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Digital Supply Chains are Going to be the Future

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Most businesses understand the need for cost reduction. Often utility managers rely on the “That's how it's always been done,” supply chain to obtain everything from biros to reactor housings. By adapting to a digital supply chain, organizations can find cost savings.

Digital transformation can deliver impressive improvements in operational performance, reduce costs and therefore increase profits. What is holding companies back? Perhaps it is a reluctance to change.

A study by PwC found that organizations with highly-digitized supply chains can expect efficiency gains of 4.1 per cent annually, while boosting revenue by 2.9 per cent a year. This will benefit those companies which adopt it, while leaving competitors behind.

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In a traditional supply chain, many time-consuming decisions must be made. This internal process is essential for the effective operation of any company the utilities sector – it binds the organization together. The issue is that humans are imperfect, and mistakes are inevitable.

When this process is digitized, the system is automated from end-to-end by technology. It is overseen by a network of technologies and led by data – there are minimal human touch-points.

External suppliers can integrate with the system, look at the buying patterns of a particular part, monitor internal stock levels, predict how many will be required within a specific period and directly trigger an order.

This level of integration allows both customers and suppliers – up and down the chain – to operate collaboratively, and the business workflow can be modeled to provide fast, reliable information to stakeholders. This offers a higher degree of resilience in the transactions, while removing human error. Which leads to cost savings and quicker implementation of order processes.

Very few companies have a fully digital supply chain at the moment. However over the next few years, this will change. Those who are early adopters will already be reaping the bottom-line benefits and realizing new revenue streams, whilst the remainder scramble to catch up.

Julian Jackson's picture
Thank Julian for the Post!
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