The COVID-19 pandemic acted as a catalyst for digitalization, forcing many companies to adapt their systems in a very short time. However, the demands on supply chain management (SCM) were already rising before COVID-19: the ability to make decisions even in the face of unexpected events has been a goal in SCM for many years. Furthermore, supply interruptions and delays have highlighted just how vulnerable supply chains are.
In this blog post, you will find the top 3 reasons why you should make your supply chain management more collaborative, as well as an overview of the current situation and an outlook on the digital logistics of the future.
Status quo
“Constantly shortening product life cycles, increasing demands for delivery flexibility, and a discernible trend toward ‘virtual’ corporate networks are placing greater demands on companies' planning and coordination capabilities. Companies that want to be sustainably successful in such networks must, in terms of supply chain planning capabilities, not only master their own internal planning—which increasingly takes place within a network of plants—but also ensure that their own planning processes are ‘synchronized’ with those of customers and suppliers,” (Hillek 2001).
When operating capacities in logistics centers had to be reduced at short notice last year, companies were simultaneously confronted with unpredictable customer behavior and disrupted supply chains. For those that had not yet digitized their processes, doing so quickly became essential to maintaining the flow of goods. After all, resilient and, above all, transparent processes throughout supply chain management are the best way to respond to volatile economic and social circumstances.
In December 2020, we surveyed more than 300 logistics experts from our network about how they rate their company's level of digitalization. One of the questions asked was how they rate their access to key KPIs for managing internal logistics processes. Here are the results:
Question: “To what extent do you agree with the following statement: ‘In my company, all desired management and reporting-relevant KPIs are available quickly and reliably at all times.’”
A good three-quarters of respondents are unable to access the reports and metrics that would significantly simplify their day-to-day business. Digital supply chains enable employees to react quickly to emerging problems and make fact-based decisions.
You can find even more of these insights in the TradeLink KPI Report 2021, which you can download here.
What is the future of logistics?
The future of digital logistics lies in the cloud. To connect global supply networks, it is essential to switch to cloud-based software. This helps your company implement new solutions quickly and scale easily as your requirements grow. At the same time, you save on your own IT resources, as cloud software is ready to go immediately without any implementation effort.
The BVL has reported that acceptance of cloud solutions has increased significantly, especially over the past year. This is mainly due to the fact that necessary data can be accessed from anywhere. The only requirement is an internet connection—providing all parties along the supply chain with access and a secure communication channel. This makes collaboration along the supply chain particularly helpful for risk management.
3 reasons for more collaboration along the supply chain
1. Social responsibility and sustainability
The globalization of all transport routes and the associated political efforts to curb greenhouse gas emissions are creating an awareness of sustainable business practices. More and more companies are rethinking their strategies and integrating a sustainability perspective into their corporate structures. Seamless supply chain collaboration saves resources sustainably and reduces transport routes—which also has a positive impact on your ecological footprint.
2. Flexibility
Mittelstand Heute highlights the increasing pace of supply chain management. As products are distributed faster and reach more customers through omni-channel marketing, logistics must keep up. By collaborating along your supply chain, you create greater flexibility should unforeseen events, such as a pandemic, occur. According to experts, rigid value chains should be a thing of the past by 2040 at the latest.
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3. Autonomy
Increasingly congested roads lead to mobility issues and longer delivery times. As we have already explained, cloud-based SCM solutions make it easier to manage and regulate the supply chain. By connecting logistics providers, suppliers, and customers, and by monitoring inventory levels and providing precise delivery tracking, your company becomes more autonomous. You are no longer dependent on partners because you are all pulling in the same direction.
At TradeLink, our mission is to be your strategic partner for supply chain collaboration and to revolutionize logistics together with you.
Want to know how TradeLink works? Simply send us a request for your personal, free demo with one of our logistics experts.
