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Supply chain

Digitalisation as the crucial element in the global supply chain management process

26.09.20233 min read

A recent study from BDO shows that nearly 50% of C-level executives interviewed across the world state that their supply chains have been severely impacted over the last 18 months. Actually, their second biggest issue is the lack of supply chain transparency in the current conditions. This is especially valid for Europe, where the impact of the Russia-Ukraine war has caused shortages of various goods

Smart manufacturing requires the involvement of many different stakeholders and resources. In times like these, when uncertainty can be extremely high, and the established ways of working become unstable, leaders are trying to create more flexible and connected systems to meet the rapidly changing requirement of clients and to counter market volatility.

This is where digital transformation becomes a crucial element in the process of companies gaining competitive advantage on the global market.

The McKinsey & Company survey of senior supply chain executives by in 2020 proved that the coronavirus pandemic had been a catalyst for further digitalisation of end-to-end supply chain processes

  • An overwhelming majority of survey respondents said they had invested in digital supply chain technologies during the previous year, with most investing more than they originally planned.
  • Although automotive and commodity players, for example, were reluctant to commit to additional investments amid the uncertainty of early 2020, 100% of the respondents in those sectors eventually did so.
  • Also, almost every company had plans for future digital investment.

Why is modern technology a key differentiator in the area of supply chain management? The answer is simple: it offers enormous benefits by strengthening collaboration among all stakeholders and systems.

  • In a globalised world, the success of any organisation is directly linked to the use of modern digital tools, advanced analytics and a connected environment.
  • AI-driven tools deliver real-time solutions to optimise supply chain performance by quickly aggregating data from separate systems and allow for taking full advantage of organisational knowledge.
  • E-supply chain management allows for cost reductions in inventory and improved partner communication.
  • A fully digitalised and integrated system helps evaluate the resilience of a supply chain and its elements, define and benchmark improvement plans while also accounting for possible alternatives that can strengthen the network in the future.

The added value that such increased, well-designed transparency can provide is tremendous, benefitting all nodes of a supply chain, including manufacturers, logistics specialists, and end-users.
Mitsubishi Electric’s digital manufacturing solution, ‘e-F@ctory Alliance’, is an advanced approach which impacts both the supply chain management and engineering chain management systems:

  • It combines information technology and operational technology with acquired know-how to achieve an integrated FA environment that reduces the total cost throughout the entire production process, from design and manufacturing to the finished product and its maintenance.
  • It helps accelerate the improvement cycle for productivity and quality, bringing benefits that many manufacturers strive for, such as shorter delivery times and higher production quality and efficiency as well as the ability to react flexibly to fluctuations in demand.
  • The digital twin technologies enable synchronised digital and real-world production.

    Photo: Getty Images

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Supply chain