Overview of the Digital Supply Chain
Figure 1. (Hitachi, Ltd., 2020) The concept of the digital supply chain has emerged as a transformative force within the field of supply chain management. By leveraging advanced technologies, this approach seeks to improve operational efficiency, visibility, and responsiveness. In response to the rise of digitalization, organizations from various industries are increasingly adopting digital supply chain strategies to gain a competitive advantage in the global marketplace. This section presents a comprehensive overview of the digital supply chain, encompassing its key components, benefits, and challenges. The information is drawn from a synthesis of scholarly research and industry reports. At its core, the digital supply chain involves the integration of various digital technologies into traditional supply chain processes. These technologies include artificial intelligence (AI), big data analytics, the Internet of Things (IoT), cloud computing, and blockchain. By incorporating these advancements, the digital supply chain enables the efficient collection, analysis, and utilization of vast amounts of data. This data-driven approach facilitates real-time decision-making, predictive analytics, and automation, thereby driving improvements in overall supply chain performance (Gaur et al 2022). According to a study conducted by Garay-Rondero et al. (2019), organizations that successfully implement digital supply chain solutions can experience notable enhancements in efficiency, cost reduction, customer satisfaction, and overall performance. Within the digital supply chain framework, data analytics plays a pivotal role as a key component. Through the utilization of big data analytics, organizations can extract valuable insights about customer behaviour, demand patterns, and operational performance. For instance, the application of predictive analytics enables organizations to more accurately forecast demand, thereby facilitating proactive inventory management and mitigating instances of stockouts. Moreover, real-time data analytics empowers organizations to monitor and optimize their supply chain processes, resulting in heightened agility and responsiveness, as highlighted by Ivanov and Dolgui (2021). Figure 1 shows the overview of digital supply chain. IoT represents another vital facet of the digital supply chain. By incorporating IoT devices and sensors into products, vehicles, and facilities, organizations can achieve real-time tracking, monitoring, and control of goods and assets across the supply chain. This enhanced visibility empowers organizations to optimize inventory levels, enhance asset utilization, and minimize lead times. According to a report by Gartner (2022), the adoption of IoT in supply chain management is poised for substantial growth, with the anticipated proliferation of connected devices reaching billions shortly.
Cloud computing emerges as a pivotal technology in the context of the digital supply chain. Leveraging cloud-based platforms, organizations gain seamless storage, access, and sharing capabilities for data and applications. Such functionality promotes collaboration among supply chain partners, facilitating real-time information exchange and coordination. Furthermore, cloud computing offers scalability and cost-effectiveness, allowing organizations to leverage computing resources on demand without substantial upfront investments, as emphasized by Wang et al. (2016). The emergence of blockchain technology has garnered significant interest within the digital supply chain domain. Blockchain offers a distributed and immutable ledger that enhances transparency, traceability, and trust in supply chain transactions. It facilitates secure and tamper-proof recording of information, including details regarding product origin, quality certifications, and transaction history. By harnessing the power of blockchain, enterprises can effectively mitigate the risks associated with counterfeit products, ensure adherence to regulatory requirements, and streamline the financial aspects of the supply chain. Kshetri (2022) has emphasized the remarkable advantages of employing blockchain technology within the digital supply chain.
The digital supply chain brings forth numerous advantages for organizations. Firstly, it empowers organizations to bolster operational efficiency by automating repetitive tasks, optimizing processes, and minimizing manual errors. As a result, organizations can achieve cost savings and enhanced productivity. Secondly, the digital supply chain amplifies visibility throughout the supply chain, allowing organizations to track and monitor inventory levels, shipments, and performance metrics in real-time. This heightened visibility facilitates proactive issue identification and resolution, leading to reduced disruptions and improved customer service (Salikhov et al., 2023; Priyadarshini et al., 2021). Nevertheless, the adoption of digital supply chain strategies comes with its share of challenges. Organizations must tackle concerns surrounding data security and privacy since the heightened connectivity and data sharing associated with digitalization can expose them to cyber threats and breaches. Moreover, enterprises may face opposition to transformation and require significant investments in both infrastructure and workforce enhancement to proficiently execute digital solutions within the supply chain. It is imperative to recognize and tackle these obstacles to guarantee the triumphant assimilation of digital strategies into the supply chain framework. (Korpela et al., 2017). In summary, the digital supply chain signifies a transformative change in the realm of supply chain management, harnessing cutting-edge technologies to bolster efficiency, transparency, and adaptability. By incorporating data analytics, IoT, cloud computing, and blockchain, enterprises can acquire invaluable insights, elevate visibility, and optimize operations across the supply chain. However, alongside its myriad advantages, the digital supply chain necessitates the careful navigation of challenges about data security, privacy, and managing organizational change. Overall, the digital supply chain presents substantial prospects for organizations to secure a competitive edge in today's ever-evolving business landscape.