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Technology’s Ever-increasing Role in Supply Chain Functions

For decades, the realm of transportation management, warehouse management, and order fulfillment remained set in near-prehistoric hands of isolated silos, inefficient processes, and limited accessibility. However, technology has risen to dramatically alter the execution of supply chain functions. Technology poses the greatest opportunity for small- and medium-sized businesses to take advantage of innovative tools to ensure end-to-end tracking, visibility, and processing of products.
In a Logistics Viewpoint survey, 50 percent of businesses reported sharing inventory across all channels or engaging in omni-channel practices. Additionally, the overwhelming majority, 98 percent, of businesses reported sharing inventory between online and retail locations. However, this sharing of information would have not been possible without the use of technology across the supply chain. Let’s take a look at what is driving the role of ever-increasing technology in supply chain functions and how the supply chain is adapting to meet these demands.

What’s Causing the Shift Towards Greater Use of Technology in Supply Chain Functions?

Many different factors play into why the supply chain needs an increased degree of technology in use. However, the direct causes are ultimately consumers and capacity issues. Before you can understand what this means, you must consider how supply chains do not necessarily need new technology. Conversely, they need a new type of technology; they need a combination of their existing management platforms.


Consumers Demand More Now

Prior to the rise of the Internet, consumers had no option for obtaining products beyond retail stores and catalogs. Supply chain entities were focused on providing the right product at the right place at the right time. Today, supply chain entities need to have any product available at any place at any time. This seems impossible, yet more supply chain entities have learned to leverage consumer demand against supply chain efficiency. If latency, delays, and other problems occur in supply chain functions, it may lead to customer dissatisfaction, which in turn, results in lost profits for the supply chain. Now, let’s think about the other chief cause of this switch.

Capacity Versus Capability Versus Demand

In previous posts, we have discussed the driver shortage at length. We have analyzed its causes, possible solutions, and disadvantages in today’s supply chain. However, some industry experts believe the driver shortage may not be all it’s made out to be. Yet, shippers and supply chain entities continue to cry for more drivers and larger fleets.

Abtin Hamidi, according to JOC Magazine, believes the driver crunch is simply a masquerade for hidden shipping spaces. Think about the facts of the driver crunch. There are plenty of drivers hauling less-than-truckload loads in large, truckload trailers. You must also consider how dwell time, lag time, and driver delays are giving off a sense of impending doom and inability to cope. How much deadhead is being created by drivers moving empty-hauls from location A to location B? Ultimately, the fact remains: inefficiencies still exist in today’s supply chain functions. However, technology’s growing role will change the playing field.

What Did Technology Do to Supply Chain Processes and Management Systems?

Without thinking about the supply chain, how has data storage changed for the average household? The Cloud. Without thinking about shipping, how has technology changed the lives of every person on a communicative scale? Smartphones. Now, think about what these two advancements mean for supply chain functions and processes.

This Decade’s Management Forecast: Cloudy

Introduced by Apple, the cloud quickly grew to become one of the most common aspects of data storage and retrieval. Many businesses did not realize cloud-computing technologies had already existed prior to the launch of the iPhone. However, cloud-computing capabilities is not limited to data storage and retrieval. It means smaller businesses can take advantage of software previously limited to the most financially powerful and successful businesses, which includes all levels of supply chain functions.

Cloud-based technologies allow multiple management systems, such as warehouse management, transportation management, and enterprise resource planning systems (ERPs), to communicate and share data. Furthermore, this means the costs of gaining the ability to share data is significantly less than using an integrated, on-site-exclusively sharing system. In a sense, sharing data gives everyone in the supply chain the ability to look into their functions and determine what needs to change. For example, e-commerce applications may be used to generate automated order picking, fulfillment, and shipping. Although communication between systems is a definitive marker of how technology is changing the supply chain landscape, it needs an additional data capture, and smartphones are the answer.

Smartphones Impact Real-Time Data Capture

Regardless of demographic identity and location, smartphones have become one of the basic aspects of life in modernity. Every smartphone has at least five different apps. An app controls the phone’s calling and texting capabilities. Another app accesses the internet. An app takes pictures, and another app works with email capacities. The last common app shows users exact GPS coordinates of the phone. Obviously, some smartphones have many more apps, but the last of the five is has the greatest impact on the supply chain functions.

Supply chain entities have grown to understand drivers will always carry their smartphones. Smartphones are a necessity for staying in communication and staying safe. With this in mind, some supply chain management firms, especially third-party logistics providers (3PLs), have found creating a TMS-, WMS-, and ERP-integrated, native app for the company can help cut costs.

When a driver arrives at a distribution center (DC), the app can provide direction for which loading to find, how long the loading will take, and provide digital paperwork to handoff at the destination. Now, this same concept can be applied to tracking a driver’s movements and activities. For example, unloading freight at locations A and B may leave the truck with empty space. The app could let drivers know to pick up a nearby load for return to the DC or to drop off at another destination. Similarly, the app could notify DC staff of an approaching, delayed, or other problematic truck, and DC staff can change schedules, loading requirements, or other plans to meet the truck upon arrival.

The app may also be used to track mandated requirements for drivers, such as vehicle inspections, meal breaks, and consecutive minutes spent driving. The app helps to ensure drivers maintain an efficient schedule without spending extra time logging information manually.

The role of technology across supply chain functions cannot be understated. The supply chain has the tools to expand current technologies to smaller, disadvantaged companies; however, this expansion is the ultimate cost of living in a digitally-charged age. Technology will always have a place in the supply chain, especially as cloud-based computing, e-commerce, smartphones, and improved efficiency analytics continue to thrive.

Veridian can help you realize your supply chain success. Fill out the contact information below in order to schedule a consultation call with one of our supply chain professionals.