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What is supply chain technology, and why is it important?

Organizational success relies heavily on effective supply chain management. There are numerous stages, from brainstorming to the finished product. The efficiency with which a business oversees this procedure often determines its bottom line.

Learn more about supply chain technology management, its importance, and how it can help your company save money in this article.

  • Improved Teamwork.

Organizations face significant difficulties with information flow. Experts found that 76% of businesses still don’t have a system to move data throughout the supply chain automatically, and 50 percent of companies report that information silos have led to missed sales opportunities.

An end-to-end view of the supply chain is made possible by integrated software solutions that eliminate bottlenecks and facilitate the smooth exchange of information. Supply chain managers can make insightful decisions with the help of improved data accessibility.

  • High-Quality Assurance Procedures Have Been Enhanced.

In a recent study, experts explain that the rule of 10 applies to quality control problems. The rule of 10 states that the cost to replace or repair an item increases tenfold at each successive step so that quality issues can have a significant financial impact on businesses.

Better quality control benefits businesses that have more influence over their direct suppliers. For instance, having standardized minimum quality criteria allows direct suppliers to locate and collaborate with secondary suppliers who meet those requirements. Also, if your company has quality standards that its vendors need to complete, you can provide them with process guidelines to help them do so.

Companies may keep quality control to a minimum by only working with the best vendors and suppliers identified via analysis of performance data. Here supply chain technology plays a significant role.

  • An Increased Rate Of Efficiency.

Suppose businesses had access to up-to-the-minute information on raw material availability and production delays. In that case, they might take corrective measures like switching to a different supplier to avoid more setbacks. Many problems, such as low stock levels or late customer deliveries, arise because businesses need access to real-time data and cannot quickly switch to plan B.

Intelligent automation solutions/supply chain technology led to improved productivity. Using collaborative mobile robots from 6 River Systems, for instance, Healing Hands Scrubs increased production by 100% and cut down on needless walking by 75%. A good customer experience and a strong brand reputation are supported by investments in the appropriate automation technologies and the strategic use of data to reduce delays.

  • Maintaining A Constant Pace With The High Demand.

According to study, if sales rise 5% in one week, stores may purchase 7% more inventory the following week, assuming this trend will continue. Next in line sees what looks to be a 7% uptick in demand and demands even more of his supplier. A 20 percent rise in orders may not materialize for the plant until much later.

This phenomenon, known as the bullwhip effect, is the end consequence of a lag in disseminating news regarding shifts in supply and demand. With access to timely, accurate information and integrated data, leaders in the supply chain are better able to anticipate needs and quickly adapt to changing market circumstances, mitigating risks like the “bullwhip” impact.

  • Efficiency In Transport Optimization.

From 2020 to 2021, freight transportation expenses climbed by 7%, while private and specialized trucking prices increased by 9.5%, as reported in Logistics Management’s The State of Logistics Report. The cost of transporting a less-than-truckload increased by 6.6%, while the price of a full truckload increased by 6.4%. Optimizing shipping is a top goal for supply chain managers because of its ever-increasing expenses. Companies may better serve their customers’ needs and save shipping expenses by determining the optimal delivery strategies for various order sizes and quantities. That’s good news for the company’s bottom line, and it can use those savings to increase customer happiness by passing them on to them.

  • Lower Total Operating Expenses.

Better demand forecasting allows businesses to lower the amount of low-velocity stock they have on hand in favor of faster-moving, higher-profit items. Overhead is mainly made up of warehouse fulfillment prices. You may reduce these expenditures by enhancing warehouse efficiency via improved supply chain technology, a more well-thought-out structure, and appropriate automation technologies.

Finding wasteful spending is another technique for streamlining processes. For example, suppose your logistics expenses are too high. In that case, you may save money quickly by moving to a different service provider offering the same quality and level of service for less.

  • A Lessening Of Potential Dangers.

Supply chain risks may be uncovered via high-level and detailed data analysis, allowing businesses to better prepare for and react to disruptions. Companies may avoid adverse effects if they take preventative measures rather than responding in real time to supply chain interruptions, quality control difficulties, or other concerns. Companies may also streamline their operations by better understanding the dangers they face. For instance, if businesses knew more about the dangers lurking in their supply chains, 87% said they could cut their stock by 22%.


Any point in the supply chain may be affected by a disruption, and vice versa; well-managed supply chains have direct and indirect impacts that promote the smooth and efficient transfer of resources from procurement to delivery. For better supply chain technology, reach contact NAVATA SCS.

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