The speed at which technology within the supply chain progresses is, at times, hard to keep up with—here are 5 key signs that a supply chain needs to modernize.
Technological advancements are taking place in the supply chain all the time. In light of the transformative nature of the past year, staying abreast of those advancements is more important than its ever been. A technologically modern supply chain is what stands between a company running smoothly regardless of external pressures and it being crippled by every disruption it faces.
This article by Morai Logistics covers 5 of the most significant indicators that reveal that a supply chain needs updating in terms of its technology.
Transportation Costs are too High
One of the main issues supply chains face when they’re suffering from a lack modernization is high transportation costs. These high transportation costs, is turn, limit profits. The reason that they’re a mark of out of date technology is because now transportation management softwares exist. With them, companies are able to greatly improve the efficiency of their transportation processes, reducing costs.
As a post from BluJay Solutions explains,
You already know that transportation takes up a big chunk of doing business. Cutting and controlling these costs is a key to surviving and thriving. A modern transportation management system, such as BluJay’s Transportation Management, leverages data to help make better decisions in the moment and works over time to pinpoint opportunities for long-term savings.
Struggling with Visibility
The modern supply chain has visibility throughout its operations. With fully integrated supply chains, smart sensors, data being collected continuously for real-time insights, and so much more, companies now have the ability to always have a view of all stages of their supply chain. Moreover, this means they’re able to give their customers precise updates about their deliveries. Thus, if companies find themselves having trouble meeting their customers’ expectations as a result of not being able to provide them regular shipment information, it’s a strong suggestion that they’re lagging behind.
Having Difficulty Taking Advantage of Opportunities
Often, as the market changes, new opportunities arise. However, to sufficiently take advantage of them, quick and flexible responsivity is required in the supply chain. If a company finds itself repeatedly having trouble pulling the trigger in time, it needs overhauling. Similarly, if it doesn’t have the infrastructure to pivot to even attempt to address the opportunity, it needs a revamp. What these failings point to is a supply chain that lacks agility. Agility that comes hand in hand with technological proficiency.
Difficulty Dealing with Pre-existing Technology and Data
The integration and consolidation of data is critical to the smooth function of an up to date supply chain. It is crippling to a supply chain to be run with old digital tools that can’t interact with each other. They lead to information silos and are difficult to utilize competently. What’s more, even if the tools are used, they are limited in their scope and applicability.
An article by Supply Chain 24/7 lays out this regrettable scenario,
Only two people in the world understand your system, and they’re both about to retire. Hopefully you aren’t still relying on legacy, custom-configured technology, because if you are, odds are the people that built it will be retiring soon. Take a proactive approach to sunsetting the technology before the people who understand it aren’t around to maintain it, and you’re left with a system that could become a black box with your data locked inside.
Inventory Management Shortcomings
Very much like transportation costs, high inventory costs are also a strong sign that a supply chain needs upgrading. By having the earlier mentioned technologically augmented visibility to keep track of incoming shipments, companies can stay well stocked. On the other hand, without visibility, inventory management becomes an imprecise and costly operation.