This chapter intends to explore the influence of digitization on supply chain sustainable performance. An attempt has been made in this chapter, first, to define supply chain management and its practical relevance, then to highlight the different components of the supply chain, and finally, how Industry 4.0 technologies can be used in designing these components so that all the components of the supply chain work in a coordinated manner and that they are effective in achieving the objectives of supply chain sustainability.
TopIntroduction
An effort has been made in this work to explore the importance of digitization in the context of supply chain management. Specifically, the work focuses in highlighting the influence of digitization on supply chain sustainable performance. The following are the objectives.
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To study the components of a company’s supply chain
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To understand the problems or issues
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To understand how digitization technologies work
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How digitization can help, components of a company’s supply chain, in achieving sustainable objectives
Background
A Supply chain consists of the company, suppliers, customers, logistics, and all other entities which are involved in the transformation of raw materials into a finished product, which is delivered to the customer. Today, a company’s supply chain is facing multiple challenges, such as the timely acquisition of raw materials, acquiring materials of the right quality, accurately forecasting customer demand, understanding customer’s requirement, timely payment of suppliers, identifying right suppliers, managing work in process, managing company’s inventory, etc. Managing supply chain challenges is very much essential for the success of any organization (Fair, 1989; Blinder, 1986; Atour Taghipour,2018). As far as the author’s knowledge goes, practitioners and researchers require a resource, which comprehensively covers the effect of digitization on supply chain sustainability. In this context, the proposed work assumes special significance.
Main Focus Of The Chapter
The objective of any company must be to design its supply chain and ensure it achieve excellence during operation. The components of a company’s supply chain are shown in Figure 1.0.
Figure 1. Components of a company’s supply chain
With the advent of Industry 4.0 technologies (viz. mobile, internet of things, augmented reality, 3D printing, sensors, Big-Data, etc.) (Ornig, 2016), researchers have started using these technologies in designing the various components of the supply chain. The idea is to make all the components of the supply chain efficient, flexible, quick, and also work in a coordinated manner for meeting the expectations of the customer. In the following paragraphs, an effort has been made to highlight how Industry 4.0 technologies can be used in not only making the particular component to excel but also to contribute to the excellence of the entire supply chain. The following paragraphs show how digital technologies have been used in designing the different supply chain components.
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Planning: Organizations will have to plan so that they can design the right supply chain for meeting the requirements of customers. Accurately forecasting the demand of a product is very important as it helps the company in identifying buying the right type of materials, in the right amount, at the right time at the right place, and the right price. This is done by establishing contracts with the right suppliers. An accurate forecast would also help suppliers in knowing what type of materials are required by whom, when, and in what quantities. So that the supplier can not only plan but also sell the raw materials required by the company at competitive prices. Thus, suppliers require the company’s forecast and sales data so that they can make the right decisions at the right time.