The challenges of a digitized supply chain

The challenges for the supply chain

The supply chain is undergoing major changes as processes become digitized and the expectations of consumers and business partners change. What are the issues and challenges that this department faces in each company? We provide explanations in this article.

What is the supply chain?

Lets discuss the management of the supply chain, the backbone of a companys proper functioning. Managing tasks, information flows and product flows is the key to ensuring complete control of supply and production. This is essential if organisations are to meet delivery times and control production costs.

The supply chain starts with the raw materials used to manufacture the final goods, and includes supply tasks, supplier relationships, transport, storage and handling. Companies that are able to properly manage and optimize these processes are the most competitive in their market, and able to ensure their own sustainability.

What challenges need to be addressed by companies?

In the next five years, the vast majority of companies will improve collaboration between their teams and their partners through the exchange of real-time business information. For this, they will automate processes and accelerate exchanges within the supply chain.

Consumers are looking for greater customization in the products they buy. This implies shorter lifecycles and transfers measures of competitiveness to the logistics itself. Indeed, companies that stand out are those that are able to automate, act in real time, and increase responsiveness.

Whether B2B or B2C, ensuring the optimal conditions for the production and delivery of products requires the use of new digital tools:

- B2C issues revolve around delivery, with the last mile posing a problem in terms of cost. Companies in this sector must work to break the silos of their organisation, share data between services, and merge inventories dedicated to online sales with those of physical sales to be able to meet demand. This requires the use of reliable, responsive and instantaneous communication channels.

- B2B challenges, meanwhile, are related to the shorter delivery times that have a direct impact on order processing. The supply chain is gradually expanding, integrating the organisation of the supplier with their ecosystem. Once again, exchanges between suppliers and resellers are essential, and responsiveness is the key to success. A high level of responsiveness will prevent supply disruptions and anticipate delays by improving overall communication between the parties.

Compliance with legal requirements, increasingly complex in the context of commercial transactions, can also be a brake on this digital transformation. Commercial transactions are becoming more international, and for companies operating in several countries, compliance with all electronic invoicing is a project in its own right.

How to start the digitization shift?

To deal with digitization and address the supply chain challenges, companies need to build solid ecosystems based on some strong principles.

The responsiveness of commercial transactions is therefore a major area of improvement, but the reduction of costs related to these is just as important.

The implementation of electronic invoicing and electronic data interchange (EDI) between business partners are among the responses to the problems encountered.

Some areas of improvement:

- Expenses related to processing invoices and other commercial documents such as orders or delivery notes must be drastically reduced. The digitization of these exchanges raises responsiveness between business partners.

- The cost of processing these exchanges is an important element to take into account. In a world that is constantly looking for savings, adopting e-invoicing is a real competitive advantage.

- Warehouses need to be redesigned to enhance automation and provide new, more personalized consumer services. The aim of this is to bring greater added value. Frequent provision of inventory reports to customers and suppliers makes it possible to anticipate potential disruptions and address them proactively.

- The classic warehouse-store layout must be overhauled in order to optimize inventory management. Reducing the cost of the last mile involves turning every point of sale into a place of storage to prepare or ship an order. A brand’s retail store network can thereby present better geographic coverage. Once again, the availability of stock information helps to address these issues.

- The supply chain must extend upstream to downstream, exceeding warehouse boundaries to provide 360° visibility of order flow. Automatically acknowledging the receipt of a new order or a delivery notice provides valuable information that can be presented to end customers, providing greatly sought after visibility.

And wheres the EDI in all of this?

Electronic data interchange (EDI) is the paperless and automated exchange of messages with standardized content between several business partners. Most of the time, this information represents the electronic equivalent of commercial, financial and paper logistics documents such as orders, invoices or shipping confirmations. Processing these documents using EDI rather than paper, email or fax makes the transaction more reliable and speeds up processing times.

Today, EDI transactions are essential for companies. They are among the solutions that allow them to respond to the numerous challenges they must face.

About Arnaud François

Arnaud François has been a Pre-Sales Engineer for more than five years, since graduating from the IMT Lille school with an Engineering degree in IT and telecommunications. He has been responsible for the French market, specializing in EDI, e-invoicing and master data management systems at Comarch since 2017.

About Comarch E-Invoicing

Comarch E-Invoicing is one of the Comarch brands, which provides cutting-edge technology, allowing the enterprises to automate the supply chain and invoicing processes. A comprehensive approach to both internal and external cloud-based collaboration with all partners (suppliers, customers, logistics operators, and service providers), including the exchange of product, merchandising, analitical, logistic and financial data, delivers the best results. Consequently, companies are provided with access to reliable data, optimisation of processes with Robotic Process Automation, and lower document handling costs.