Digital transformation of logistics in Saudi Arabia
Supply chain managers in almost every industry worldwide are under greater scrutiny now because of various issues, such as new legislation regarding human rights and supply chain sustainability, inflation, shifting consumer preferences, and a shortage of commodities. Companies must know more than just what their customers and suppliers do. They need a thorough, current understanding of the suppliers’ suppliers and the suppliers’ customers. Through digital transformation, digital technologies are integrated into every aspect of an organization, enhancing management and providing value to customers. This entails applying cutting-edge technology, such as advanced data analysis that reveals supplier and customer trends and behaviors, robotics, artificial intelligence, and the Internet of Things (IoT). Included are applications that automate hiring, accounting, and supply chain procedures.
As part of its digital transformation, a manufacturing company may choose to move from manual data entry and Excel spreadsheets to a cloud-based finance system. From now on, it may begin investigating analytics solutions that leverage data collected from the manufacturing floor and other points in the supply chain to offer insights and improve processes. However, digital transformation is more than just acquiring and applying new technologies. It also involves a change in the organization’s culture, where managers are expected to assess every aspect of their business, including the markets they service, the employees they choose, and their relationships with suppliers and customers. Let’s discuss it in more detail.
Advancement in the Logistics Industry
Except for the tiniest ones, all firms use technology for supply chain planning and execution. Surprisingly, a lot of logistics managers still carry out manual tasks like delivering paperwork and calling suppliers to inquire about delivery information. Early efforts to digitize supply chain operations focused on combining data from accounting applications with data from organizing, warehouse management, and other relevant systems to achieve timely delivery and distribution of items at the lowest practical cost. The drawbacks of earlier technologies were their inability to foresee supply chain interruptions, identify the underlying causes of issues, and integrate more cross-functional data, such as inventory, order, and shipment data. Supply chain management systems of the future will integrate data from the entire extended enterprise, including the financial department. The next generation of supply chain management software will combine information from the whole company business, including finance, inventories, outside suppliers, and customers, to increase productivity and cut expenses.
Supply Chain Digital Transformation
Supplier chain digital transformation integrates electronic devices, technologies, and methodologies to raise productivity and optimize each component of the supplier ecosystem. Optimizing resource flow is the primary goal of supply chain management (SCM), which begins with acquiring raw materials and concludes with delivering completed items to customers. To transform supply chains digitally, companies need to abandon the linear chain concept and adopt a linked strategy. Factories can obtain real-time visibility into their supply chains by utilizing digital transformation to collect, share, and assess data at each process phase—including demand forecasting, asset control, warehouse management, logistics and shipping management, purchasing, and order delivery. To maximize the benefits of newly introduced technology, businesses must guarantee that employees can execute and operate the newest supply chain technology. Improving fewer tech-savvy staff members and hiring additional staff members might be necessary.
Digital transformation in logistics
Digitally transformed supply chains facilitate the estimation of demand, the identification of challenges, and the reduction of lead times. On the other hand, logistics executives can still plan and react in traditional supply chains. The goal is to ensure on-time delivery, improve customer service, and reduce costs by increasing efficiency, openness, and collaboration. When manufacturers decide to digitize their supply chains, they need to have a great plan in place. This plan should include staff recruitment or retraining, as well as assessment and, if necessary, reorganization for the new roles that the transition to digital logistics brings about.
Increasing the supply chain’s visibility must be the priority in any digital transformation strategy. Doing this will make it more transparent which components of the present supply chain will benefit most from improved workflow and technology advancements. For instance, implementing real-time tracking and monitoring systems provides information about the movement of goods. At the same time, Internet of Things (IoT) sensors collect data on humidity, stock levels, and other relevant variables. Using demand forecasting and planning software, planners can integrate past and present sales data with client goals, industry trends, and other criteria. Shippers can expedite delivery and reduce transportation expenses by using software for optimal routing.
The company’s management must first determine its evolutionary goals, after which it must prioritize the methods and approaches that will enable it to reach those goals. Starting with head initiatives reduces risk and provides opportunities for small-scale adaptation programs, enabling employees to learn about and familiarize themselves with emerging technologies that could be important for their everyday work.
