Chris Yeung, senior product manager with eMoldino, explains how digitization can improve supply chain back-end operations and enable the end-to-end flow of data.

The back end of a supply chain consists of functions that aren’t customer-facing yet are nevertheless critical to the company’s success: procurement, manufacturing, distribution and logistics. All of those areas are currently suffering from factors in the external environment, including Russia’s war on Ukraine and the ongoing trade dispute between the U.S. and China. To counter the effects of such events, supply chain management must possess accurate, real-time data, Yeung says.

To make matters worse, the challenges confronting the back-end supply chain are growing more complex. The reason is a move by companies to mitigate the risk of disruption by diversifying the supplier base over multiple regions. And while that strategy helps to shore up supply chains against events that strike particular parts of the world, it also makes it more difficult for managers to obtain critical data about their suppliers — especially those beyond Tier 1.

“There’s an increasing need to have data so you know what’s happening in different parts of the supply chain,” says Yeung, adding that companies are still keen on minimizing supply chain costs while struggling to obtain enough intelligence about regions with which they are unfamiliar.

Digitization — the process of automating information flow — is key to achieving the desired visibility of suppliers, Yeung says. It allows for the collection of data from multiple parts of the supply chain, in a format that can be easily understood and analyzed, then the placement of that data in a single location accessible by all disciplines across the supply chain. In the process, companies take the guesswork out of decision-making, and don’t have to rely on the subject judgments of a handful of individuals.