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 organisation, 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 equip logistics professionals with actionable insights to plan, manage, and strategise supply chains effectively. 

Learn more about digital supply chains, how they differ from traditional ones, their benefits, and their risks. Discover 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, optimise performance, and quickly respond to changing conditions. At their core, digital supply chains are powered by data from existing supply chains, which companies store in data warehouses and analyse for actionable insights. 

Research suggests that digital supply chains will grow in the coming years. Allied Market Research predicts that the global digital supply chain market value will reach 13.7 billion USD by 2030, a more than threefold 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, so too does the importance of digital technology and professionals able to 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. In effect, each step involves an assessment and planning process that can throw off the next schedule. 

Digital supply chains utilise data from every stage of a supply chain to plan effectively and develop adaptive responses when delays do arise. Whilst 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 can empower digital ones. 

Supply chain digital transformation: The 5 Cs, 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 one that is connected, collaborative, cyberaware, cognitively enabled, and comprehensive [2].

Called the “five Cs,” this framework asserts that an effective digital supply chain connects to various data sources, is capable of collaborating with other systems, is cybersecure, and is equipped with artificial intelligence (AI) and machine learning to analyse big data. 

Whilst the adoption of digital supply chains has many advantages, it also poses some risks that all logistics professionals should know. Here, learn more about each. 

Benefits 

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

• Increased personalisation: With digital supply chains, logistics companies can segment customers more granularly. As a result, customers may 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 to track and report 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. These help ensure that supply chains function effectively despite continually changing real-world events. 

Risks

As with any transformation, you’ll find some risks inherent as supply chains become increasingly digitised. Two of the most prevalent risks facing digital supply chains today include cybersecurity and lack of preparedness, as detailed below: 

• 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 such as cybersecurity analysts can help defend systems against cyber criminals. 

• Unprepared professionals: According to research conducted by McKinsey & Company, nearly 70 per cent of digital transformation programmes fail to achieve their primary objectives, largely due to employees lacking the skills required to work with new systems [3]. Employers and professionals alike can prepare themselves 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 a wide range of responsibilities. Some of the most common careers include:

• Supply chain analyst

• Supply chain engineer 

• Supply chain manager

• Business analyst

Start working towards your future career 

A career in digital supply chains requires a comprehensive understanding of supply chain management and analytics. A digital supply chain manager has an excellent grasp of logistics, using technology as a leverage. Start your own career journey today by taking a flexible online course through Coursera. 

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