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Digital Transformation: The Future of Supply Chains

by: Michael Yfantopulos, Intern at The Beacon Group & List Logistics

Sure, many of us are a little scared of the world becoming more reliant on technology and less on the individual. This concept of less human autonomy is concerning, yet somewhat inevitable (and that isn’t necessarily a terrible thing).

The future is often worrisome and there are costs in giving up the "traditional" way, however innovative technology can help an individual, business, or community be more productive.

What is Digital Transformation?

In Supply Chain Management, for example, digitalization is the future. The Massachusetts Institute of Technology, or MIT, began an initiative dedicated to digital supply chain transformation. A world leader in supply chain management education and research, MIT describes their research as “the analysis of digital technology and data to the transition towards value-driven supply chains.” In other words, digital transformation creates new processes and services that offer ultra-productive and cost-efficient solutions, which were previously unattainable.

I can imagine the excitement (and fear for some) around digital transformation in the workplace is like the NBA implementing the three-point line. This decision was initially met with adversity from the players, coaches, and old-timers who grew up playing the game with simply “ones and twos.” However, the deep shot proved victorious as an article on the history of the three-pointer says, "the 3-point line has made basketball a completely different experience for the fans--a more spread-out game with another level of energy that wasn't there before the 1960s.” The future, maybe more exciting? What a concept!

Why Digital Transformation?

The biggest challenge faced in digital transformation is collaboration amongst all the workers, operations, and strategies involved in the supply chain. However, when a company is coordinated during a digital transformation, tremendous results will occur. MIT says, “transforming the supply chain digitally can lead up to a 50% reduction in process costs and an increase in revenue by 20%.” A company will also notice a significant increase in organizational flexibility due to the automation of the new supply chain. A newfound flexibility will allow an organization to easily draw focus to projects that need more attention. The company will respond to adversity at a more efficient level with digital transformation to meet the customers' needs. Ultimately, having the latest technology within the industry gives a competitive advantage over other companies.

The excitement of digital transformation extends even deeper into the supply chain world. Many companies have already experienced the benefits of using digitization to reorganize their business and satisfy customers’ needs. In today’s automated society, customer demands and expectations have dramatically increased. To meet these demands, household names such as McDonald’s, Domino’s, Netflix, and Spotify have reconfigured their operations using digital transformation and now dominate their industries. We are perhaps spoiled by the instantaneous delivery of goods, but if businesses don’t stay up to date with consumer needs, then they are sure to fail. So, if companies hope to have a long-term future, the answer is digital transformation.

To conclude...

Digital transformation is the way of the future in business and beyond, so we should not run from it, but adapt to it. Like the NBA’s three-point line in 1979, the digital world is daunting, but it will ultimately improve the (supply chain) “game.”

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