Sep 01, 2016

Technology and its benefits to Supply Chain

Improving overall efficiency is the next move for all supply chain management experts/organizations. New technology is changing the way businesses manage their supply chains. Logistic viewpoints states that social media networks are now helping as regards improving the transparency of their distribution channels. Technology has not just been able to help companies boost performance, coordinate purchases but has also been able to centralize inventory through a digital warehouse management system. Supply chain management companies employing technology solutions to their portfolio have been able to improve tremendously as regards market analysis, identifying trends and adjust order fulfillment strategies to provide better customer service.

Customer service in itself is more of a facilitator of the supply chain process. Basically, in the past, customer service wasn’t done the way it is today. Back then, organizations cared more about the customers than the product itself. Comments such as “Welcome to our establishment” wasn’t far from ear. Sales associates would do all they could to help you, they would help the customer in anyway especially when it’s about some difficulty caused by the organization itself. Businesses in past were built on customer service foundations and they flourished as a result of the fact that they kept their clients/customers first before the product.

According to Chuck Intrieri, “…today we ‘talk’ about customer service, but really displaying genuine customer service in the supply chain is lacking”. Today, people tend to feel it’s extra work to please the customer. In respect to this, several strategies should be put in place in order to ensure that customers can air their views and technology has been able to offer solutions to this problem. Organizations now have chat forums between them and their customers, where customers can report problems online and be attended to in just seconds. Organizations are also imbibing Customer Relationship Management (CRM) which is a business strategy that enables; understanding your customer, retain customers through better customer experience, attract new customers, win new clients and contracts, increase profitability and decrease customer management costs.

Prior to the introduction of technology into supply chain management, information flow between supply chain member organizations were paper based. Communication at this point was very low and also ambiguous as it was looked at as a critical competitive resource because its value to supply chain members was not clearly understood. However, with the inception of information communication technology, it is possible to provide competitive positioning of business initiative like cycle time reduction and implementing redesigned cross-functional processes. Three factors have strongly impacted change in the importance of information technology and they include; satisfying/pleasing customers, serving customers the best way and information playing an important role in strategic planning, which helps managers reduce inventory and human resource requirement to a competitive level.

Technology has been able to find its way round Supply Chain Management (SCM) step by step, starting with electronic invoicing, computerized shipping, and tracking and automated notifications which was advanced by UPS and FedEx. These advances in technology have been able to curb certain supply chain loop holes such as inability to notify a client about delivery, or even proof of delivery. Supply chain companies are now adopting new technologies into the system in order to help improve the quality of services they render to customers. Customers are now demanding as ever, they want to know the latest solution you are offering to them immediately they make a purchase.

Use of technology in areas of e-commerce, trading products and services isn’t something new to the supply chain industry. Electronic commerce draws on technologies such as mobile commerce, electronic funds transfer, supply chain management, internet marketing, online transaction processing, and electronic data interchange. These new technologies have not just been able to help the supply chain industry, it has helped in providing security to a whole lot of transactions that would have been marred as a result of lack of technology. Electronic Funds Transfer (EFT) allows for making and receiving payments, cost savings and convenience as well on both ends (Orgnaization and Client). Companies that also receive payment through EFT enjoy cash-flow advantages because they are assured that payments will be made automatically on the date they’re due rather than having to clear checks.

Having served as a common denominator in diverse fields of life. Technology has become so integrated into our daily lives and it seems impossible to do without one technological gadget or software to help make life or work easier for ourselves. In respect to this, there are four ways technology has been transforming the supply chain industry and they include;

1. IT leadership meets operations

Businesses across the world now recognize the need for technology to be incorporated into their systems and as such new positions tend to be added to address the growing need of such expertise. However, some organization are opting to add more knowledge on the subject to use in supply chains, with former chief information officers being promoted to senior operations/procurement positions. If any organization is to grow, it’s absolutely not without doubt that technology needs to find attachment to its operations. Reason being that, it will help evade loops holes as well as provide solutions to pending problems that may seem ambiguous.

2. Tech-Assisted Transparency

An overview of the entire Supply Chain makes it possible for companies to have a sense of control over their business. Take for example companies that are into freight management. Naturally, they should provide an overview for their customers to have a chance of seeing what happens right from the start of the process till it gets to the customer. The customer should be able to see his/her consignment from point of departure to the point to delivery. But on the other hand, companies should have a way of optimizing their freight operations such that processes are well tuned. There’s a reduction of time wasted in documentation and fines incurred experienced. There are different applications that have been created in order to give companies process control over freight activities. One of such is Proof of Delivery by (P.O.D) Delivery Science.

3. Keeping a competitive edge

Technology is already important in and for supply chain companies and it’s only going to get more integrated as time goes on because for any company to actually stay ahead of its competitors it needs to be very innovative. Take for example, if a company is known to be releasing a latest version of its software, its competitors doing similarly, even if they are richer and bigger will be considered as copycats. It is however important that as a supply chain management company, there’s a need for the maintenance of competitive edge between other organizations.

4. Tighter Communication and Community

Managers are always on the move but then, improved communication can help keep them in tune with current happenings in the supply chain. With the help of software applications such as Slack, WhatsApp and other communication platform one can easily communicate what’s happening in the field to the management and in turn if there’s a problem it can be addressed with immediate effect. Higher customer satisfaction can be attained through communication aids in product tracking and delivery.

In having a broader knowledge about technology and its benefits to the supply chain industry, we also need to ask ourselves what’s causing the shift to greater use of technology in supply chain functions. Some of these causes include:

Consumers Demand More Now

The rise in consumer demand is rising by the minutes, consumers now want to know what you are offering them and how beneficial what you are offering them can be to their businesses. Prior to the rise of technological advancement in information and communication technology, internet and other fields, customers were not as vociferous as they are now. Today, supply chain entities need to have any product available at any place at any time, reason being that, it seems impossible yet. However, more supply chain entities have learned how to leverage consumer demand against supply chain efficiency. Supply chain managers now understand that a mere delay can cause customer dissatisfaction which in turn can lead to loss of profit for the supply chain.


With no further deviation, technology has been able to help automate global trade, supply relationship management, reverse logistics, supply chain execution and also supply chain management. Without further ado, execution of these processes cannot be effective/efficient without technology and as such supply chain companies are to take technology not only into consideration but as an imperative to success. Technology is important and if paid attention to properly supply chain managers are bound to achieve the best of it. Technology has proven itself in avoiding loop holes in; reverse logistics, supply chain execution, and also supply relationship management.