How Digitization Promises to Change the Landscape of the Supply Chain Sector
"Headquartered in Mumbai, Freightcrate Technologies is an end-to-end Logistics & Supply Chain solutions company specializing in the areas of Logisitics, Supply Chain, Online Freight, Freight Forwarding, Transportation, and many others."The landscape in the digital era is changing fast. Customer expectations, which remain sector-agnostic, have increased. Most companies have accepted that they must leverage technology to meet these expectations to even stay a float, let alone profit. Companies have embraced digitization to give customers exactly what they want, when they want it. But one sector that has been slow to do so is supply chain.
Manufacturers comprise the biggest chunk of customers for logistics partners and freight forwarders. From our observation, manufacturers across industries place a high value on speed, accuracy and agility within the end-to-end supply chain. This keeps them competitive. Manufacturers also want to transport goods faster, with more flexibility and at low (or preferably no) delivery cost.
However, the supply chain sector finds it tough to deliver on these metrics. This is because of the glaring lack of digitization. A recent McKinsey study on how digital transformation is raising the supply chain sector’s performance found that merely 2 percent of executives in the supply chain sector focus on supply chain in their digital strategies. The study further went on to elaborate that globally, the average supply chain has a digitization of just 43 percent, the lowest among most business areas.
The lack of digitization is a big handicap for customers of the supply chain sector. Here are three ways in which it affects them and impacts the profitability of the supply chain sector.What we’ve also included in this post are measures to overcome these challenges and bring in efficiency in the freight forwarding and supply chain space.
1. Customer Decision-Making
The supply-chain process can typically be separated into the preshipment phase, the shipping phase and the post-shipment phase.
The first phase comprises of finding and engaging with the freight forwarders, comparing costs and identifying solutions that are time-and cost-effective. Digitization, or the lack there of, means customers spend
precious time on tedious tasks like comparing and calculating rates and turnaround time, which could end up being inaccurate and expose them to risk.
Digitization, like an online logistics marketplace to begin with, can help customers make faster and more accurate decisions at each stage. They enable customers to comparerates real time and bring in transparency in prices, cost effectiveness and efficiency. Such decisions will eventually impact customers’ efficiency, responses to legislation and mitigation of overall risks
" Transparency is the need of the hour in the supply chain sector today, as it can increase speed and accuracy of shipments while enabling businesses to make sharper and faster decisions "
2. Meeting End Customers Expectations
We live in an era which demands more and more customized goods, and manufacturers are responding to these demands. This spells good news for end customers and manufacturers, but it means a lot of hard work for the logistics sector.
The lack of digitization in the supply chain sector means manufacturers have low(or no)rea-time information or analytics for the second phase i.e. their end-to-end supply chain. A survey by i-Scoop highlights that 89 percent manufacturers prioritize a single view of supply chain. However, a whopping 70 percent of them have no end-to-end visibility. This means delivering upon customer promises and responding to their real-time demands – which has become mandatory in today’s complex business landscape – poses a huge challenge for them.
Digitization can assist in bridging this gap efficiently through better visibility technologies like Blockchain. This not only provides stakeholders with real-time updates on the status of their shipments, but also with meaningful intelligence to helps supply chain managers deal with specific situations like changing material planning and schedules according to customer needs, better.
3. Customer Engagement
Last-mile delivery is a relatively recent phenomenon in the supply chain sector. Until a decade or two ago, consignees had to handle this part of the supply chain by themselves. However, the internet has changed things. Consignees now expect last-mile delivery to be handled by shippers too. This is why manufactures now prefer working with freight forwarders who deliver on this requirement with minimum fuss(and cost).
Digitization empowers supply chain managers with real-time visibility on shipments. Also, it provides them with meaningful intelligence to take better decisions in the third phase – post shipment. They can choose warehouses to stock goods,and transporters to deliver goods, based on factors like turnaround time and cost. They can also store this data and use it to make quicker and better decisions in the future, to benefit their customers. This increases efficiency and directly affects the profitability of supply chain companies.
Summing Up
Digitization can turn the supply chain sector from a reactive industry into a proactive one, and accelerate trade across the globe. According to research by McKinsey, “companies that aggressively digitize their supply chains can expect to boost annual growth of earnings before interest and taxes by 3.2 percent- the largest increase from digitizing any business area—and annual revenue growth by 2.3 percent.”
Transparency is the need of the hour in the supply chain sector today. It can increase speed and accuracy of shipments while enabling businesses to make sharper and faster decisions. All this will help businesses – small, large and medium – become more efficient, flexible and competitive since they’ll be able to cater to customers’ ever changing demands faster.
Digitization, like an online logistics marketplace to begin with, can help customers make faster and more accurate decisions at each stage. They enable customers to comparerates real time and bring in transparency in prices, cost effectiveness and efficiency. Such decisions will eventually impact customers’ efficiency, responses to legislation and mitigation of overall risks
" Transparency is the need of the hour in the supply chain sector today, as it can increase speed and accuracy of shipments while enabling businesses to make sharper and faster decisions "
2. Meeting End Customers Expectations
We live in an era which demands more and more customized goods, and manufacturers are responding to these demands. This spells good news for end customers and manufacturers, but it means a lot of hard work for the logistics sector.
The lack of digitization in the supply chain sector means manufacturers have low(or no)rea-time information or analytics for the second phase i.e. their end-to-end supply chain. A survey by i-Scoop highlights that 89 percent manufacturers prioritize a single view of supply chain. However, a whopping 70 percent of them have no end-to-end visibility. This means delivering upon customer promises and responding to their real-time demands – which has become mandatory in today’s complex business landscape – poses a huge challenge for them.
Digitization can assist in bridging this gap efficiently through better visibility technologies like Blockchain. This not only provides stakeholders with real-time updates on the status of their shipments, but also with meaningful intelligence to helps supply chain managers deal with specific situations like changing material planning and schedules according to customer needs, better.
3. Customer Engagement
Last-mile delivery is a relatively recent phenomenon in the supply chain sector. Until a decade or two ago, consignees had to handle this part of the supply chain by themselves. However, the internet has changed things. Consignees now expect last-mile delivery to be handled by shippers too. This is why manufactures now prefer working with freight forwarders who deliver on this requirement with minimum fuss(and cost).
Digitization empowers supply chain managers with real-time visibility on shipments. Also, it provides them with meaningful intelligence to take better decisions in the third phase – post shipment. They can choose warehouses to stock goods,and transporters to deliver goods, based on factors like turnaround time and cost. They can also store this data and use it to make quicker and better decisions in the future, to benefit their customers. This increases efficiency and directly affects the profitability of supply chain companies.
Summing Up
Digitization can turn the supply chain sector from a reactive industry into a proactive one, and accelerate trade across the globe. According to research by McKinsey, “companies that aggressively digitize their supply chains can expect to boost annual growth of earnings before interest and taxes by 3.2 percent- the largest increase from digitizing any business area—and annual revenue growth by 2.3 percent.”
Transparency is the need of the hour in the supply chain sector today. It can increase speed and accuracy of shipments while enabling businesses to make sharper and faster decisions. All this will help businesses – small, large and medium – become more efficient, flexible and competitive since they’ll be able to cater to customers’ ever changing demands faster.
