Digital Supply Chains: Definition, Benefits, and Careers

Supply chains stretch worldwide and encompass everything from the sourcing of raw materials to the direct delivery of products to customers. Their complex organization means each supply chain step 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 process step and use data analytics to ensure logistics professionals are equipped with actionable insights to plan, manage, and strategize supply chains effectively. 

In this article, you’ll learn more about digital supply chains, how they differ from traditional ones, their benefits, and their risks. You’ll also learn about 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 leverages digital technologies and data analytics to guide decision-making, optimize performance, and quickly respond to changing conditions. At their core, digital supply chains are powered by the data produced by existing supply chains, which are stored in data warehouses and analyzed for actionable insights. 

Experts expect digital supply chains to grow in the coming years. According to Allied Market Research, for instance, the global digital supply chain market value is projected to reach $13.7 billion by 2030, a more than three-fold increase from its $3.9 billion valuation in 2020 [1]. 

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

Traditional supply chain vs. digital 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. Each step involves an assessment and planning process easily thrown off schedule. 

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

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. 

Researcher Simon Ellis outlines one of the most prominent theories of transforming a traditional supply chain into a “smart” one in a 2020 report published by IDC and sponsored by IBM.  According to Ellis, an effective digital supply chain is connected, collaborative, cyber aware, cognitively enabled, and comprehensive [2]. 

Called the “five C’s,” this framework asserts that an effective digital supply chain is connected 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 adopting digital supply chains has many advantages, it also poses some risks that all logistics professionals should know. Here’s what you need to know about each: 

Benefits 

Digital supply chains give logistics professionals greater control over how they plan, manage, and organize each step of the delivery and manufacturing process. Here are just a few of the benefits of a digital supply chain transformation: 

• 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 to be informed about delays that can take hours, days, or weeks to be reported via traditional supply chains, digital supply chains provide logistics professionals with real-time updates to help them plan and reroute more efficiently. 

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

Risks

As with any transformation, there are some risks that professionals should know as more and more supply chains become increasingly digitized. Here are two of the most prevalent risks facing digital supply chains today: 

• Cybersecurity: Greater data and automation means 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 per cent of digital transformation programs fail to achieve their primary objectives, largely due to employees needing more skills to work with new systems [3]. Employers and professionals should prepare themselves for this digital change with educational courses.  

Digital supply chain careers 

The digital transformation of supply chains means professionals working within the field have many responsibilities. Some of the most common careers and average salaries in Canada include:  

• Supply chain analyst: $62,863 [4]

• Supply chain manager: $81,286 [5]

• Business analyst: $74,338 [6]

Start working towards your future career 

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 supply chain management fundamentals, including logistics, operations, planning, sourcing, and strategy. Meanwhile, Rutgers’ Supply Chain Analytics Specialization prepares logistics professionals to make data-driven decisions to ensure high-performance management, strategic demand planning, and effective logistics systems designs for large-scale distribution systems.