Digitalization of the Supply Chain in 2024

digitalization of the supply chain

The digitalization of the supply chain has taken off since 2020 and the trend shows no signs of slowing down. The end/beginning of the year always affords industries an opportunity to reflect and look ahead. Supply chain management is no different, and when you combine the look back/look ahead for 2023, one trend stands out: digitalization. With the ongoing labor shortage, the need to drive down the disruptions that have plagued the industry, and ever-increasing customer demand, the supply chain has never been more dependent on technology.

While supply chain management evolves and drives the need for these tools, the technology industry is simultaneously making leaps and bounds. Today and tomorrow, supply chain management is increasingly digital. A whole host of new features is increasing the sophistication and resilience of the supply chain.

Trends in Supply Chain Digitalization

Among the technology developments that helped companies push the envelope this year is, of course, AI. Predictive analytics and machine learning each helped deliver value to the supply chain over the past 12 months. Generative AI, which takes the form of tools like ChatGPT, made the biggest splash in 2023, and these tools have only grown smarter in the past 12 months.

Look to 2024 to introduce ever more sophisticated forms of AI, cognitive computing being one such example. While sounding very futuristic, cognitive computing allows models to simulate the human thought process when programmers cannot program in a correct answer. Cognitive computing automates dynamic processes like inventory management and route optimization. As the tools mature, expect supply chain managers to spend a good deal of their tech budgets in the AI arena next year.

Robots will also continue to play a big role in the warehouse, and the next generation will be more mobile and more sophisticated. As AI evolves, it may also integrate with robots, making them more intelligent—and increasingly valuable—on the warehouse floor. New applications may include areas that have long been manual operations and are challenging to automate, such as carton picking.

Cloud computing will also take on a larger role in the supply chain, especially as more WMS providers introduce software-as-a-service (SaaS) models. Companies that have struggled with legacy systems may now afford modern WMS in a rental model rather than needing to make a large investment. The SaaS options will also give these organizations easier methods for keeping up with the latest bells and whistles, allowing them to better integrate with the overall supply chain. Look for generative AI to play a role in cloud-based WMS, as well.

Of course, the goal of supply chain digitalization is to orchestrate operations entirely, end to end. With all partners on board, digitalization would be able to deliver reliable inbound forecasts, which would then allow companies to line up resources correctly. From labor to automation, all down-the-line partners would have what they need in place to meet customer demands. Many of the digitized tools needed for this vision are off and running, and 2024 will only allow them to mature. The promise of orchestration is growing ever closer to reality.