Introduction

In today’s fast-paced and highly competitive business landscape, companies are increasingly recognizing the importance of digital supply chains in driving growth, reducing costs, and improving customer satisfaction. According to a report by Gartner, by 2025, 65% of supply chain organizations will have invested in a digital supply chain platform, up from 30% in 2020 (1). However, building a future-proof digital supply chain requires a deep understanding of the technical architecture that underpins it. In this blog post, we will explore the key components of a digital supply chain technical architecture and how businesses can leverage them to stay ahead of the competition.

The Current State of Digital Supply Chains

Digital supply chains are complex systems that involve the integration of multiple stakeholders, processes, and technologies. According to a report by McKinsey, the average supply chain has over 100 different systems, platforms, and tools, resulting in a complex web of interactions (2). However, many businesses are still using outdated technologies and manual processes, which can lead to inefficiencies, errors, and delays. In fact, a study by the Council of Supply Chain Management Professionals found that the average supply chain has a visibility rate of just 6% (3).

Technical Architecture Building Blocks

So, what are the key technical architecture building blocks of a digital supply chain? Here are four essential components:

Data Management

Data management is a critical component of a digital supply chain technical architecture. According to a report by Accenture, organizations that invest in data management can expect to see a 15% reduction in supply chain costs and a 12% increase in revenue (4). A robust data management system should provide real-time visibility into supply chain operations, including shipments, inventory, and orders. This can be achieved through the use of technologies such as data lakes, data warehouses, and business intelligence tools.

Application Programming Interfaces (APIs)

APIs are a crucial component of a digital supply chain technical architecture, enabling seamless communication and data exchange between different systems and stakeholders. According to a report by MuleSoft, organizations that invest in APIs can expect to see a 50% reduction in supply chain integration costs and a 25% increase in supply chain agility (5). APIs can be used to integrate with suppliers, customers, and logistics providers, as well as with internal systems such as enterprise resource planning (ERP) and transportation management systems (TMS).

Cloud Computing

Cloud computing is a key enabler of digital supply chains, providing scalability, flexibility, and cost savings. According to a report by IDC, cloud computing can reduce supply chain IT costs by up to 50% and improve supply chain agility by up to 30% (6). Cloud-based technologies such as software-as-a-service (SaaS) and platform-as-a-service (PaaS) can be used to deploy digital supply chain solutions quickly and easily.

Internet of Things (IoT)

IoT is a critical component of a digital supply chain technical architecture, enabling real-time visibility into supply chain operations and improving supply chain efficiency. According to a report by Gartner, IoT can reduce supply chain costs by up to 20% and improve supply chain visibility by up to 50% (7). IoT devices such as sensors and GPS can be used to track shipments, monitor inventory, and optimize logistics operations.

Putting it all Together

So, how can businesses put these technical architecture building blocks together to build a future-proof digital supply chain? Here are some best practices to follow:

  • Develop a digital supply chain strategy that aligns with business goals and objectives.
  • Invest in a robust data management system that provides real-time visibility into supply chain operations.
  • Use APIs to integrate with suppliers, customers, and logistics providers, as well as with internal systems.
  • Leverage cloud computing to deploy digital supply chain solutions quickly and easily.
  • Use IoT to enable real-time visibility into supply chain operations and improve supply chain efficiency.

Conclusion

Building a future-proof digital supply chain requires a deep understanding of the technical architecture that underpins it. By investing in the key technical architecture building blocks of data management, APIs, cloud computing, and IoT, businesses can improve supply chain efficiency, reduce costs, and improve customer satisfaction. What’s your experience with digital supply chains? Share your thoughts in the comments below!

References:

(1) Gartner, “Digital Supply Chain Platform Market Share, 2020”

(2) McKinsey, “The digitization of the supply chain”

(3) Council of Supply Chain Management Professionals, “2020 Supply Chain Visibility Report”

(4) Accenture, “Data management in the supply chain”

(5) MuleSoft, “API-led connectivity for the supply chain”

(6) IDC, “Cloud computing and the supply chain”

(7) Gartner, “IoT and the supply chain”

### tags:

- [digital supply chain](#)
- [supply chain management](#)
- [technical architecture](#)
- [future-proof](#)
- [data management](#)
- [APIs](#)
- [cloud computing](#)
- [IoT](#)