Supply Chain Digitization: Enhancing Efficiency and Reducing Costs

In 2024, everything is digital; however, some industries are still lagging behind. Now, while supply chain is not one of those industries (in fact, it was among the first to be fully digitized), a lot of enterprises are still underutilizing the amazing advantages of this concept.

Sure, everyone knows that optimal routes save money and deliver products sooner, but this is not all there is. Supply chain digitization can make a huge difference in your overall operational efficiency, and here are some factors you have to consider.

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1. Better oversight of all your assets

The first improvement you will be able to make when your entire supply chain is digitized is to get a better insight into available vehicles. We’re not just talking about idle vehicles but vehicles that will soon be done with their delivery. This also helps you avoid overworking the same vehicles over and over again and helps you use your vehicles in a safer, more efficient way.

Next, you’ll get yourself a list of available drivers. Road fatigue is a real concern, and earlier, cruder versions of these tools had a hard time keeping track of their previous track record. Sure, eight hours of sleep is enough for one to recuperate, but not if they’ve driven for 12 hours straight, every day, for the previous few days. 

Work hours and overtime are sometimes hard to keep track of, but when digitized, integrating these processes with your payroll system becomes quite easy. This helps alleviate a lot of the burden on your accounting team. 

With the help of the right tool & equipment management app, every use will get an automatic work order, which means that everything you do will leave a digital trail. These will help improve your subsequent analytics and even keep you safe if there’s ever a need for an investigation. 

Analyzing your capacities and capabilities is also huge from the perspective of your PR. After all, your delivery estimates (those you’ll give your customers) will be far more accurate. 

Finally, reports are also important for legal purposes, and with better tools, you’ll have access to better accuracy in reporting. This could even be mandatory for your business to keep up with compliances. Sure, you could have made them manually, but why do things the hard way? 

2. Better driver assessments

Your drivers are one of your most valuable assets and one of your biggest liabilities. This is why you need to do all that you can to improve your assessment process and, if possible, minimize biases. 

The problem with biases is that they’re present even when you’re completely unaware of them, which means they’ll taint your decision-making process. When you digitize it, it all becomes so easy: the number of incidents, average speed, and instances of reckless behavior. A good fleet management software can recognize all of this with ease. 

Also, many biases are plaguing your decision-making and assessment process. One of them is recency bias. This means that you’re giving more credit to events that happened recently compared to those that took place a while back. 

With the help of these tools, you can track their behavior over a long period of time. Sometimes, performance gradually decreases, but it happens so gradually that you don’t even notice it. A tool pays attention to everything. 

Remember that when faced with the consequences of their own reckless behavior behind the wheel, some won’t just accept it. Some of them won’t go down lightly or just accept the punishment. They might argue, go to the HR, and, naturally, accuse you of discrimination. Well, if you have all these reports on your side, you always have the data to back you up.

Finally, you can use all of these findings to improve your system for future tracking and early recognition. You could also use some of this data for future hiring and vetting process. 

3. Protection from internal threats

When it comes to the supply chain, not all threats come from the outside, nor do they happen due to negligence. There are a lot of people acting against their own organization, either for monetary gain or something else entirely. This is why you need to get better at tracking records and analyzing the likelihood of internal threats.

The first issue is equal parts mediation and fighting the problem. You see, figuring out responsibility is one of the best ways to solve issues. If you can solve a problem quickly enough and back it up with data, you can resolve it before people have already dug into their positions, which means that you can solve it before any real resentment kicks in. This way, you can actually salvage your team in the long run. 

Next, digitization can help you keep an eye on inventory much more easily. You can only deliver the items you have or use the available vehicles. Remember that making promises you can’t keep usually comes from either overestimating your inventory or your capability. 

In the past, you had to schedule and inventory and spend so many hours and labor to get it done. This is when you could figure out that something is missing. Now, you can get notifications for every withdrawal from the system and track your inventory in real-time. 

The next benefit of digitizing your system and fully relying on cloud-based systems is that you can set up an account for every single one of your employees and grant or restrict access. This is a huge boost to one’s cybersecurity. 

4. Better predictive maintenance

With the right data, AI-analytical tools, and schedulers, you can actually engage in far better predictive maintenance. This reduces downtime, reduces risks, and saves you a lof of money.

Downtime is expensive, and you need to find a way to keep it to a minimum. Each hour of downtime is a further delay, harming your business’s reputation. Another product is waiting to be loaded and delivered because all your vehicles are taken, and this one vehicle or driver is unexpectedly unavailable (or unavailable for longer). 

Efficient route optimization solutions can significantly enhance predictive maintenance efforts by ensuring vehicles are scheduled for service during downtime or periods of low demand. This integration allows your fleet to run smoothly, with fewer delays due to unscheduled breakdowns. By optimizing delivery routes in real-time, these solutions help balance the workload across available vehicles, preventing overuse of certain vehicles and ensuring that all units are performing at their best. This not only reduces the chances of breakdowns but also optimizes fuel consumption, cuts down on idle time, and lowers operational costs. The combination of route optimization and predictive maintenance ensures a continuous flow of deliveries, even when one vehicle needs attention.

It’s also worth mentioning that it’s not just about your products. It’s much more than that. You see, bad fleet maintenance endangered lives. Brakes that are too slow to respond, a wheel with a few screws loose, and poor electric installations can endanger the lives of your drivers and others in the traffic. This is why better maintenance actively saves the lives of everyone mentioned. 

Bad fleet maintenance costs you more in repairs than regular scheduled repairs and inspections ever could. Keep in mind that just the fact that these repairs are scheduled means that you can plan around them. This alone improves your operative efficiency by a drastic margin.

Not to mention that well-scheduled maintenance could end up improving the lifespan of your vehicles. A worn-out part can wear out the rest of the machinery. Before you know it, you’re looking into a very problematic scenario. 

Unoptimized vehicles are inefficient. They spend more fuel, drive slower, and even have a higher chance of damaging the cargo. So, keeping up with maintenance has a direct impact on the way your feet work. 

5. Better customer support and PR

Overall, the right tool can do wonders for your overall marketing strategy and PR.

First of all, understanding your capacities better can help you make better promises. This means that you’ll never make promises that you can’t keep, which will lead to fewer negative reviews, cashback instances, and an overall higher opinion of your brand.

Through digitization, tracking everything and answering questions will become a lot easier. Now, when a customer calls your customer service, you can tell them exactly where the product is. This level of certainty will speak volumes of your enterprise’s reliability.

Another idea you could enforce is to give customers access to track the GPS of the shipment themselves. A lot of businesses are doing it, and it’s a great incentive to make them register. The majority of vendors avoid insisting on registration since it’s a massive cause of high shopping cart abandonment. 

You will also be able to label your enterprise as greener, which is a cause that many in 2024 care for. After all, you’re reducing your paper use, and by optimizing your routes, you’re causing less pollution.

A lot of businesses are even starting to incorporate electric fleets into the mix, which is another reason to digitize in time. 

Digitization saves money, time, and face of your supply chain

By digitizing, you’ll get a better idea of what’s going on in your business. You’ll understand your assets, your drivers, and your company’s reputation on a much deeper level. Protecting your brand, both from outside and insider threats, will become a much simpler task. If all of this weren’t enough, digitization would be good for your company’s reputation and digital marketing. 

By Srdjan Gombar

Veteran content writer, published author, and amateur boxer. Srdjan has a Bachelor of Arts in English Language & Literature and is passionate about technology, pop culture, and self-improvement. In his free time, he reads, watches movies, and plays Super Mario Bros. with his son.

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