icon27 Apr, 2023
Supply Chain Technology: How it Affects the Bottom Line
In today’s world, almost the entire supply chain runs on technology. While most people understand that technology is important in the supply chain, they may not understand just how that supply chain technology can affect the bottom line. Here’s a hint: tech usually affects the bottom line positively as long as it is the right tech.
The Right Supply Chain Technology Drives Value. Here’s How.
Visibility = Resilience = Overall Value
One of the major ways that supply chain technology provides value is by offering visibility. Technologies commonly deployed collect and analyze data to offer companies a better look at what they have (inventory management) and what they’ll need in the future (demand planning). In doing this, companies can ensure they have the right amount of product to sell, offering resilience without holding onto too much inventory.
Tech helps companies strategize better and stay ahead of the curve. The pandemic presented us with some major examples of being behind the curve as the world changed almost overnight. As supply chains screeched to a halt, companies found suppliers couldn’t deliver. If they could have gotten just a little bit ahead of the world going topsy-turvy, they may have been able to avoid stockouts. Later in the pandemic as companies turned to ordering more to promote resilience, they found themselves overstocked with nowhere to put excess freight. These are just recent examples of scenarios where the ability to more accurately forecast and add resilience would have made a huge difference.
By finding the right balance using supply chain technology, companies can drive value by maintaining the right level of inventory.
Automation Leads to Improved Productivity and Accuracy
Artificial intelligence (AI), machine learning (ML), Internet of Things (IoT), and blockchain are changing the way supply chains operate. These technologies have the potential to improve productivity through automated processes and improve inventory and order accuracy by offering a series of checks.
Automation may mean improving workers’ ability to be productive by more effectively planning a warehouse to reduce walking time between picks, synching stops on an over-the-road trip to fit in with delivery schedules to reduce downtime for truck drivers, or even streamlining computer tasks by reducing manual data entry and bringing operations into a single screen.
Wearable technology is another tech revolution that is making a big difference in employee productivity and accuracy. The potential for these types of technology has led to huge investments from big companies like Amazon in recent years.
Tech Contributes to a Healthier, Happier Labor Force
The lack of qualified labor has been a huge issue in the supply chain over the past several years. Companies are having a difficult time getting and staying fully staffed. In fact, in a recent survey, supply chain leaders confessed that labor shortages were their chief concern.
While technology can’t solve labor issues overnight, many companies are investing in technology to work towards a solvent labor force. By helping companies plan out warehouses and processes better and automating some processes, technology helps keep workers happier and healthier, saving money and improving productivity.
Supply Chain Technology Can Give You a Competitive Edge
Imagine if you used technology to offer customers lower prices, faster delivery, or better service. Improving your offerings in all those areas would give you a huge advantage over competitors.
Technology has the power to give companies that edge, that something special that makes them less expensive and easier to work with so that customers are more likely to turn to them rather than competitors.
Other Things to Think About with Supply Chain Technology and the Bottom Line
ROI is a Serious Consideration While Tech Shopping
Here are some questions you can ask potential tech vendors when you’re shopping to get an idea of whether your supply chain tech investment will pay off:
- How will this product drive value in our business model?
- What other fees or costs are associated with using and/or maintaining the technology?
- Will this technology be able to scale with my company as it grows?
- What is the tech company doing to stay on the cutting edge?
Every sales pitch from supply chain tech vendors includes stats that are often based on some of their best-case-scenario customers. You need to understand what it could mean for your business specifically and understand the total cost of ownership to understand whether the product will be able to deliver ROI for you.
It’s also important to consider whether you’ll be able to stick with a tech vendor for a while. The cost, both in time and money, to switch to a new system can take a toll. The last two questions will help you determine the shelf-life of the technology, so you know whether it’s a solid investment.
How to Get Tech Without Buying Tech: 3PLs
Would you like to see some of the benefits of deploying cutting-edge supply chain technology without actually buying it? You absolutely can!
Many companies opt to hire a 3PL that offers the types of technology they might otherwise buy. The 3PL can manage both technology needs and other parts of the logistics operation where the company either needs more logistics volume that they can’t provide internally or where they could cut costs by using a 3PL.
Want to learn more about the proprietary technology NEWL offers to our customers? Reach out to our team with questions about our tech stack and how it might drive value in your supply chain operations.