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Digital Transformation in the Supply Chain and Logistics Sector

busy dock in a port where large shipping containers are ready to be loaded onto ships

The importance of supply chain and logistics can’t be underestimated – after all, whether we realize it or not, it plays a significant role in our everyday lives. However, the rise of e-commerce, the development of omni-channel and the increase in customer expectations for personalized services, has placed substantial pressure on this industry. And, that’s not to mention the challenges which have arisen since the start of the COVID-19 pandemic.

Together, these substantial changes have highlighted the serious issue of a shortage of manpower in the supply chain and logistics fields. In tandem, the burden on delivery personnel is only increasing as small-lot deliveries become more popular and the truck-load ratio is decreasing – also impacting efficiency. The deterioration of working environments for employees has too already been well-documented as an issue needing to be resolved.

Digitalization will help the supply chain and logistics to make great strides towards solving these problems.

The role of technology in enhancing logistics

Digitalization, IT, and the use of advanced technology will be necessary to handle the ever-increasing volume of logistics accurately and efficiently, as well as to reduce the burden on personnel by promoting automation and labor-saving. This includes proper management of employees' working hours, improving productivity, and optimizing delivery using AI. Total optimization of processes can be achieved by the use of a control tower that centrally manages the entire supply chain, from production to consumption.

Currently, various initiatives for logistics reform are underway. The "Smart Logistics Project", promoted by the Japanese Cabinet Office, has set out to improve profitability by creating new business models and added value through overall supply chain optimization and data utilization.

Through this, it aims to solve the issues of labor shortage and productivity.

Data and digital transformation

Data is the most important and powerful part of digital transformation. Every second, huge amounts of data is generated from applications, devices, sensors, transactions, and behaviors. But accessing and using the right data is the biggest challenge in driving digital transformation projects forward. This is due to supply chain and logistics companies having to deal with a huge number of systems, applications, and data, from both within and outside an organization – much of which is fragmented.

So how is it possible to make all of the relevant data available when it’s needed? The answer lies in data platform technology. This technology needs to offer:

  • Unparalleled real-time event and transaction processing capacity with multi-model support

The ability to handle data from all of the different suppliers, customers, and systems involved in the entire supply chain, as well as the ability to process huge amounts of data, including real-time commodity transaction information and equipment sensor data, at high speed, is essential.

  • Real-time analysis capability

There’s an important need for performing high-speed transaction and event processing, including inventory and order management, packaging and shipping management, and delivery management for all products. At the same time, the platform should also be able to analyze any of the data in real time to gain instant actionable insights and make appropriate decisions. By combining and analyzing real-time internal and external data within the supply chain, organizations will be able to react more quickly to changes. For example, a supply chain constraint event has determined that specific items from an international source will be delayed coming into a Regional Midwest Distribution Center in North America, required to meet a high impact promotion for the weekend. Automated insight into this constraint, will trigger the appropriate replenishment from the most optimal Distribution Center or product re-allocation to enable the required promotional items to be fulfilled on time to meet the promotion.

  • Interoperability

The platform needs to be able to connect, integrate, and harmonize the data from all the different systems involved in the entire supply chain, in a seamless manner, and provide consistent access and visibility, and to manage the entire workflow and utilize all the data. This will help them to gain a real-time understanding of things like appropriate stock levels, ensuring they have the required quantities of specific products needs in store on the shelves and in the required warehouses at any given time.

  • Adoption of the latest technologies such as AI, ML, and NLP

By having a flexible platform that can support such new technologies as a system foundation, a variety of advanced technologies can be utilized. This approach will enable any organization to become more agile, more resilient, and better prepared to respond to unexpected changes in demand faster and with less effort, to operate more efficiently and keep up with evolving consumer behavior.

InterSystems is Powering Supply Chain Technology Around the World

For more than 40 years, InterSystems has been supporting critical, uninterruptible applications used by the world's top logistics companies, including PALTAC, Japan's largest wholesaler of cosmetics, daily necessities, and over-the-counter drugs which delivers 3.5 billion products annually, and MSC (Mediterranean Shipping Company), the world's second largest container shipping company with more than 21 million containers transported annually.

Learn more about our other supply chain and logistics customers to see how InterSystems is helping to power next generation digital transformation projects around the world.

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