Digital Transformation: Digital Transformation is Changing Supply Chain Relationship


Digital Transformation: Digital Transformation is Changing Supply Chain Relationship

In recent years, digitization has touched upon all aspects of businesses which also include the supply chain. Older supply chain systems have been replaced by more open, adaptable, agile, and collaborative digital models thanks to newer technology like GPS, RFID, and sensor technology.

Supply chain digital transformation speeds up supply chain management innovation by enabling business process automation, organisational flexibility, and change management. Companies looking to take maximum advantage of digitized supply chain models must make it an integral part of their organizational structure and business model. In this article, we will see how digital transformation is changing supply chain relationships.

What is a digital supply chain?

A supply chain has a flow like - goods and services sourcing and procuring parts and raw materials, designing and creating a product, estimating the demand, arranging logistics and sales channels, and finally providing customers with visibility into their orders.

A digital supply chain is unique because it gives additional insight into how the chain functions. It involves incorporating and using cutting-edge digital technologies across the supply chain, from inventory management and purchase data to transportation and distribution.

The purpose of supply chain digitalization is to provide more profitability and insights for more effective operations. Businesses that have digitally transformed their supply chains are better able to move their merchandise, people, resources, and other resources to wherever they are needed at any given time. By anticipating hazards in manufacturing and transportation, prices can be decreased.

Supply Chain Relationships and Digital Transformation

Organizational adaptability, business process automation, and supply chain management innovation are all accelerated by digital transformation. Companies must incorporate digitised supply chain models into their broader business models and organisational structures if they want to benefit the most from them.

The change has to come in and companies will have to change the way they develop and manage relationships with other companies in the supply chain to facilitate new types of agreements and alliances. It will call for managers with relationship-building responsibilities in the supply chain, such supply managers or account managers, to embrace a boundary-spanning approach. Cross-organizational experimentation, cooperation, and trust will be made easier. A Mckinsey survey of supply chain executives found that 93 percent of them planned to nearshore or regionalize their supply networks in order to increase their resilience.

The supply chain industry has been impacted by digital transformation.

According to a study, by 2023, businesses that have experienced digital transformation would contribute more than 50% of the world's GDP. This data is a great proof of the importance of digitization of the supply chain.

Below are some ways digital transformation is changing supply chain relationships:

1. Identify opportunities to interact with other business representatives: As discussed above, supply chains have undergone major changes to digital transformation. It presents the opportunity to change the communication model with those interested in changing the nature of cooperation. Third-party companies have also made adjustments to their work.


2. Success can be measured: Every project created around digital transformation needs to have a clear strategy, plan, and goal. It allows organizations to track the result and success of this newly formed cooperation. Yes, sometimes you will face difficulties and may fail, but you will have the data to analyze how to achieve the desired results.

Organizations need to have performance indicators so they can implement adjustments in the course of interaction with partners. Organizations on the path of digital transformation save time for data collection and analysis.

Companies have to spend hours every month filling tables and receiving information on each sale, transaction, etc. With automation, all this is taken care of, and it improves the company's efficiency.

3. Helps develop boundary-spanning managers: The managers involved in implementing the new relationships have to be open to unfamiliar ways of doing business. The need to identify the value of non-traditional opportunities, create agreements that maximize the value captured and lower the potential risks, and find the best partners. It means that companies adopting digital transformation are promoting new roles and supporting systems.


4. Implementation of responsive contracts: The challenge of executing digital transformation is the requirement to establish new business relationships and build new business procedures with unknown corporations. Everything should take place in a trusting environment.

With transformation, there is a big plus for companies. The digital world opens up access to electronic contracts which saves time beyond imagination. For example, when you work on paper, each document must be drawn up new with changes. All of them need to be stored in a separate folder and if they are lost or misplaced, it is extremely difficult to recover the data. With electronic documents, everything is placed in one place, and it is impossible to lose the data. The contracts can easily be changed and copied depending on the needs.

5. End-to-end Customer Engagement: Customer engagement in this process will rise as a result of digital supply chain management revolution. For instance, using the supplier's automated tracking system, a client can keep track of his order information after placing it and until he receives it. Customers will have more control, feel safer, and value their experience while purchasing that brand as a result of this.


6. Accelerates Innovation: Innovation is the single objective of any process of digital transformation. The company's business model will be strengthened thanks to this

advancement over the traditional supply chain management method, and at the same time, relationships with customers and suppliers will be strengthened.

Problem with digital business transformation

Despite facilitating the company's work, the digital transformation of the supply chain and other components requires business representatives to have closer relationships with each other. It may cause problems for others because it requires building trusting relationships - which cannot be built overnight.

Another challenge companies face is the need to change the way they establish and manage relationships with other companies. New contracts, meeting new people, and not always successful cooperation - are common problems for business. But when they switch to digital transformation, things get different. We will look into the benefits in the next section.

Despite the challenges, digital transformation has many benefits for the enterprise's future.

What are the Top Tech Trends in Supply Chain Digital Transformation


The following are the top tech trends in supply chain digital transformation that would be relevant in years to come:

1. eCommerce Integration:

Modern supply chain management technology enables B2B sellers to locate and address any inefficiency in their supply chain models. They can provide seamless client experiences and conduct effective operations thanks to connected systems. As a result, businesses are beginning to take advantage of integrated supply chains for their eCommerce processes, allowing for the free flow of information between departments.

2. Artificial Intelligence:

Supply chain firms can use artificial intelligence (AI) to better grasp complicated information, improve human performance, and automate repetitive processes by using a toolbox of technological alternatives.

Supply chain leaders are currently using AI and analytics to address long-standing data silos and governance issues. Due to its characteristics, previously remote or dissimilar networks of stakeholders can now be more effectively integrated and visible.

3. Internet of Things (IoT):

The internet of things (IoT) is a network of physical items. The Internet of Things already has a major impact on the supply chain, but with more and more applications, it is expected to gain much more significance. 50% of businesses may be utilising other cutting-edge technology to support supply chain operations in the next several years.

4. Blockchain:

Businesses have greatly benefited from using blockchain to reduce supply chain interruption and enhance customer service. Global investment on blockchain technologies is anticipated to reach over 19 billion dollars by 2024. This technological movement has brought together several business sectors, including carriers, shipping lines, and logistic providers, into a single platform during the last few years.


Organizations of all sizes may easily forge partnerships with new or current partners thanks to digital transformation. Both sides receive their desired outcomes as a result. New horizons open up for creating more customer-oriented projects when everything is in the digital sphere. To sum up, each party is interested in and participates in the life of another organization