How Digitization Is Changing The Demands Of Tomorrow’s Supply Chain Management

Bogdan Büchner

Like many companies ahead of their time, Amazon may have taken several years to actually turn a profit, but again and again they continue to be lauded as the industry gold standard in supply chain management. Their business model represents a complete paradigm shift for the entire industry and these changes are not going unnoticed.

Tomorrow’s supply chain managers must do much more than simply maintain quick fulfillment and devise omni channel outlet strategies. The future of supply chain management will require a strategic full-frontal assault on the digital retail market. Traditionally, executives have viewed supply chain as simply a matter of cost containment, but tomorrow’s executives will be cultivated from the best and the brightest of supply chain management – a shift which has already begun.

Already, supply chain professionals are not only rising to CEO level, but thriving there as a result of their full-chain vision. Their bird’s-eye view of the entire structure, from procurement to operations to quality assurance and logistics allows them to connect the dots between multiple departments to increase business efficiency on every level.

Today’s supply chain managers are tapped into digital innovations which allow them to both gather better data and offer better services. While picking accuracy may have increased by 5% due to an initiative, this still leaves retailers unable to get accurate sales data thanks to in inability to track return data. Therefore, it is difficult for supply chain management to positively point to their own efforts in increasing revenues.

But Big Data seems poised to change all that. As unit-level tracking, combined with product and consumer data becomes more and more readily available, it will simply take a savvy supply chain manager to connect the dots and fill in the gaps.

Supply Chain Management Summary

The focus of supply chain management has shifted from simply maintaining quality and service while simultaneously seeking to lower cost to a stronger and stronger focus on increasing sales and revenue.

Companies like Adidas and Amazon are leading the way in pioneering a number of new supply chain ventures like omnichannel and drone fulfillment. This ongoing paradigm shift is largely attributable to increased digitization, which has provided a wealth of new data on which to positively ascertain the outcomes of certain supply chain initiatives.

As more data becomes available with which to determine the fiscal success of these initiatives, it paves the way for more retailers to put more money into expanding the most successful ones.

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