Digital supply chain boosts operational efficiency and raises risk concerns
20 Mar 20238 min read
Summary
- Digital tools and connectivity are enabling supply-chain players in Asia to significantly boost operational efficiency by improving visibility, automation and real-time decision-making.
- Alongside the efficiency gains, the article warns that increased digitalisation also elevates risks — including cyber threats, data integrity issues and technology-dependency vulnerabilities.
- The key managerial takeaway: firms must balance investments in digital supply-chain transformation with robust risk-mitigation strategies, so the drive for performance improvements does not expose the business to unintended disruptions.
More businesses are now integrating digital supply chain initiatives into their operations. In Asia, digitalization is at the forefront of ushering the shift to the dubbed “supply chain 4.0.” It is where new technologies play a crucial role in streamlining business processes.
An example is the collaboration between Malaysian Airlines and GE Digital, which is a software and Internet of things (IoT) services provider. GE Digital’s Fuel Insight and Fuelpulse aviation software aid in catering to the airline's initiatives on sustainability as well as in the modernization of its fuel efficiency program.
Although Malaysian Airlines have yet to release further data on the said cooperation, GE Digital’s past partners from the supply chain network have shown positive results. Among others, Gerdau, a steel producer, was able to get their return on investment in 8 months, almost half of the initial 18 months target.
The total savings of Gerdau reached $4.5 million in a year for an investment of $1.5 million. Gerdau also experienced a 5% lower freight cost. Also the raw material inventory became faster, from 3 days to 7 minutes.
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