Transparency through digitization: For the area of supply chain management, transparency along the entire supply chain is a key success factor.

Opportunities in supply chain management through digitalization in production

Digitalization in production is advancing. New IT systems, sensors and intelligent systems are increasingly being introduced on the shop floor. At the same time, logistics is becoming smarter and digital exchange with suppliers and customers has become essential. But what added value does the digitization of production bring to supply chain management in order to ultimately meet the ever-increasing demands of the market?

For supply chain management, transparency along the entire supply chain is a key success factor. Increasing transparency makes it possible to reduce both inventory and working capital. In addition, on-time delivery and responsiveness can be increased to ultimately achieve higher customer satisfaction. To achieve greater transparency, data must be collected and processed in real time. Modern technologies such as RFID, Manufacturing Execution Systems (MES) or the equipment of machines and transport systems with sensors are just a few examples.

RFID allows transport units to be tracked within the company itself, from incoming goods to outgoing goods, and even beyond the company’s borders. This makes it possible to generate an image of the logistics processes in real time. However, equipping the transport units alone does not add value to supply chain management. In addition, RFID readers and other IT systems must be in place to continuously collect and process this data. The collected data can be processed by an MES, for example. This system forms the critical building block for establishing cyber-physical systems and acts as a real-time and web-enabled link between the ERP system and the store floor. Likewise, an MES can further process the machine and production data collected by sensors. This enables networking in which machines, storage and transport systems, and operating equipment exchange their information with each other. In addition, the captured data can be shared across plants or even across companies, creating end-to-end digital connectivity between supply chain players. Automatic orders from upstream players in the supply chain are thus triggered and converted into production orders. This creates supply and production chains with low storage costs along the supply chain.

There are many benefits that can be achieved through the digitalization of production, leading to more efficient supply chain management. As a technical consultancy with expertise in supply chain management and digitalization, we are happy to support you in deciding which digitization strategy is right for you. We also evaluate the potential of digitalization for your supply chain management activities.