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Digital Transformation: Harness the Power of Technology for Your Supply Chain

February 7, 2022

In this blog, Vanessa explores the digital transformation and how to manage it within your organization. Drawing on her background as a senior account manager at Inspectorio and her work with some of the world’s leading brands and retailers, Vanessa explains why the People, Processes and Technology framework is essential for your success.

The phrase “digital transformation” is a plague in conversations about the supply chain industry — too often it’s just another buzzword that feels empty and unactionable.

In fact, digital transformation is an attainable goal that an increasing number of brands and retailers are embracing. Its promise to revitalize production networks is so powerful because of its dynamism — it embodies pure action and strategy.

As a senior account manager at Inspectorio, I’ve had the privilege of influencing our clients’ long-term strategic direction and account strategies. I’ve stood on the front lines of digitization in the fashion and garment industry, and I’ve witnessed how the world’s leading brands and retailers have used new technology to revolutionize their production networks.

In this post, I’ll cover in clear terms what digital transformation is, the different areas it can improve in your organization (spoiler alert: it’s not just about technology), and its importance to anyone involved in retail and supply chain management.

What is digital transformation?

Digital transformation is the act of taking manual processes such as:

    • Pen-and-paper audits
    • Decentralized, sporadic data collection
    • Limited, low-integrity oversight of factory-floor activities
    • Disconnected communication platforms (email, messaging, Excel spreadsheets)

…and replacing them with new, tech-powered capabilities like:

    • Continuous, automatic, cloud-based data collection
    • Centralized platform for communication, data/analytics, and supply chain activities
    • Automatically generated insights via artificial intelligence (AI) and machine learning (ML)-powered analytics
    • Real-time visibility, from shop-floor activities to the entire supply chain

According to Hinterhuber, Vescovi, and Checchinato in their book Managing Digital Transformation: Understanding the Strategic Process, digital transformation is “a process that aims to improve an entity by triggering significant changes to its properties through combinations of information, computing, communication, and connectivity technologies” that “[encompass] the profound changes taking place in society and industries through the use of digital technologies.”

This definition is painted with a broad brush, but at its core, it stresses technology. However, there are two other variables that often get overlooked when discussing digital transformation: people and processes. Those two are pivotal if you want to have real organizational change.

The authors quoted above acknowledge this reality: “Technology itself is only part of the complex puzzle that must be solved for organizations to remain competitive in a digital world.” They go on to write that strategy and cultural changes are also critical to digital transformation — and in my experience, nothing could be more important.

We mustn’t forget that digital transformation is a holistic process that includes people as well as processes and technology. Understanding transformation in this context will support not only the adoption of the new system, but a rise in productivity and even improvements in workers’ well-being.

People, processes, and technology

There are three pillars that support your digital transformation initiatives:

People

As people will be the ones using the new technology, it must be relevant for them. Your organization’s culture plays a very important part in making sure this is the case.

 

Processes

Understand your existing supply chain processes to define what can be digitized and for what advantage. This allows you to ensure that every change you make serves to optimize your supply chain.

 

Technology

Choosing top-tier technology makes it easier to adapt a new system to your specific use case and processes and set the stage for a successful digital transformation journey.

The technological side of the equation provides the framework for better customer and employee experiences by streamlining processes and increasing visibility. I believe there are two important considerations when it comes to developing new digital transformation processes:

      1. Your company’s strategic influence on this transformation
      2. The daily impact the new processes have on workers

You must work to strategically influence your organizational culture to support your workforce’s adoption and positive sentiment about the new technology. It’s the daily impact that will define how relevant and effective the new technology will be to your organization.

All this points toward a simple conclusion: that the adoption of new technology and processes requires a focus on how those two factors impact your workforce. Or in other words, digital transformation is a fundamental change in processes, that hinges on the adoption of new platforms and tools by the workforce and a concerted change in company culture from the top down.

Ask the right questions

As you help set the stage for a successful digital transformation in your own supply chain, start by asking: am I choosing the right technology for my organization?

If you follow the point made above — that the right supply chain technology is one that encourages new processes and supports a cultural shift — there are four key characteristics it should possess:

Lives in the cloud

Cloud technology is the only way to store and analyze the vast amounts of data your organization needs to thrive in an increasingly digital world.

A recent McKinsey survey found that two-thirds of industrial companies are actively using cloud-based solutions, and the rest are either rolling out cloud solutions or are preparing to. Another study by Google showed that during the COVID-19 pandemic 76% of manufacturers increased “the use of digital enablers and disruptive technologies such the cloud, artificial intelligence, [and] data analytics”.

Includes robust AI and ML-powered analytics

However, a cloud-based solution on its own won’t drive change. That’s because collecting data is only the first step — the important part of the process happens when that technology delivers intelligent, actionable insights from that data.

These insights can include things like defect trends and predictive risk, which help you understand where to put resources in your supply chain.

Automates everything possible

The elimination of manual tasks is one of the most powerful drivers of improvement and change in a supply chain. Your tech solution should automate tasks whenever possible to allow your employees to put their efforts into higher value-added activities.

Enables transition from policing suppliers to real collaboration

A truly robust supply chain is one in which factories, vendors, and brands/retailers work as a partnership toward common goals. This means shifting away from the traditional technique of policing suppliers to ensure your quality and compliance standards are met.

The technology you choose for supply chain management should be easy to roll out across a global production network and centralize communication and data to a single platform. Then you can focus on collaborating with your supply chain partners and help them succeed.

Rethink your core processes

The best choice today for a network platform to enable your digital transformation initiatives is a Software-as-a-Service (SaaS). This technology outsources your infrastructure to the economy and security of a dedicated data center facility and gives you access to a host of cutting-edge innovations that can allow you to rethink core processes in your organization.

Is it time to change the way your employees work and think about their roles? You too can make a true shift to a culture of efficiency, transparency and shared ownership across your supply chain.

To see what Inspectorio offers and whether it might be the right choice for your organization, contact us.

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