Digital Supply Chains: Definition, Benefits, and Careers

Supply chains span the globe and encompass everything from the sourcing of raw materials to the direct delivery of products to customers. Their complex organisation, though, means that 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 then use data analytics to ensure logistics professionals have actionable insights to plan, manage, and strategise supply chains effectively. Backed by government policies such as the National Logistics Policy (NLP), digital supply chains in India will expand nationwide, offering micro, small, and medium-sized enterprises access to reliable networks for efficient shipping across the country.

Learn more about digital supply chains, how they differ from traditional ones, and their benefits and 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, optimise performance, and quickly respond to changing conditions. The data produced by existing supply chains are stored in data warehouses and analysed for actionable insights and power digital supply chains.

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

Overall, as supply chains become increasingly crucial to the reliable delivery of goods and services, digital technology and professionals able to manage them also become important. 

Traditional supply chain vs digital supply chain: How do they differ? 

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. 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 that can easily disrupt the schedule. 

Digital supply chains use the data produced by every step to plan effectively and create dynamic responses when unforeseen delays arise. While traditional supply chains often lack actionable information, digital ones benefit from real-time big data that enables more efficient transportation and logistics management. 

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. 

In a 2020 report published by IDC and sponsored by IBM, researcher Simon Ellis outlined one of the most prominent theories of transforming a traditional supply chain into a “smart” one. 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 connects to various data sources, is capable of collaborating with other systems, is cyber secure, and is equipped with artificial intelligence (AI) and machine learning to analyse big data. 

While adopting digital supply chains has many advantages but poses some risks. Learn more about each below. 

Benefits 

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

• Increased personalisation: 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 learn about delays that can take hours, days, or even weeks for traditional supply chains to report, 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. These models can ensure that supply chains function effectively despite constantly changing real-world events. 

Risks

As with any transformation,  risks become inevitable as more and more supply chains become increasingly digitised. Two of the most prevalent risks facing digital supply chains today are: 

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

• Unprepared professionals: According to research conducted by McKinsey & Company, nearly 70 percent of global digital transformation programmes fail to achieve their primary objectives, largely because employees lack the skills required to work with new systems [3]. Employers and professionals should prepare for this digital change with educational courses.  

Digital supply chain careers 

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

• Supply chain analyst

• Supply chain engineer 

• Supply chain manager

• Business analyst

Start working toward your future career. 

Digital supply chains are adaptable systems that companies can modify according to real-time supply chain performance. In contrast to traditional supply chains that plan and respond, digital supply chains forecast and advise on actions to enact. A career in digital supply chains requires a comprehensive understanding of supply chain management and analytics. Start your own career journey today by taking a flexible online course on Coursera. 

Rutgers University's Supply Chain Management Specialisation teaches supply chain management fundamentals, including logistics, operations, planning, sourcing, and strategy. Meanwhile, the university’s Supply Chain Analytics Specialisation 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.