The advantages of digitization in the supply chain
For any business, having a robust supply chain management and operation process are crucial to organizational success. It is also one of the most complex elements of a modern enterprise.
An organization that can optimize supply chain through digitization can better guarantee competitiveness in the market. On the other hand, an organization that has not optimized its supply chain for the modern market can easily find itself overwhelmed by the responsibility of effective supply chain management. This overwhelming responsibility is amplified if supply chain operations rely heavily on paper and physical records for management.
Take the Coca-Cola Company (TCCC) and its bottlers, Coca-Cola Bottling Sales and Services (CCBSS) for example. They are both massive multinational organizations with complex logistics made up of suppliers and channels, looked to optimize their supply chains by digitizing paper records and data.
A Turning Point for Coca-Cola’s Supply Chain
Coca-Cola has a unique approach to business scaling by franchising the manufacturing, packaging and logistics to the CCBSS “bottlers,” who support the fulfillment of Coca-Cola customers. But it had a revenue recognition problem with its ‘proof of delivery’ documentation. While TCCC outsourced all of its manufacturing and logistics management of its products CCBSS, it owns the contracts with the customers like Costco, Walmart, Kroger, etc. The “bottlers” simply fulfill the orders.
For example, each month TCCC has to provide evidence of the fulfillment of goods and services. This is done through a proof of delivery (POD) ticket between the deliverers and receivers. If this document can’t be provided, the customer won’t pay the bill. The burden of proof falls to the bottlers.
The pre-digital procedure was to photocopy the POD at the bottling office then FedEx the original to a supply chain management company. Yet, the process was losing approximately 25 million of these documents a year. A staggering number and a significant loss of revenue.
The breakdown was coming because of a complicated ecosystem and human error. TCCC contracted seven different companies to support the ecosystem that each single document was sifted through. As a result, they were suffering from an overly complex and inefficient system.
Recently, TCCC have decided to digitize parts of its operation; including supply chain management in order to maximize accuracy and efficiency. Through digitization, TCCC is estimated to soon save over $1 million by consolidating vendors through document life cycle management. The document management, image storage, indexing and physical storage and shredding suppliers have been replaced with a single vendor and turned what was once a bird’s nest of process outsourcing into a streamlined system with advanced technology that can index tens of millions of documents and do it with far greater levels of quality, accuracy and speed.
Coca-Cola is the Start, But What About The State of Digitization in the World
Many organizations operate in the 21st century, employing modern business practices and strategies that help make them as competitive and marketable as possible — Coca Cola included. However, many of those same organizations still use paper records as a means of keeping and storing data. This causes a “needle in the haystack” approach when it comes to organizing data needed for a specific task. In turn this can severely hinder capabilities to effectively perform a task.
How Digitizing Records Can Build an Effective Supply Chain
On the surface, traditional supply chain models are very linear – suppliers interact with producers, who interact with distributors, who talk to retailers, who sell to consumers. These interactions involve a lot of planning, ordering and confirming transactions without a great deal of information about the other elements in the chain.
With an integrated, digitized supply chain, data does not move linearly. Instead, suppliers can effectively plan, qualify and confirm production based on real-time data showcasing an increase in consumer demand. Supply chain digitization allows every member of the supply chain to make informed decisions using higher-quality data.
Digitizing records is the most effective way to optimize your supply chain for a fast moving, data-centric world.
High Performance Robots as a Way to Automate and Digitize Supply Chain
We work in a fast-moving and efficient era of modern enterprise. Those who do not optimize their supply chain for the data-driven era, are bound to fall behind their competition. Supply chain optimization through digitization improves the flexibility, operational capability and profitability of all parties involved.
Enterprises that wish to maximize efficiency and operational capability of their supply chain should think about the next logical step in doing so – robotics-powered automation.
In many ways, robotic technology has had a profound impact on manufacturing and industrial sectors. A few of the world’s largest companies have started to visualize the bigger picture – digitization of content through the use of automated robotic systems are positioned to make consistently intelligent decisions throughout the supply chain.
Setting a New Trend for Supply Chain Professionals
Just as Coca-Cola gets set to digitize its massive supply chain operations, other multinational corporations and organizations should look to do the same to maintain competitiveness. Digitization through robotic automation can save an organization time when searching for vital documents and money.
Written by: Alex Fielding
As CEO, co-founder and member of the board of directors for Ripcord, Alex Fielding is responsible for the leadership, vision and execution of the company. Fielding started his career as an engineer at Cisco Systems and Apple, where he worked on multiple generations of MacOS, PowerBook, Network Server and was part of the first iMac team. Shortly after departing Apple, he worked at Exodus Communications with Ellen Hancock, Exodus’ CEO who was Apple’s former CTO. He co-founded Wheels of Zeus with Apple’s co-founder Steve Wozniak in 2001, which was sold to Zontrak in 2006. Alex was Chief Technology Officer, Federal Government at Power Assure and then Vice President at Vigilent before starting Ripcord. Alex sits on the Board of Directors of The Institute for the Study of Knowledge Management in Education (ISKME), is a Board Member of the Code Warrior Foundation and is a founding member of Singularity University. He is an Orange Telecom mentor in their Mentor Fab startup accelerator and an Advisor to Astra Space.