processes, leading to increased efficiency and productivity.

The second way that digital transformation is impacting logistics and supply chains is through the increased transparency and visibility it provides, which in turn helps companies make better decisions. For example, by tracking the movement of goods and materials in real-time, companies can understand where things are in the supply chain and the estimated delivery time and make better decisions about production and inventory management.

All of the above impacts eventually lead to a smoother customer service. By collecting customer’s data from the supply chain and logistics end, the company will be able to accommodate demand and ensure customers can always receive their desired products in a perfect condition and in a timely manner. Additionally, companies can use digital technologies to improve the speed and accuracy of their customer service and improve customer loyalty and satisfaction.

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