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What are Digital Supply Chains? How Will They Affect Business?

We explore how digital supply chains work, why they’re the future of global commerce, and how companies can design a digital supply chain.

Technologies like cell phones and cloud computing keep us connected. But did you know that these same technologies are connecting entire supply chains? Enter the digital supply chain, where data and artificial intelligence come together to optimize the flow of goods.

In this article, we’ll explore how digital supply chains work, why they’re the future of global commerce, and how companies can design a digital supply chain as a part of their chain strategy.

What Is The Digital Supply Chain?

Digital supply chains use a combination of data, automation, and artificial intelligence to optimize the flow of goods and services from the beginning to the end of the chain. This marriage of technology and connectivity allows for real-time monitoring, newfound operational flexibility, business agility, and better forecasting. 

A digital supply chain enables the integration of data and processes across the entire value chain, from raw materials to end customers–creating a connected, responsive, and efficient value chain. This allows for better coordination, collaboration, and decision-making across the entire supply chain. This is in stark contrast to traditional supply chains, which rely on more manual and less transparent processes. 

The digital revolution of supply chains is just one of the many changes we see as businesses shift into Industry 4.0 applications and use cases. Digital supply chains are key to Industry 4.0, as they enable the integration of advanced technologies and data analytics across the entire value chain, to create intelligent and connected supply chains.

Benefits of a Digital Supply Chain

The interconnectedness of data and technology brings a variety of benefits to the supply chain. These benefits include:

  • Improved Customer Service - Immediate order status, faster fulfillment times, and better order accuracy all improve customer experience. Businesses using digital supply chains effectively can expect to see longer customer retention and a higher customer satisfaction rating.
  • Better Collaboration and Communication - Digital supply chains enable greater collaboration and communication between suppliers, manufacturers, logistics providers, and customers to allow more efficient and effective supply chain operations.
  • Robust Risk Management - Server logs, firewalls, and continuous monitoring provide the foundation for better risk management. Analog processes now have digital counterparts, that can be investigated forensically if needed.
  • More Flexibility - Automation and orchestration across the digital supply chain enables businesses to scale more efficiently and predictably. Both company acquisitions and strategic partnerships can seamlessly integrate into a single digital supply chain with proper planning.
  • Improved Forecasting - Whether you’re estimating future demand or calculating inventory, artificial intelligence across a digital supply chain can help businesses make smarter decisions faster.

Challenges in a Digital Supply Chain

While digital supply chains continue to grow in popularity, they aren’t without their challenges. Below are a few of the most common issues found in digital supply chains, and what you can do to avoid them.

Increased Complexity - Building a digital supply chain without proper planning can lead to increased complexity across your chain. This in turn can impact the effectiveness of your IT staff, cybersecurity, and data quality. The best way to avoid complexity is to build your digital supply chain methodically, after proper planning and testing.

Training and Procedures - Digital supply chains often come with new technology some staff might not be familiar with. This can lead to frustration among staff, inefficiencies, and a lack of coordination across the chain. You can avoid this by ensuring each phase of your digital chain has its own training materials for staff when necessary.

Cybersecurity - By far, one of the biggest challenges in digital supply chain technology is cybersecurity. Many cybersecurity issues can be avoided by implementing a few basic best practices. Avoid these issues by regularly scanning for vulnerabilities, keeping systems up to date, and auditing access and controls across your tech stack.

Change Management - Implementing uniform security, network, and service policy changes across multiple layers of technology can be difficult - especially when unorganized. You can make change management easier across your chain by implementing procedures for each change, and using configuration management software when appropriate.

How Digital Supply Chains Work

Digital supply chains rely on multiple layers of technology working together to transform real-time data into actionable information. This information is either sent to a human to respond or triggers a series of automations.

For example, artificial intelligence can use historical and real-time data to predict there will be a shortage of materials next month. Retailers can use this information to automate an extra shipment of materials, or set up a failover where a backup supplier is selected.

Below are a few examples of the different technologies that make up a digital supply chain:

  • Internet of Things Sensors (IoT) - IoT sensors collect data from across the chain and send that information back to the server for processing. Data such as inventory count, GPS coordinates, and speed can be valuable data points.
  • Private 5G - Enterprises leverage a private version of 5G networking technology to securely and reliably support their supply chain without exposing their intellectual property to third parties.
  • Cloud Computing - Cloud computing enables data processing from anywhere in the world. This process transforms raw data into supply chain insights for humans or automated systems.
  • Artificial intelligence (AI) - Artificial intelligence uses machine learning to make better decisions faster. Digital supply chains use AI for forecasting and automation. AI can be improved and scaled as it learns from more datasets.
  • Autonomous Machines - On the fulfillment end, autonomous picker robots can dramatically improve order times, fulfillment accuracy, and smooth over performance issues during labor shortages.
  • Blockchain - Some suppliers leverage blockchain technology to create a transparent immutable ledger across their chain. This helps improve security, increase transparency internally and can be a valuable tool for investigating potential fraud.

The Backbone of a Digital Supply Chain

All digital supply chains rely on communication to succeed. Without reliable communication data becomes inaccurate, blindspots form, and inefficiencies mount. Real-time data is the lifeblood of digital supply chains, so picking the right network can mean the difference between success and failure.

For years, enterprises have relied on commercial cellular networks for wide-area coverage and connectivity across their supply chain. While this worked for a while, resource bottlenecks, limited support, high costs and privacy issues stifled modern supply chain growth.

Today, private 5G now gives enterprises full control over their coverage, wireless performance, network resources, and data privacy. Companies use high-powered 4G or 5G indoor and outdoor access points to provide ultra-low latency blanket coverage whenever and wherever their chain needs coverage.

The private 5G model enables businesses to control their cellular resources and service quality on a granular level. This makes it easy to enforce application-specific KPIs and integrate 5G into existing applications and infrastructure.

A Network Designed For Digital Supply Chains

Celona provides enterprises with their own turnkey private wireless solution designed for digital supply chains. Through a robust and private 5G LAN architecture, organizations maintain complete control over traffic flows, user connectivity, and data privacy across the supply chain.

Celona’s 5G LAN solution integrates directly with your existing IT architecture allowing administrators to enforce QoS in the air and on the wire, across the entire enterprise network – all from a cloud-based console. Behind the scenes, the Celona Edge O/S provides advanced traffic management for your service level objectives– allowing the strict quality of service metrics such as latency, packet loss, and throughput to be automatically enforced for individual application flows or device groups.

Celona makes deploying 5G LANs fast and enoasy– integrating private wireless directly with your existing IT network services, policy, and security systems. Onboarding can be done alongside existing wireless and IT infrastructure, without interrupting business operations.

If you’re looking to strengthen your supply chains, Celona can help. Check out our network planner to estimate the size of your 5G LAN on the private cellular spectrum, or test-drive Celona’s unique solution for yourself with a free trial.

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