The term “supply chain” refers to a set of organizations, people, activities, information, and resources necessary to transfer a product or service from the supplier to the final customer.
The advent of digital technologies has imposed a new way for companies to relate to those both outside and within their organization. To produce goods or services, a company uses a set of technical resources to service the needs of human resources. These resources relate to each other thanks to the supply chain, making use of the means of communication and transmission.
The various WIP are transferred among the various departments of the factory for due processing. The workers, following the procurement of raw materials, build or assemble WIP to create the finished product. All of this is part of the physical flow of the products, which starts with the supplier and reaches the end customer. However, we must not overlook the information flow during this process, which moves in the opposite direction to the physical flow and includes any exchange of data necessary for the execution of the order.
In the past, the information flow generated by these activities was mainly managed by people who wrote or read the data that would then be aggregated for statistics. Today, the Internet of Things (IoT) allows us to obtain a wholly creative flow: information is exchanged directly by objects without human intermediation. A workpiece communicates directly with the machine, which then transmits the data to the computer.
Here comes the importance of grafting new emerging digital technologies into the processes that drive the supply chain. Supply chain processes are strongly affected by digital transformation. The ultimate goal of digital transformation in this field is to create largely autonomous supply chains, with the ability to regulate themselves and decide how to react to events and changes.
A key factor in this perspective is the systematic implementation of Artificial Intelligence in the supply chain. This is due to its wide applicability, and its ability to proactively deal with complex business problems along the entire chain.
In fact, this technology makes it possible to exploit the value of data, and simultaneously highlights any critical issues present along the chain before they occur. It will also recommend prescriptive actions for a smarter and more agile supply chain.
Going deep into an analysis of the impact of Artificial Intelligence in business production processes, we can include the ability to optimize stocks by increasing the accuracy of reordering policies; the predictive distribution to improve demand production planning; the automation of daily operations decisions; and finally cost reduction.
Amongst the other technologies that play a fundamental role in supply chain innovation (and consequently in its optimization) there are also cognitive analyses. They will have a disruptive impact on problem-solving in the coming years. Furthermore, there are the so-called digital twins – the digital representations of physical products that allow increasingly more advanced product customization, and blockchain technology, whose potential seems to present a growing enthusiasm in supply chain managers.
As can be seen, the advantages of supply chain processes grafted with emerging technologies are manifold. Therefore, in a world that is advancing rapidly towards the new progress of Digital Transformation and in a market where the end customer has more and more choices, it is essential for companies to invest in supply chain innovation to stay competitive.
