In response to the many supply chain disruptions of the past two years, some companies are implementing expensive stopgap measures, such as stockpiling merchandise in trailers or chartering private shipping lines. But others are using this difficult moment to rethink supply chain management from the ground up.
Often this means accelerating digital transformation. According to a survey by MHI and Deloitte, 80% of supply chain entities are undertaking this effort in response to the COVID-19 pandemic. As businesses pursue this priority, five supply chain values are being made possible by digitization.
Connection. Supply chains are predicated on connection, consisting of a series of interrelated parts that can’t function effectively on their own. Digitization enhances these connections, providing more key data that informs every part of the supply chain.
They include location trackers for real-time progress reports, driver apps that streamline scheduling and availability, and temperature sensors that ensure products are properly stored during shipping. Collectively, these services provide a seamless experience that can inform every part of the supply chain, allowing the proverbial left hand to know what the right hand is doing.
Automation. Artificial intelligence and machine learning are redefining entire industries and workflows, with specific implications for supply chain management. As The Harvard Business Review explains, “Artificial intelligence (AI), internet of things (IoT), predictive analytics, and other transformative technologies can help enterprises respond to sudden shifts in demand and supply trends, and plan for such shifts in advance.”
AI can produce sophisticated load routing and building, allowing shippers to be more dynamic and responsive. For example, if one region is disrupted, AI can enable businesses to navigate real-time demands by suggesting that shippers send loads earlier, schedule team drivers, or take a different route.
In this way, automation can help companies become more proactive without constantly monitoring supply chains for possible modifications.
Intelligence. Supply chains are complicated, including dozens of steps and touchpoints. Many large and small businesses still rely on spreadsheets, fax machines and other less-intelligent technologies to manage interactions.
AI is updating this dynamic, replacing dozens of manual processes with intelligent technology that decreases days of work to just a few minutes. This includes e-mail and text communication, inventory management, pricing considerations, shipping logistics, load matching and route optimizations.
Mobility. There are more than 1.5 million trucking companies. Many are small businesses operating just a few trucks, with the average driver age approaching 50 years old. Collectively, the U.S. needs 80,000 more truck drivers to meet expected demand, and shipping companies will need to engage younger generations to fill this void.
These young professionals don’t want to make dozens of phone calls to book a load. Instead, they want to use mobile technologies that are intuitive and easy to use. That’s why supply chain entities must invest in user-friendly mobile apps, outfitted with simple “click-to-book” functionality that simplifies workflows and engages a younger generation of workers.
Digital transformation can eradicate the need for phone calls, instead relying on automation and mobile apps to facilitate logistics.
Sustainability. Whether responding to urgent climate change realities or mitigating the impact of rising fuel costs, shipping companies desperately need more sustainable solutions. Digitization can help.
AI-powered planning efficiencies can significantly reduce the number of empty miles where drivers operate empty vehicles. Since empty miles account for more than a third of all miles, this presents an opportunity to reduce fuel consumption and lower costs at a critical time.
At the same time, better technologies can support effective deliveries of fresh food and other perishable items. In the US, up to 40% percent of the food supply is wasted, and 40% of that total comes from the supply chain. Digital transformation can improve these outcomes through enhanced logistical planning and the use of IoT sensors to monitor and report safe storage standards.
Companies can draw on the power of digitization to enhance supply chain efficiency, effectiveness and reliability. It’s a priority worth pursuing today, to prepare supply chains for tomorrow and beyond.
Syed Aman is the founder and chief executive officer of Hwy Haul.
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