Digital Transformation In Supply Chain Management

Digital transformation is a term that is thrown around a lot, and people have different ways to interpret what it means. Essentially, digital transformation is the integration of digital technology into all areas of a business. ARC Advisory Group, where I work, publishes an analysis of the 25 manufacturers with the most mature digital transformations. The report identifies the leaders and highlights best practices. The report takes a holistic approach to what a digital transformation means. “Leading companies take a strategic approach, integrating digital technology throughout their value chains. Design and engineering, production operations, maintenance, logistics, supply chain, business systems, customers, products, and organizational structure are subject to innovative change as companies examine and update processes and deploy new tools and technologies.”

The majority of time when people are discussing digital transformation, they are not directly referring to the digital transformation of supply chains. APQC conducts research on supply chain and logistics to help organizations assess the performance of their own processes and functions compared to their peers. Most recently, the APQC has conducted best practice and benchmarking research on digital transformation. This survey-based research gathers quantitative data as well as information on practices or performance drivers. The final report focuses on the current state of key practices in digital transformation in supply chain management, spread across multiple industries and over 1,100 respondents.

There are many areas of digital transformation within the supply chain. This report provides a cross-industry perspective on digital transformation in logistics including digital maturity in inventory management, transportation, fleet maintenance, safety and compliance, and more.

APQC Digital Transformation in Logistics Results

On average, respondents report allocating 14 percent of their logistics and warehousing annual budget to technology. Of this technology budget, an average of 30 percent is typically allocated to digital transformation. Let’s take a deeper look at a few technology areas.

Inventory Management

Respondents report a wide variety of maturity levels for digital transformation initiatives in inventory management. From a maturity standpoint, the majority of respondents are digitizing data and processes. But, it varies on how the data and processes are being used form a technology standpoint. Ninety-one percent of respondents are digitizing data and processes collectively; but, only 31 percent are using predictive analytics and 26 percent are using artificial intelligence. This means that 29 percent of respondents are digitizing data and processes but not using advanced technology to make the data more actionable. A mere 6 percent of respondents are digitizing data and processes, using predictive analytics or artificial intelligence, and using automation to act on recommendations.

Transportation

For transportation, the numbers are roughly the same as far as maturity within the digital transformation journey. Eighty-eight percent of respondents are digitizing data and processes. Predictive analytics is used significantly more than artificial intelligence to optimize, as 35 percent are using predictive analytics compared to 17 percent for artificial intelligence. For these respondents, only 3 percent are digitizing data and processes, using predictive analytics or artificial intelligence, and using automation to act on recommendations. These numbers show a significant gap around the use of advanced technologies for optimization and decision-making.

Warehouse Equipment / Facility Management

Ninety-two percent of respondents are digitizing data and processes in warehouse equipment / facility management. These numbers are line with the aforementioned technology areas for digital supply chain transformation. Thirty-one percent of respondents are using predictive analytics and 24 percent are using artificial intelligence to optimize. For these respondents, 6 percent are digitizing data and processes, using predictive analytics or artificial intelligence, and using automation to act on recommendations.

Two other issues that come in digital transformation are compliance and safety. Within these areas, respondents are at the low end of the maturity model. For both compliance and safety, nearly one-third of respondents do not have any digital transformation initiatives in place. Additionally, about one-third of respondents have only digitized data and processes in these areas. Very few respondents use artificial intelligence to optimize their data compared to those that use predictive analytics to optimize their digitized data and processes.

Final Thought

The APQC survey gives an interesting look at digital transformation in logistics. Currently, respondents are at the mid-point of the maturity model when it comes to digital transformation initiatives in inventory management, transportation, and warehouse equipment / facility management. However, these respondents are showing that their organizations are on the low end when it comes to compliance and safety. Moving forward, I expect to see more interest, more investments, and more movement in digital transformation in logistics.

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Article resource: https://www.forbes.com/sites/stevebanker/2023/04/09/digital-transformation-in-supply-chain-management/?sh=5772b2083311

Digital Transformation: The Ultimate Customer Experience Overhaul

Fifty-three percent of early digital adopters say customer experiences have become a priority for their organizations over the past 12 months. This figure rises to a whopping 93% for advanced digital adopters, according to a 2023 study conducted by Foundry, an IDG, Inc. Company. This survey highlights customer-centricity as a key approach to a successful digital revolution.

Bringing out the importance of putting the customer at the center of any digital transformation strategy, Jeff Bezos once said, “There are many ways to center a business. You can be competitor focused, you can be product focused, you can be technology focused, you can be business model focused, and there are more. But in my view, obsessive customer focus is by far the most protective of day-one vitality.”

So how does digital transformation impact the customer experience?

By Offering A Hyperpersonalized Experience

Customers now expect brands to understand their needs and provide a more tailored experience. AI and machine learning can help make sense of the data shared by customers and allow for every customer interaction to be unique and personal.

Epsilon research (via TechCrunch) also indicated that 80% of consumers are more likely to make a purchase when brands offer personalized experiences.

Not just this, when brands get personalization right, marketing spending can deliver five to eight times the ROI and lift sales by 10% or more, according to McKinsey.

Three Ways To Implement Personalization Using AI

1. Analyze customer data: Since the standard CRM captures limited data and static buyer personas are too generic, AI uses the (vast) collected data and makes sense of it to get individual personalization right. Be it real-time location, context, behavior or values, AI works on critical customer variables and helps marketers understand what to offer, when and where.

2. Exclude data paralysis: Marketers have access to overwhelming sets of data. AI can help in this pursuit by collecting data that will continually evolve and adapt, helping marketers implement a more effective personalization strategy that delivers results.

3. Create evolving customer profiles: Using AI to create and target unique customer profiles can provide unique customer experiences. This way, each customer’s unique preferences will be catered to, leading to more successful campaigns.

By Establishing Omnichannel Functionalities

Businesses can tailor their messaging and promotions more effectively by offering a consistent customer experience across all channels.

The same is supported by a Forrester study that says that the companies with the strongest omnichannel customer engagement strategies enjoy a 10% Y-O-Y growth, a 10% increase in average order value and a 25% increase in close rates.

An omnichannel experience is made of three essential components: always available, consistent and personalized. So how can businesses provide an omnichannel experience to their customers?

Steps to Provide An Omnichannel Experience

• Define strategy and customer touchpoints: Have a clear plan in place with objectives, target audience, success metrics and adaptation. Identify customer touchpoints and pain points across all channels to upgrade the experience.

• Implement integrated technology: Invest in an integrated software architecture (omnichannel desktop, back-end interfaces and advanced analytics). This can include integrating your point-of-sale systems, customer relationship management tools and customer-facing platforms, among other tools.

• Get feedback and improvise: Employ platforms that use AI and advanced analytics to simplify heaps of customer feedback and customer-journey breakpoints. Monitor this and adjust your approach based on their needs and preferences.

By Providing Seamless Customer Support

Right from chatbots that lead to increased response time and reduced repetitive queries to decoding customer behavior and purchasing patterns, AI is the key to enabling real-time service for customer support platforms.

AI chatbots improve the customer experience by offering:

• Personalized conversation using stored data: AI chatbots can personalize their responses based on stored customer data, such as their purchase history and previous communication.

• Speedy and effective resolutions: AI chatbots can provide 24/7 support, personalized responses, faster response times, consistency, reduced errors, data collection and analysis, cost savings and increased customer satisfaction, loyalty and advocacy.

By Gathering Customer Feedback For Continuous Improvement

In today’s tech-driven world, traditional quantitative feedback-gathering methods are losing their importance. Reality demands companies leverage AI and machine learning to enhance their survey-forming and survey-analyzing efficiency.

While there are many ways to gather customer feedback via AI, the three most common approaches are as follows.

Three Ways To Gather Customer Feedback

1. Feedback tools: Use tools that empower AI to capture and analyze specialized vocabulary used by customers in answering feedback questions. The deep insights shared by AI can help marketers plan their customer satisfaction and retention strategies.

2. Automated forms: Automated forms are another effective way to gather customer feedback without disturbing the customer journey. The process can even be automated by telling the tools/AI processes when to shoot an email/SMS with the feedback form.

3. Customer surveys: While focus groups and personal interviews are still in vogue, customer surveys rolled out in bulk can work equally well. That is if AI is integrated to make sense of the answers, giving marketers insightful gleams into the customers’ needs and wants.

Conclusion

Digital transformation is key to maximizing customer experience in today's world. In the words of Mckinsey’s senior partner Tjark Freundt, “Effective customer-experience transformations require a clear vision and a customer-centric, ambitious articulation of goals.” This can be achieved with companies using AI-produced insights to see not just where customer problems are but what’s causing them and how they can be solved. And figures say that companies earning $1 billion a year earn an additional $700 million over three years by investing in customer experience.

Looking to hire skilled software developers? Contact TP&P Technology - Leading Software Outsourcing Company in Vietnam Today

Article resource: https://www.forbes.com/sites/forbestechcouncil/2023/05/31/digital-transformation-the-ultimate-customer-experience-overhaul/?sh=2001056d4254