What you need to know about digital supply chain

At the present, no company can not talk about productivity and processes improvement without technology. With this, organizations not only increase their efficiency but also get better information about their practices and the industry they are. Besides, technology and digital opportunities are levering and supporting in an excellent way the production and supply chain management performance. Here is where we can talk about the digital supply chain, which is a new trend to create and establish a new digital environment between partners, providers, and customers to execute coordinated processes.

Digital supply chain

Before we define this important concept, we must understand that currently almost all businesses are working in a digital environment, so companies must join this in every process, taking advantage of what technology offers. In other words, organizations can not have technology only in some processes, but they must couple it in all their procedures to get all the potential given by it. Having this clear, now we can talk about the concept of Digital supply chain and its participation in the supply chain management with its benefits for businesses.

The concept of Digital supply chain refers to the process for companies to deliver and distribute digital elements from the provider to customers. Put differently, it is the way how companies send their digital products to multiple clients through electronic means. This disruptive and innovative way of providing customers lets them acquire what they need in any place and at any time.

In today’s’ world, where the economy is increasingly connected, companies must take advantage of these digital means, structuring their processes and the supply chain management techniques to electronic ones. Digital supply chain not only gives speed and immediacy to clients but also adds value, establishing competitive advantages for organizations over their competitors.

The digital supply chain further seeks to increase productivity and efficiency through the insights it generates, helping businesses to see what they have to improve and eliminate from their processes. Besides, organizations implementing a digital supply chain can get information in a better way of their inventories and assets, letting them reduce costs and enhance their resources.

Another vital element in the digital supply chain is the real time tracking. In a digital environment, companies can measure everything, due to the immediate data and information generated by these technologies.

Digital supply chain components

Like a traditional supply chain, a digital supply chain has some components for its processes and methods.

  • Provider: this is who produces the content to be distributed and acquired for the consumers in multiple digital formats. The provider could be inside the company who sells the product or it could be outside.

The content generated by the provider can need some adjustments like the size or the quality, so it must pass through a capture or compression process, producing what customers need and want.

  • Digital Asset Management: this is a vital key in a digital supply chain because here is where companies set the selling features of the product to be delivered. In other words, here is where manufacturers take the digital product and establish how it will be distributed, in what formats, the price, among other things that can determinate the success or failure of it.
  • Digital Rights Management: through this component, businesses shield their products against piracy. Put differently, is the way how companies protect what they sell against illegal distribution.
  • Content Delivery Network: once the product is ready for its digital distribution, the company must establish the hosting and delivery network, that is to say, where the product will be hosted and the electronic means for its distribution to customers. This is also known as the CDN or the Digital Supply Network (DSN).
  • Storefront: this component is where customers see the product to be bought. Here, clients know the merchandise and its qualities, having the possibility to purchase it. The storefront must be implemented in all the electronic devices where customers can obtain the company products, like smartphones, tablets or PC’s.
  • Digital marketing: through this element, companies can promote their products in the digital environment. Digital marketing is the perfect channel to let customers know a specific product because they will be in the same ecosystem. Platforms like social networks, SEO, SEM, email marketing and other elements, help companies to show their products to possible buyers inside the same universe.
Image courtesy of negativespace.co at Pexels.com

Digital supply chain is a reality that all companies must adopt, not only for the benefits, insights, costs reducing and procedures improvement it brings but for being part of the new economy, where digital elements are ruling the market and making customers stricter. This could be a difficult step for companies to take, due to the hard changes it demands in their procedures and methods, but in the long term is the correct approach, because is what buyers and world’s’ economy are requesting.

Related: Why is customer service important in the supply chain? by David Kiger


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