Digital Supply Chains: Definition, Benefits, and Careers

Supply chains stretch across the world and encompass everything from the sourcing of raw materials to the direct delivery of products to customers. Their complex organization, though, means that each step of the supply chain must function properly for shipments to meet their deadlines. 

That’s where digital supply chains come in. Digital supply chains leverage digital technologies to capture big data produced by each step of the process and then use data analytics to ensure that logistics professionals gain the actionable insights needed to plan, manage, and strategize supply chains effectively. 

Learn more about digital supply chains, how they differ from traditional ones, their benefits, and their risks. You’ll also discover some of the theories underlying supply chain digital transformations and explore courses that can help you start your career journey today. 

What is a digital supply chain? 

A digital supply chain is a supply chain that leverages digital technologies and data analytics to guide decision-making, optimize performance, and quickly respond to changing conditions. At their core, the data produced by existing supply chains, which is stored in data warehouses and analyzed for actionable insights, powers digital supply chains. 

Digital supply chains will likely grow in the coming years. For instance, Allied Market Research projects the global digital supply chain market value will reach $13.67 billion by 2030 [1]. 

Overall, as supply chains become increasingly crucial to the reliable delivery of goods and services, so too does the importance of digital technology and the professionals able to manage them. 

What is a digital supply chain vs. a traditional supply chain 

Traditional supply chains rely on the linear progress of goods and services from sourcing materials to manufacturing, distribution, and then to the point of sale. Unfortunately, as each step of the supply chain relies on the step before it, delays at one point can create costly delays in another. In effect, each step involves an assessment and planning process that disruptions can easily throw off schedule. 

Digital supply chains use the data produced by every step of a supply chain to plan effectively and create dynamic responses when unforeseen delays arise. While traditional supply chains can experience lags from a lack of actionable information, a stream of real-time big data that enables more efficiently managed transportation and logistics empowers digital supply chains. 

Supply chain digital transformation: the 5Cs, benefits, and risks

The digital transformation of supply chains seeks to turn them into semi-autonomous “smart” systems capable of quickly building strategies. 

One of the most prominent theories of transforming a traditional supply chain into a “smart” one, as outlined by researcher Simon Ellis. According to Ellis, the hallmarks of an effective digital supply chain include its status as connected, collaborative, cyber aware, cognitively enabled, and comprehensive.

Called the “five C’s,” this framework asserts that an effective digital supply chain connects to various data sources, capable of collaborating with other systems, cyber secure, and equipped with artificial intelligence (AI) and machine learning to analyze big data. 

While the adoption of digital supply chains has many advantages, it also poses some risks that all logistics professionals should know. Explore both the benefits and challenges of a digital supply chain. 

Benefits of supply chain technology

Digital supply chains allow logistics professionals to have greater control over how they plan, manage, and organize each step of the delivery and manufacturing process. A few of the benefits of a digital supply chain transformation include: 

• Increased personalization: Digital supply chains allow logistics companies to segment customers more granularly. As a result, customers can pick delivery options that work better for them. 

• Greater flexibility: Rather than waiting for information about delays that can take hours, days, or even weeks to receive reports about via traditional supply chains, digital supply chains provide logistics professionals with real-time updates that can help them plan and reroute more efficiently. 

• Improved planning: Logistics professionals can use predictive analytics to create more accurate forecasting models. You can use these models to ensure that supply chains function effectively despite constantly changing real-world events. 

Risks of supply chain technology

As with any transformation, you should be aware of some risks as more and more supply chains become increasingly digitized. Two of the most prevalent risks facing digital supply chains today are: 

• Cybersecurity: Greater amounts of data and automation mean that digital supply chains are susceptible to outside attacks that can compromise systems and user data. However, professionals like cybersecurity analysts can help prepare systems against cyber criminals. 

• Unprepared professionals: According to research conducted by McKinsey & Company, nearly 70 percent of digital transformation programs fail to achieve their primary objectives, largely due to employees lacking the skills required to work with new systems [2]. Employers and professionals alike should prepare themselves for this digital change with educational courses.  

AI in supply chains

You can use artificial intelligence to help manage your supply chain. AI can help streamline workflows and automate tasks like inventory levels, trends, and creating documentation. By using AI, you may be able to lower costs, cut down on waste, and make better decisions. 

Digital supply chain careers 

The digital transformation of supply chains means that professionals working within the field have a wide range of responsibilities. Some of the most common careers include:

• Supply chain analyst

• Supply chain engineer 

• Supply chain manager

• Business analyst

Learn more about digital supply chains on Coursera

A career in digital supply chains requires a comprehensive understanding of supply chain management and analytics. Start your career journey today by taking a flexible online course through Coursera. 

Rutgers University's Supply Chain Management Specialization teaches the fundamentals of supply chain management, including logistics, operations, planning, sourcing, and strategy. Their Supply Chain Analytics Specialization, meanwhile, can help you develop proficiency in making data-driven decisions to ensure high-performance management, strategic demand planning, and effective logistics systems designs for large-scale distribution systems.