Digital supply chains empower businesses with up-to-date information to ensure the most efficient planning possible. Learn more about how digital technologies are changing supply chains today.
Supply chains stretch across the world and encompass everything from the sourcing of raw materials to the direct delivery of products to customers. Their complex organization, though, means that each step of the supply chain must function properly for shipments to meet their deadlines.
That’s where digital supply chains come in. Digital supply chains leverage digital technologies to capture big data produced by each step of the process and then use data analytics to ensure that logistics professionals are equipped with actionable insights to plan, manage, and strategize supply chains effectively.
In this article, you’ll learn more about digital supply chains, how they differ from traditional ones, their benefits, and their risks. You’ll also learn about the theories underlying supply chain digital transformations and explore courses that can help you start your career journey today.
A digital supply chain is a supply chain that leverages digital technologies and data analytics to guide decision-making, optimize performance, and quickly respond to changing conditions. At their core, digital supply chains are powered by the data produced by existing supply chains, which are stored in data warehouses and analyzed for actionable insights.
Digital supply chains are expected to grow in the coming years. According to Allied Market Research, for instance, the global digital supply chain market value is projected to reach $13.7 billion by 2030, a more than three-fold increase from its $3.9 billion valuation in 2020 .
Overall, as supply chains become increasingly crucial to the reliable delivery of goods and services, so too does the importance of digital technology and professionals able to manage them.
Traditional supply chains rely on the linear progress of goods and services from sourcing materials to manufacturing, distribution, and then to the point of sale. Unfortunately, as each step of the supply chain relies on the step before it, delays at one point can create costly delays in another. In effect, each step involves an assessment and planning process that can easily be thrown off schedule.
Digital supply chains use the data produced by every step of a supply chain to plan effectively and create dynamic responses when unforeseen delays arise. While traditional supply chains are often bogged down by a lack of actionable information, digital ones are empowered by a stream of real-time big data that enables more efficiently managed transportation and logistics.
The digital transformation of supply chains seeks to turn them into semi-autonomous “smart” systems capable of quickly building strategies.
One of the most prominent theories of transforming a traditional supply chain into a “smart” one is outlined by researcher Simon Ellis in a 2020 report published by IDC and sponsored by IBM. According to Ellis, an effective digital supply chain is one that is connected, collaborative, cyber aware, cognitively enabled, and comprehensive .
Called the “five C’s,” this framework asserts that an effective digital supply chain is connected to various data sources, capable of collaborating with other systems, cyber secure, and equipped with artificial intelligence (AI) and machine learning to analyze big data.
While the adoption of digital supply chains has many advantages, it also poses some risks that all logistics professionals should know. Here’s what you need to know about each:
Digital supply chains allow logistics professionals to have greater control over how they plan, manage, and organize each step of the delivery and manufacturing process. Here are just a few of the benefits of a digital supply chain transformation:
Increased personalization: Digital supply chains allow logistics companies to segment customers more granularly. As a result, customers can pick delivery options that work better for them.
Greater flexibility: Rather than waiting to be informed about delays that can take hours, days, or even weeks to be reported via traditional supply chains, digital supply chains provide logistics professionals with real-time updates that can help them plan and reroute more efficiently.
Improved planning: Logistics professionals can use predictive analytics to create more accurate forecasting models. These can be used to ensure that supply chains function effectively despite constantly changing real-world events.
As with any transformation, there are some risks that professionals should know as more and more supply chains become increasingly digitized. Here are two of the most prevalent risks facing digital supply chains today:
Cybersecurity: Greater amounts of data and automation mean that digital supply chains are susceptible to outside attacks that can compromise systems and user data. However, professionals like cyber security analysts can help prepare systems against cyber criminals.
Unprepared professionals: According to research conducted by McKinsey & Company, nearly 70 percent of digital transformation programs fail to achieve their primary objectives, largely due to employees lacking the skills required to work with new systems . Employers and professionals alike should prepare themselves for this digital change with educational courses.
The digital transformation of supply chains means that professionals working within the field have a wide range of responsibilities. Some of the most common careers include:
Supply chain engineer
A career in digital supply chains requires a comprehensive understanding of supply chain management and analytics. Start your own career journey today by taking a flexible, online course through Coursera.
Rutgers University's Supply Chain Management specialization teaches the fundamentals of supply chain management, including logistics, operations, planning, sourcing, and strategy. Their Supply Chain Analytics Specialization, meanwhile, prepares logistics professionals to make data-driven decisions to ensure high-performance management, strategic demand planning, and effective logistics systems designs for large-scale distribution systems.
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Allied Market Research. “Digital Supply Chain Market Statistics: 2030, https://www.alliedmarketresearch.com/digital-supply-chain-market.” Accessed November 21, 2022.
IDC. “The Path to a Thinking Supply Chain, https://www.ibm.com/downloads/cas/PKQXXQJM.” Accessed November 21, 2022.
McKinsey & Company. “Transforming supply chains: Do you have the skills to accelerate your capabilities?, https://www.mckinsey.com/business-functions/operations/our-insights/transforming-supply-chains-do-you-have-the-skills-to-accelerate-your-capabilities.” Accessed November 21, 2022.
This content has been made available for informational purposes only. Learners are advised to conduct additional research to ensure that courses and other credentials pursued meet their personal, professional, and financial goals.