DB Schenker USA CEO discusses how digitalization can help companies navigate supply chain disruptions.
David, author of Importance of Digitalization to Improve Supply Chains, is CEO of DB Schenker USA. The company is a 150 year old leading global freight forwarder and 3PL provider. David Buss is responsible for all P&L aspects in the United States, which is made up of over 7,000 employees located throughout 39 forwarding locations and 55 logistics centers.
The supply chain is currently struggling with obstacles and disruptions coming from all directions. Limited resources, increasing customer demands, and labor shortages are compounding to cause significant disruptions and delays that impact business processes, and by extension, customer service.
Logistics is ready for digital transformation in the form of Supply Chain 4.0. A form of Industry 4.0 for supply chains, Supply Chain 4.0 leverages technology like big data and analytics, robotics, automation, and Internet of Things (IoT) to improve efficiency and address the challenges in the industry.
Discover the advantages of digitization for the future of supply chains.
Key Technologies for Digitization
Demand-Driven Supply Chain Management
Keeping the supply chain flexible is a key component of weathering the challenges and obstacles in the logistics industry. Demand-driven supply chain management is nothing new, but the emerging capabilities of data analytics allow companies to better adapt to the evolving demands.
IoT devices with sensors can collect and process huge amounts of data and analyze it in real time to produce in-depth insights for informed decisions. Predictive analytics and machine learning also offer information to help companies adapt quickly to the shifts in the market.
Smart technology can be used for cargo tracking, automation, and more to offer a comprehensive view of the supply chain and possible areas for improvement. For example, remote fleet management uses smart technology to provide better transparency across the transportation network.
RFID technology is another good example of how this technology can be used in the supply chain. This provides real-time data on the vehicles in transit within a network to optimize delivery processes and minimize inefficiencies.
The digital thread refers to the use of digital tools for design, evaluation, and lifecycle management. Acting as a closed loop between the physical world and the digital world, the digital thread connects suppliers, manufacturers, and consumers to promote a more responsive supply chain.
Though a digital thread is beneficial, it doesn’t offer benefits on its own. Workflows and partners need to come together to create an integrated value chain that promotes communication and collaboration.
Cyber security is not an emerging technology, but it’s at the core of all digital transformation efforts. Despite all the capabilities of digitization technologies, they also expose companies to greater risks from errors or bad actors, which can expose sensitive information about customers or businesses.
One of the challenges with cyber security in logistics is that most companies work with partners. If all parties aren’t on the same page with security, one weak point could put everyone at risk. Suppliers, manufacturers, and all intertwined parties can make security a priority across each aspect of the supply chain. Employing an end-to-end security solution requires eliminating all ingress points to protect the network from hackers or leaks. All parties need to have the same commitment to security to ensure that the whole of the network is safe and secure.
Supply Chain Customization
One of the biggest challenges in the supply chain is the growing customer demands and expectations. As more businesses offer rapid shipping and delivery as a standard option – often for free – customers place this demand on all businesses. Any business that wants to stay competitive must offer cheap, fast shipping options.
Customers aren’t as tolerant of long processing time, excessive delays, or delivery errors that add time to the process. When this occurs, customers may be driven to a competitor. A centralized distribution solution with real-time inventory management can be used to reduce errors, expedite the processing time, and deliver on customer demand.
Technology for the Future of Supply Chains
The logistics industry is faced with rising customer demand, rising costs, labor shortages, and shipping delays that are having a detrimental impact. Digitization offers solutions to the most pressing obstacles in the supply chain with innovations like automation, data analytics, and customization to improve agility, efficiency, and transparency.