What is Digital Supply Chain

The digital supply chain is a process of networking between individuals and organizations involved in a business deal that is initiated in a paperless environment, using web-enabled capabilities. Whereas a supply chain is the simple networking between all individuals, organization, and activities involved in a business process from the manufacturer to the end user. Precisely a supply chain is a set of two or more individuals or organizations directly involved in selling or buying services, products, information from a source to a buyer. The whole process done with the aid of digital technology is termed as digital supply chain. Digital supply chain integration is being used more widely in today’s world. 

The foremost aim of the digital supply chain is to deliver insights to increase efficiency and to produce higher profits for the organization. It involves managing a series of activities that are connected with coordinating, controlling and planning the movement of raw materials, goods and parts from the supplier to consumer. During the process financial, material and information flows are managed and controlled as decisions are made at tactical, strategic and operational levels throughout the supply chain.

Organizations having a digital supply chain are able to move assets, people, and resources to where they are required at any time. This results in being cost effective by planning ahead of the transportation and manufacturing risks. They can save a huge amount of money in multiple areas like resources, time and transportation. The latest technologies like radio frequency identification (RFID), global positioning system (GPS) tracking, smart labels, and barcodes and so on play a vital role in the digital supply chain. Furthermore, by integrating cloud technologies with web services, digital supply chain becomes more advanced and efficient since it aids to unify information and facilitates to create trading-partner visibility. When the system is fully automated, the manual data entry can be eliminated and that, in turn, will reduce human error.

The two terms closely related to the digital supply chain are digitalization and digitization. Digitalization can be broadly classified as a term that refers to the integration, collaboration, and connectivity between business partners using the digital medium for the entire process from planning to designing. Precisely digitalization automates all the tasks and processes that take place.

Digitization, on the other hand, means to convert a physically manufactured goods into a digital product. For example when the hard copy of a book is converted into an e-content. Digitization can also mean using GPS systems or sensors to monitor goods with the help of internet of things (IoT) and other innovative technology. Unlike digitalization, digitization literally converts the products  

Among the many benefits of the digital supply chain, the most important one is the cost effectiveness of the services and the value-added services. The key factor of supply chain integration is its ability associated with minimizing governance costs, which include the cost of exchange with other organization and with those within the firm. The system improves collaboration between business partners since data visualization tools will help to make changes in both physical and digital characteristic of the supply chain.