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How Digital Transformation and Asset Tracking Can Mitigate Risks

In the News

Supply & Demand Chain Executive – by Boris Khazin

How Digital Transformation and Asset Tracking Can Mitigate Risks

In previous decades, supply chain managers focused on managing the flow of materials and resources through different processes as they became finished goods and were finally delivered to the end customer. These past eras, marked by stability and predictability, have recently given way to a new emphasis on increased risk, regulatory changes and economic, societal and geopolitical shocks. Initially, managers did not have the tools and information to respond adequately to sudden disruptions. As a result, global supply chain networks continue to undergo digital transformation to overcome these new challenges, implementing asset-tracking solutions and adopting Industry 4.0 technology, including artificial intelligence (AI), machine learning (ML) and the Internet of Things (IoT).

Digital Transformation in the Supply Chain

Generally, digital transformation describes the process of changing how an enterprise operates at a fundamental level by incorporating digital technologies across all areas of a business. Concerning the supply chain, digital transformation is similar in that it involves inserting digital capabilities into every aspect of the supply chain to enhance everything from customer service and productivity to cross-departmental collaboration and decision-making.

Historically, there wasn’t a pressing need for digital transformation; likewise, enterprises took the logistics links connecting distinct parts of global supply chains for granted. Predictable costs and performance for all the standard transportation methods (ocean, air, train and truck) meant firms could confidently build geographically distributed supply chains leveraging cost or scale advantages of Asian manufacturing. Nevertheless, the pandemic, new regulations and incidents, such as the Suez Canal closing, have challenged the validity of these assumptions, highlighting the need for digital capabilities that allow for rapid responses to developing issues through real-time information – especially when vast distances are involved.

By implementing technologies like IoT sensors and devices throughout the supply chain and connecting them to an IoT device management platform, managers gain access to real-time insights.

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