Supply Chain Forum: An International Journal

ISSN: 1625-8312 (Print) 1624-6039 (Online) Journal homepage: https://www.tandfonline.com/loi/tscf20

Digital technology enablers and their implications

for supply chain management

Mohsen Attaran

To cite this article: Mohsen Attaran (2020): Digital technology enablers and their implications
for supply chain management, Supply Chain Forum: An International Journal, DOI:
10.1080/16258312.2020.1751568

To link to this article: https://doi.org/10.1080/16258312.2020.1751568

Published online: 21 Apr 2020.

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SUPPLY CHAIN FORUM: AN INTERNATIONAL JOURNAL
https://doi.org/10.1080/16258312.2020.1751568

REVIEW

Digital technology enablers and their implications for supply chain

management
Mohsen Attaran
School of Business and Public Administration, California State University, Bakersfield, CA, USA

ABSTRACT KEYWORDS
Several technologies drive digital trends and bring about change in SCM. They include AI and Digital technology enablers;
robotics, cloud computing, 3D printing, advanced analytics, blockchain, AR, RFID, IoT, and digital supply chain
cloud technology. These technologies are changing the face of the industry, transforming management; digital age;
blockchain; robotics; additive
many aspects of business models, supply chains, products, sales, and services. This paper
manufacturing; IoT
conducts a literature review that aims to identify current research and directions in terms of
how these technologies can enable or enhance and streamline digital supply chain (DSC)
performance. This paper underscores the importance of these technologies for supply chains
and logistics, examines their trends and challenges in supporting digital supply chain perfor-
mance, and explores the implementation and managerial challenges of creating a new inte-
grated paradigm of the digital supply chain. The research will also explore potential barriers to
digitising procurement and supply chains and ways to overcome them. Finally, the paper
reviews the role of 5 G as a significant technology for growing industry digitisation.

Introduction identifying areas where digital technology is being

applied in supply chain management. Priorities were
Digital technologies change the way processes and
given to supply chain journals. Papers were selected
operations are completed. Industries and organisa-
form the EBSCO database and a variety of Internet
tions are forced to adapt, or risk being left behind.
sites, including ResearchGate, Google Scholar, etc.
Digitisation is transforming the way organisations
through December 2019. The outcome of the review
function and is unleashing global opportunities for
is a summary of digital technology capabilities and
value creation in industries. Digitalisation creates
their impact on supply chain performance.
superior benefits to a wide range of companies and
has received much attention from enterprises all over
the world (Büyüközkan and Göçer 2018). Digitisation Trends in supply chain management
has brought many benefits to the industrial sector,
Supply Chain Management (SCM) is an essential part of
particularly in processing and manufacturing, yet enor-
every business entity. It encompasses the planning,
mous untapped potential remains. Advances in auto-
design, implementation, and control of the logistics
mation, intelligent machines, big data and analytics,
activities of a firm including, procurement, warehous-
and the Internet of Things (IoT) have created opportu-
ing, inventory control, manufacturing, distribution, and
nities for substantial gains along the entire industry
order fulfilment (Attaran 2017c).
value chain. Many companies are investing heavily to
The unending cycle of rising supply chain costs
digitalise their business models and their supply chain
impacts the bottom line of all players involved. The sav-
management (SCM) in particular.
ings in transportation, inventory carrying costs, and over-
all management of the supply chain could be substantial
Design/methodology/approach if companies strive to increase supply chain efficiencies.
Cost reduction is an essential factor in today’s global
We conducted a literature review and searched for supply chain competitiveness. Manufacturers, retailers,
books, journal papers, conference papers, industrial and distributors have identified supply chain cost reduc-
reports, and theses that contained the word ‘Digital tion as a critical issue to address. Additionally, excellent
Supply Chain’, ‘Digital Technology’, and ‘Digital supply chain performance has a strategic value that could
Technology for Supply Chain’ in their titles, keywords, lead to rapid financial payback, improvements in produc-
or abstracts. These articles were selected for conduct- tivity and profits, and advances in critical global compe-
ing our reviews. Our review of past work focused on titive edge (Attaran 2012):

CONTACT Mohsen Attaran [email protected] School of Business and Public Administration, California State University, Bakersfield, 9001
Stockdale Highway, Bakersfield, CA 93311-1099, USA

© 2020 Kedge Business School

2 M. ATTARAN

Fragmentation Digitisation
The traditional supply chain acts as a network between Supply chains are strongly influenced by the digital
different companies for the production and distribu- economy. The digital economy is based on digital com-
tion of products or services. In the 1960 s, various puting technologies where the business is conducted
functions of SCM, including transportation, warehous- through online and mobile devices. In this economy,
ing, purchasing were fragmented. Over the years, tre- value is created through the technology-enabled links
mendous progress has been made in traditional supply between people, machines, channels, and organisa-
chains. Companies and supply chain leaders have inte- tions. Consumers are empowered by digital platforms
grated different functions of the supply chains and like e-commerce, social media, and mobile networks to
made many improvements that contributed to enter- research and shop for what they want. They can tailor
prise agility and productivity. They reduced a number their wants to their specifications, purchase it at
of suppliers, deployed information systems to track the any hour or location, and expect delivery within days.
flow of goods and services and strengthen and centra- Companies can collect real-time information about
lised procurement policies (Figure 1) (Mangan, Lalwani, where consumer shop, what they buy, and how they
and Butcher 2008). purchase products, Personalised delivery of single-unit
products is becoming a global norm (Chase 2019).
The digital era necessitated a significant change to
traditional supply chains. Currently, critical aspects of
Integrated operations
the supply chain processes are undergoing an acceler-
Over the past ten years, supply chains have undergone ated digitalisation process (Geisberger and Broy 2012).
tremendous change – from a purely operational func- Technology and innovations are one of the main factors
tion to an independent supply chain management influencing the supply chain evolution (MacCarthy et al.
function. The focus of the supply chain management 2016). The Centre for Global Enterprise defines Digital
function has shifted to advanced planning processes Supply Chain (DSC) as ‘a customer-centric platform
such as analytical demand planning. which ensures model that captures and maximizes utilization of real-
integrated operations from customers to suppliers. time data coming from a variety of sources. It enables
Moreover, the focus of supply chain management is demand stimulation, matching, sensing, and manage-
also concentrated on cooperation and trust between ment to optimize performance and minimize risk’. (The
partners. Collaboration in the supply chain can be Centre for Global Enterprise 2016). Digital technologies,
observed in 8 key processes that include Customer including Big Data, Cloud, advanced analytics aided by
Relationship Management (CRM); Customer Service machine learning algorithms, and the Internet of Things
Management (CSM); Demand Management; Order (IoT), are helping traditional supply chain structures
Fulfilment; Manufacturing Flow Management; transform into intelligent digital models. This new digi-
Supplier Relationship Management; Product tal supply chain enables better visibility, better insights,
Development and Commercialisation; and Returns broader collaboration, and shorter response times
Management (Lambert and Cooper 2000). Results (Chase 2019). DSC enables increasing competitiveness
show information sharing on stock level or transport mainly by delivering information in real-time simulta-
and warehouse capacity availability, in real-time, to neously to many supply chain partners (Nowicka 2018).
many supply chain partners could result in gaining The following trends are creating disruptions and
competitive advantage (Nowicka 2018). require companies to rethink the way they design their

Figure 1. Evolution of supply chain management.

Source: Mangan, Lalwani, and Butcher (2008)
 SUPPLY CHAIN FORUM: AN INTERNATIONAL JOURNAL 3

supply chain (Mangan, Lalwani, and Butcher 2008; for optimal performance (Michel 2017). Improved per-
Kache and Seuring 2017; McKinsey & Company 2016): formance and reduced cost of these technologies will
determine how quickly they bring about change in
● Continuing growth of the rural areas and pressure SCM (Bienhaus and Haddud 2018).
to serve regions that have not been served There are limited number of academic studies that
before. explicitly focused on the DSC concept. Most articles
● Growing demand for logistics workers due to the discuss DSC technologies in terms of their applications
e-commerce revolution and its need for more (Iddris 2018; Pflaum et al. 2017). The focus of the
parcel shipments. research on DSC has primarily been on its enablers
● A decline in the size of the available workforce (Büyüközkan and Göçer 2018). A.T. Kearney studied
due to changing demographics the global SCM of 60 European companies and found
● A spectacular shift to online shopping and the six technology enablers that are digitalising SCM
continuation of changing consumer behaviour, (Kearney 2015). The study measured the impacts of
fuelled by new technologies digitisation on SCM and found strong effects on inven-
● Increasing customer demand for individualisa- tory levels, delivery times, and SCM flexibility. More
tion, customisation, and better service than two-thirds of the companies surveyed expected
● Secure online access to a multitude of options digitalisation to lead to greater transparency and thus
regarding where to shop and what to buy a better SCM decision. Gartner has also identified eight
● Disruptive technologies that are altering tradi- strategic technology enablers that could have transfor-
tional ways of working mative and disruptive impacts across supply chains
● The sheer amount of data being created through- (Pettey 2019).
out the world According to Farahani, Meier, and Wilke digital tech-
● Increasing expectation of the workforce to con- nologies are disrupting nearly all aspects of traditional
duct company business from their smartphones SCM (Farahani, Meier, and Wilke 2016). Büyüközkan
● Replacement of physical product by virtual and Göçer identified eleven novel technologies and
product analytical methods supply chain leaders could use to
achieve competitive advantage and delight their cus-
In a recent survey regarding the key performance indi- tomers. They include Robotics, Sensor Technology,
cators, supply chain leaders of leading companies Augmented Reality (AR), Big Data, Internet of Things
identified product quality, cost, and on-time delivery (IoT), Cloud Computing Technology (CCT), 3D Printing,
as the top three most important indicators. (The Centre Omni Channel, Self-Driving Vehicles, Unmanned Aerial
for Global Enterprise, 2016). To build on these trends Vehicle, and Nanotechnology. (Büyüközkan and Göçer
and cope with the change requirements, supply chains 2018). For our study, we have selected eight technolo-
need to become much faster, more flexible, more gies that are common on these three mentioned stu-
granular, more efficient, and much more precise. dies, as shown in Figure 2. The following sections

Digital technology enablers

To combat these challenges, the managers of supply
chains will need to compensate with automation that
can support workers and increase productivity. Over the
years, several technologies have played a part in digital
supply chains to unify information and processes, and
monitor real-time inventory levels and customer inter-
actions with the product. They include GPS tracking,
radio frequency identification (RFID), barcodes, smart
labels, location-based data, wireless sensor networks,
and cloud technologies. Global retailers such as
Amazon and Alibaba have invested in robotics for
goods handling and drones for deliveries. BMW is work-
ing on implementing a fully digitalised factory and
creating a more dynamic, data analytics-driven supply-
chain segmentation for inbound parts (Kearney 2015).
Digitisation will change supply chains. The main
objective of the digital supply chain is to make systems
to be much more aware of what is developing, and Figure 2. Digital technology enablers for SCM.
smart enough to change the chain’s physical processes Source: Kearney (2015); Büyüközkan and Göçer (2018); Pettey (2019)
4 M. ATTARAN

provide an overview of these digital technology higher-level tasks such as managing operations, coor-
enablers and offer a vision of how supply chains will dinating flows, fixing robots, and handling exception
be transformed and improved by existing technology orders.
trends. Advances in computer vision and motion-sensing
capabilities resulted in the development of a new type
of industrial robot known as collaborative robots or
Advanced robots enhance supply chain Cobots. These robots work alongside humans and
operations assist with some of the more challenging jobs, like
Robots are being deployed in manufacturing and lifting or transporting heavy objects or hazardous
delivery and are providing immense benefits in the materials under the watch of human supervisors. The
process. Accordant to recent studies by the cobots market is small today; however, it is estimated
International Federation of Robotics (IFR) the number that this sub-category of the industrial market will see
of industrial robots in use worldwide will increase to extraordinary growth in a number of units sold over
around 2.6 million units by 2019. That is about the next ten years (Murphy 2017).
one million units more robots than in the year 2015. The following section highlights some examples of
Approximately 70 percent of industrial robots are cur- robotic systems for the world of logistics that are cur-
rently at work in the automotive, electrical/electronics, rently under development or available today
and metal and machinery industry segments (IFR Press (Bonkenburg 2016). Table 1 also provides a summary
Releases 2016). list of advanced robotics in logistics and lists the names
A recent study finds that just 5% of current ware- of some of the vendors making these robots:
houses are automated (Bonkenburg 2016). These auto-
mated warehouses are typically highly mechanised (I) Trailer and Container Unloading Robots: These
environments using some type of material handling robots pick up a box and place it onto
automation. Robotics technology can make a conveyor that transports the item out of the
a significant impact in the SCM. Robots can help supply container and into the sorting centre.
chains in picking, palletising, and unloading. They can (II) Stationary Piece Picking Robots: These robots
transform supply chains and create a logistic supply can pick up a shelf of goods and bring them to
chain that is faster, safer, and more productive the picker who stays in one spot. After the
(Bonkenburg 2016). picker selects the needed items, the shelf
Robots are being deployed in warehousing and are moves away, and a different shelf arrives to
helping SCM to achieve higher productivity and take its place.
reduced cost. Advanced robots are helping logistics (III) Mobile Piece Picking Robots: These robots can
workers in sorting centres and final-mile delivery. drive around traditional warehouse shelves and
Robotic warehouses incorporate different types of picks items just like a person would.
robots, each with a specific job to perform, such as (IV) Home Delivery Robots: These small mobile
unloading trucks, co-packing, picking orders, check- robots can drive on sidewalks at slow speed
ing inventory, or shipping goods. Most of these and deliver packages directly to consumer
robots are mobile and self-contained. Still, they are homes.
coordinated through advanced warehouse manage- (V) Drones: They will continue to transform goods
ment systems and equipped with planning software delivery in the last mile.
to track inventory movements and progress orders
with a high degree of accuracy. These robotic ware-
houses are more flexible and will achieve higher pro-
Blockchain-enabled technology set to
ductivity with increased quality. Customers will
reshape SCM
benefit from faster service and higher quality.
Warehouse workers will have less repetitive tasks to A blockchain is a decentralised, continuously growing list
perform. They will be given more responsibility and of records, called ‘blocks’, that are maintained across

Table 1. Advanced robotics in logistics.

Robots Types Functions Vendors
Container Uploading ● Picks up a box and places it onto a conveyor ● DHL-Parcel robot
● Wynright-Trailer loading robot
Stationary Piece Picking ● Brings a shelf of goods to a stationary picker ● Kiva-Mobile robots
● SSI Schaefer-Robo-pick
● Knapp
● Viastore
Mobile Piece Picking ● Drives around warehouse shelves and picks items ● IAM Robotics-Mobile robot
● Fetch Robotics-Mobile robot
● Magazine- Picking robot named TORU
Home Delivery ● Delivers small packages directly to consumer homes ● Starship Technologies-Parcel delivery robot
Source: Bonkenburg (2016)
 SUPPLY CHAIN FORUM: AN INTERNATIONAL JOURNAL 5

several computers that are linked in a peer-to-peer net- a strengthening of the overall ability to control the
works. Each block in the chain commits to all previous supply chain and its activities (Brandon 2016).
blocks and transactions to create a network or chain. Blockchain helps to build and execute smart con-
Multiple computers on the Internet validate each transac- tracts, and to create trading-partner visibility and
tion added to a blockchain. Once the blockchain processes more efficient collaboration. Blockchain’s P2P trans-
through the information, every computer in the network actions enables a single point of contact for data,
locks in at the same time, creating a permanent, hard to eliminates the central authority needed to validate
alter digital records. Any blockchain system has to deter- transactions, allows decisions based on total supply
mine who can add new blocks to the chain and how it’s chain information, and facilitates collaboration with
done (Lee Kuo Chuen 2015). partners. Additionally, blockchain record-keeping
The blockchain technology’s key characteristics are procedures produce a chain of records and owner-
decentralisation, anonymity, persistence, audibility, ship that is much less vulnerable to fraud and cyber-
and resistant to modification or changes to the data. crime and difficult to hack and alter. Administrative
The most crucial property of blockchain is that it can- functions will be severely reduced or eliminated due
not be corrupted. Altering any unit of information on to the increased visibility of transactions This, in turn,
the blockchain would be difficult to impossible (Zheng will enhance supply chain efficiency and will reduce
et al. 2017). For the first time in human history, we can system complexity (Seidel 2018; Adams et al. 2017;
create a permanent record of every transaction, gov- Bridgers 2017; Shermin 2017)
erned by the unyielding laws of mathematics. Thus, (2) Impact on Logistics: Blockchain technology can
blockchain has the potential to be considered as also be used in logistics to reduce the paper-
a novel solution to the age-old human problem of work, provide relevant information more
trust. rapidly, prevent shipping fraud, and reduce
The majority of blockchain applications are in the shipping costs dramatically. Few companies
finance industry. Interest in exploiting blockchain in have recently tested the applications of block-
the manufacturing industry is also increasing. chain in logistics. IBM and the shipping com-
Distributed ledgers can be used in solving manufactur- pany Maersk concluded that blockchain could
ing challenges, especially in supply chain manage- efficiently track containers during the shipping
ment, including tracking containers during the process, thereby reducing the effort and neces-
shipping process and recording important product sary for the shipment (Sandner 2017).
information throughout the supply chain.
Table 2 summarises the applications of blockchain tech-
nology in improving supply chains. Two main applications
3-D printing and additive
of blockchain in SCM and logistics are explained below:
manufacturing-altering SCM and logistics
(1) Supply Chain Traceability: Blockchain technology Three-dimensional printing (3-D printing), also known
has great potential in the areas of supply chain as additive manufacturing (AM) or rapid prototyping,
traceability and supply chain transparency has been around since the1980 s. In the early days, the
(Somapa, Cools, and Dullaert 2018). Blockchain can technology was costly and not feasible for the general
hold details of each part, accessible by each manu- market. In recent years costs drastically decreased,
facturer in the production process. Blockchain allowing 3-D printers to find their way into many
enables firms to see across tiers in the supply industries including automotive, aerospace, defence,
chain, both upstream and downstream (O´Leary consumer products, industrial products, healthcare,
2017). The Blockchain serves as an alternative and and architecture. 3D printing has the potential to be
can improve and speed up information sharing and a hugely disruptive technology that could alter the
replace paper tracking and manual inspections sys- supply chain in some industries. Experts believe that
tems that make supply chains vulnerable to inac- this technology will keep growing at a fast pace and
curacies (Williams et al. 2013; Gupta 2017). This play an essential role in the future of supply chains
potential for information sharing is seen as (Attaran 2017a).

Table 2. Applications of blockchain in supply chains.

Categories Phases Applications and Key Benefits
Supply Chain Management ● Product inception ● Efficient tracking of containers across multiple constituencies
● Product development ● Accurate recording of relevant product information
● Product distribution ● Support security and compliance adherence
● Product trade financing ● Expedite reconciliation of the contract and the transfer of money
● Product retail and use ● Improve anti-counterfeit measures
● Product recycling/aftermarket ● Inexpensive registration of digital assets
Source: (Somapa, Cools, and Dullaert 2018; O´Leary 2017; Gupta 2017; Williams et al. 2013)
6 M. ATTARAN

Impact on the traditional supply chain and local sourcing, the technology could tear estab-
lished global supply chain structures apart and re-
AM technologies can affect supply chains in many
assembles it as a new, regional system. (Nyman and
ways, including increased production flexibility,
Sarlin 2014; Lipson and Kurman 2013). Furthermore,
reduced material waste, and the ability to decentralise
the technology creates a close relationship between
production. Several studies consider AM a powerful
design, manufacturing, and marketing. By manufac-
tool to reduce complexity in the supply chain in
turing items closer to their end destination, there is
a variety of ways (Janssen et al. 2014; Nyman and
the potential to reduce logistics costs and environ-
Sarlin 2014; Petrick and Simpson 2013). These
mental impacts. As a result, the use of this technol-
researchers believe that an essential benefit of the
ogy holds the potential to move some
technology lies in the consolidation of components
manufacturing away from low-wage countries and
into a single product, which consequently leads to
closer to the consumers. The technology could trans-
a reduction in inventory complexity. The removal of
form the global supply chain to a globally connected,
assembly and pre-assembly steps, and the potential to
but local supply chain (Attaran 2017a).
reduce the supplier base of the company have also
been mentioned as other AM benefits. They generally
agree that the impacts of 3-D printing could have Impact on global logistics
significant outcomes for the logistics and inventory
(Elms and Low, 2013). According to a recent study, 3D printing has the poten-
Companies are using AM to rethink their supply tial to reduce lead times, costs, dramatically, and over-
chains to improve performance in the following four hauls the logistics industry (Sethi 2014). A new sector
critical areas of cost, speed, quality, and environmental of the logistics industry would emerge dealing with
impact as summarised in Table 3 (Elms & Low, 2013). the storage and movement of raw materials such as
plastics, powder, glue, and ceramics which ‘feed’ the
3D Printers. With the increased popularity of 3D prin-
Impact on the global supply chain ters, the home delivery market of these materials
The impact of AM technologies on the global setup of would grow. 3D printing has the potential to reduce
supply chains can be very disruptive, as studied in the number of freight miles needed for shipping dras-
a few recent publications. AM has the potential to tically (Sethi 2014).
eliminate the need for both high volume production
facilities and low-level assembly workers, thus drasti-
Evolution of new supply chain model
cally reducing supply chain cost. Manufacturing can
take place almost anywhere at the same cost. As AM becomes more available, it will play a much
Thereby, it is no longer financially efficient to trans- more prominent role in future supply chains. AM
port products moving across the globe to get to the enables many new supply chain models, as sum-
customer. With the potential to support re-shoring marised in Table 4 (Sethi 2014). These new models

Table 3. Improving the traditional supply chain.

Key Factors Advantages
Cost Savings ● Eliminates the need for large bulk inventory
● Reduces transportation costs
● Reduces tooling costs
● Reduces assembly costs
● Eliminates penalty for redesign
● Reduces the size of an economic lot
● Price-competitive in markets with high labour costs
● Vetting out designs
● Simplifies production processes
● Reduces labour inputs, the required tooling and machining centres
● Enables economical mass customisation
Speed ● Eliminates the time lag between design and product
Responsiveness ● Shortens lead time
● Enables on-demand manufacturing
● Improves process flexibility
Quality ● Reduces production waste
Improvement ● Improves quality
● Incorporates customer feedback
● Provides more optimum products across many industries
● Eliminates excess parts that cause drag and add weight
● Manages demand uncertainty
● Improves performance by reducing supply chain risk
Environmental ● Improves sustainability
Impact ● Reduces negative impact on the environment
● Reduces carbon footprint
● Spurs the formation of a beneficial circular economy
Source: Elms and Low, 2013
 SUPPLY CHAIN FORUM: AN INTERNATIONAL JOURNAL 7

Table 4. Formation of new supply chain models.

Models Process Benefits Gained
Streamlined Logistics ● Manufacturers use 3D printing at their sites ● Reduced inventory levels
● Reduced warehousing requirements
● Decentralised manufacturing
Customer-Managed ● Suppliers installing 3D printing at the customer site ● On-demand manufacturing
Inventory ● Products and parts to be manufactured on demand ● Reduced lead times of production
● Reduced supply chain costs
● Customer empowerment
3D Printing Hub ● 3D printing services are offered in hubs like Kinko’s or UPS stores ● On-demand custom fit and styling
● Businesses or consumers can get their products printed on submission of ● Customer empowerment
their design ● Reduced delivery times
● Reduction in required inventory
● Increased on-time and in-full product
delivery
Source: Sethi (2014)

will have a potential tangible impact on the cost and a product is located along the supply chain, showing
capability of supply chains, such as drastically reduced handling history from provenance to delivery. Tagged
delivery times and increased on-time, in-full product parts can be tracked throughout the manufacturing
delivery. Supply chain networks will be simplified, with process along the production line and throughout
reduced warehousing requirements and a reduction in the assembly process. Table 5 highlights the transform-
inventory levels. ing impacts of IoT on supply chains.
Companies are using cameras along production
lines to measure the number of components in bins.
IoT-transforming supply chains A Just-In-Time (JIT) inventory management system
The Internet of Things (IoT) is the concept of connect- automatically places supply orders to refill the contain-
ing any device to the Internet or each other. Devices ers. Manufacturers use sensors to improve machines’
range from cellphones, wearable devices, industrial performance, extending their lives, and learn how they
equipment, appliances, and anything else that collects could be redesigned to do even more (Pettey 2019).
and transmits data via the Internet. The concept is Data captured from IoT sensors are used to predict
based on a general rule that ‘Anything that can be when equipment is wearing down or needs repair.
connected will be connected’ (Attaran 2017b). IoT This could reduce maintenance costs by 40 percent
emerges as a rapidly evolving technology that more and cut unplanned downtime by 50 percent. IoT sen-
and more industries are willing to adopt to improve sors can be used to keep track of usage, availability,
their efficiency. location, and maintenance of material handling equip-
IoT provides several great ways to help SCM and ment. Land Rover Group Ltd is using IoT sensors to
could have a broad and profound impact on the sup- keep track of vehicles as they leave the assembly line
ply chain in areas such as improved asset utilisation for testing and refinement and to reduce the labour
and higher uptime, improved end-to-end supply chain costs involved in looking for ‘lost’ cars. Airbus is
performance, supply chain visibility, and reliability another company that has been developing tools
(Pettey 2019). IoT provides visibility into field opera- equipped with IoT technology in its cabin to optimise
tions, supply chain, and remote or outsourced opera- supply chain processes. Real-time analytics provided
tions. IoT devices can immediately track where by IoT is enabling Airbus to improve quality and

Table 5. IoT in supply chains.

SCM Processes Key Benefits
Improved Asset Utilisation and ● Predicts when equipment is wearing down or needs repairreducing maintenance costs by 40% and cutting
Higher Uptime unplanned downtime by 50%
● Helps to improve machines performance, extending their lives and learn how they could be redesigned
● Provides accurate & timely asset tracking
● Enables usage-based design and pre-sales analytics
● Enables economical mass customisation
Improved end-to-end Supply Chain ● Optimises equipment use and inventory shorter lead time
Performance ● Enables on-demand manufacturing
● Improves process flexibility
● Adds intelligence to manual processes
Improved Supply Chain Visibility and ● A camera installed along production lines measures the number of components in bins and an inventory
Reliability management system automatically places supply orders to refill the containers
● Tracks where a product is located along the supply chain
● Reduces transportation cost
● Eliminates penalty for redesign
● Reduces the size of an economic lot
● Enables more economical packaging solutions
● Enhances visibility into customer needs
Source: Pettey (2019)
8 M. ATTARAN

productivity. Meantime, IoT installed in the cabin pro- share select information based on access management
vides passengers with a more personalised travel protocols.
experience (Airbus 2019). CCT enables more manageable and less costly digi-
talisation of supply chains. It enables start-up or smal-
ler companies to establish themselves in a short time
Challenges to IoT in supply chain
or develop their own DSCs capability without signifi-
IoT shows promising applications for supply chains, cant investment in infrastructure (The Centre for
but also the technology faces numerous implementa- Global Enterprise 2016). Cloud computing has the
tion challenges. The significant challenges for the sup- potential to speed up the pace at which new revenue-
ply chain not taking full advantage of IoT include generating products and services are introduced in the
security, privacy, and scalability. IoT is a wireless tech- market. It also forces companies with traditional supply
nology and applications are built on many sensor chains to reinvest in themselves. The technology has
nodes. As such, it poses some potential security con- the potential to makes supply chains more dynamic,
cerns to users regarding the compromise of data dur- more scalable, and more capable of supporting the
ing wireless transmission, storage of data, and security financial objectives of the shareholders (Li 2011).
of storage sites. In some cases, the data collected by Results of a 2016 empirical research showed that
IoT are highly sensitive, could have profound social cloud computing played a crucial role almost in all
implications, and are protected by legislation. supply chain processes. Respondents of the study
Without safeguards in place, RFID technology has the were able to reduce costs and gain competitiveness
potential to compromise consumer privacy and threa- by using CCT for information sharing on stock level,
ten civil liberties. IoT systems will also have to be transport, and warehouse capacity availability within
scalable and adaptive enough to provide tailored solu- DSCs. Moreover, CCT enabled digital processes and
tions equally efficiently in both small scale and large- value propositions and increased the modularisation
scale industries (Balamurugan, Ayyasamy, and Suresh and scalability of products, processes and facilities in
Joseph 2018). a supply chain. Respondents also indicated reduced
inventory levels and increased stock rotation
(Nowicka 2018). Another study highlighted benefits
Cloud computing technology and supply
from CCT to include increased business agility, flexible
chains
capacity, and faster adaptation on new technology.
In recent years, many companies have turned to the Additionally, the study revealed the significant advan-
Cloud Computing Technology (CCT) as a cost-effective tages of CCT as improving the company’s forecasting
way to run applications, store data, and accomplish and enabling more in-depth collaboration with suppli-
other IT tasks. CCT is slowly emerging as a valuable ers’ partners (Harvard Business Review 2011).
way to improve internal efficiencies, including capital
investment savings, simplified operations, scalability,
Advanced analytics and supply chains
improved information visibility, sustainability, and fas-
ter deployment (Folinas, Manijas, and Graham 2013; Massive amounts of data being created through the
Shacklett 2010; Schramm, Nogueira, and Jones 2011; world are unprecedented. Most of this data are avail-
Marston et al. 2011). CCT focuses mainly on services, able in real-time and can be used by enterprises to
rather than technology. Technology, including, sto- make decisions on product designs, manufacturing,
rage, CPU, networking equipment, is not the service, distribution, and sales. Most importantly, there is an
but the building blocks for a service. Consumers can influx of data from mobile users, including searches
place service requests via self-service and are billed for and mobile orders. These mobile sources of data need
what they use (Attaran 2017c). to be integrated with other data sources and be ana-
lysed by analytics tools to improve supply chain
effectiveness.
CCT is transforming supply chains
Expected effects of big data on industrial operations
Among the many incentives for using the cloud, supply and its organisational implications of the digital trans-
chain management stands out. CCT is used in supply formation in industrial practice have been documen-
chain processes related to cooperation and informa- ted in several studies (Gölzer and Fritzsche 2017).
tion sharing (i.e. Customer Relationship Management,
Supplier Relationship Management, or Customer
Analytics roles in supply chains
Service Management). CCT has enabled companies to
connect their supply chain with the supply chains of Analytics techniques have been around for decades
their suppliers and customers together in a single net- and have been used to turn flood of unstructured,
work that optimises costs for everyone involved. semi-structured, and structured data into insights.
Interconnected databases, too, can automatically Analytics tools have been used in solving
 SUPPLY CHAIN FORUM: AN INTERNATIONAL JOURNAL 9

manufacturing challenges, including demand forecast- (2) Gained competitive advantage – Analytics tools
ing, integrated business planning, supply collabora- enable businesses to know more about their
tion, and risk analysis, and in inventory management. customers and their competitors. The knowl-
Supply chain professionals have used predictive analy- edge gained from convincing, context-specific
tics to improve supply chain efficiencies. Predictive analytical insights allow organisations to gain
analytics can help manufacturers to satisfy the increas- distinct competitive advantage.
ing demands of consumers who expect products deliv- (3) Process optimisation – Supply chain leaders can
ered precisely when promised. Companies can use the use analytics tools to ask complex questions
insight provided by analytics to make better decisions about operations, create what-if scenarios, and
regarding what their customers are asking for now and evaluate possible outcomes without affecting
will be asking for in the future (DeAngelis, 2015). live processes and waiting for the results of
Analytics tools have also provided companies with their changes.
the ability to gather data about how well each compo-
nent in the supply chain demonstrates corporate social
Immersive technologies and supply chains
responsibility. This transparency has encouraged sup-
ply chain partners to develop and share best practices Virtual Reality (VR) and Augmented Reality (AR) are
for green operations and logistics. Supply chain part- among the fastest-growing technologies, and they
ners can demonstrate compliance with industry best both will be part of our daily lives. These two technol-
standards for worker safety, environmental protection ogies are fading the boundaries between the digital
and business ethics (Aslinda Abu Seman et al. 2019). and physical worlds. They are adding layer upon layer
Expected effects of investing in data analytics in of digitised overlaid information to the world around
SCM have been documents in several studies. They us, making it rich, meaningful, and interactive.
include reduced outbound inventory, lower SCM risk, Consumers are eager to use AR and VR technology
shorter delivery times without increasing inventories, for shopping purposes. Retail offers several commer-
improved transport routing, and optimised batch sizes cial applications of VR. For example, VR heat mapping
for ordering, production, and shipment (Gölzer & technology tracks a shopper’s movement in the store.
Fritzsche, 2017; Kearney 2015). The information provides a detailed pattern of which
Table 6 highlights the advantages of analytics in areas or products attract customer attention. This
logistics and retails gained by different companies. information helps retailers to test and refine store dis-
Following is a summary of analytics potential for plays and layout to optimise customer experience and
improving SCM (Dubey et al. 2017; Lebied 2016): spending. Retailers are also using AR technology to
provide an amazing and exciting shopping experience
(1) Improved strategic planning – Having advanced for their customers. The Amazon AR app let customers
analytics with constant visibility into operations view a virtual version of hundreds of real-world pro-
creates continuous insight. It allows supply ducts and visualise what they would look like in their
chain managers to identify whether overall home (Arnold 2018).
goals are met and how to adjust them as neces- Similarly, Ikea app called Ikea Place allows custo-
sary and on an ongoing basis. mers to see what Ikea furniture would look like at
home. Additionally, Ikea VR called Ikea Steam helps
customers discover kitchen features. It allows users to
Table 6. Application of analytics in supply chains. walk around and interact with objects in a virtual
Industry Organisations Applications kitchen (Arnold 2018). At Low’s, homeowners can use
Logistics ● UPS ● Determines the best routes to ship, the an Oculus Rift head-mounted display to virtually
● DHL best suited time to deliver, the best mode
● FedEx of transport to choose explore their ideal bathroom or kitchen (Simsek
● Improves supply chain management and 2018). Shoppers who walk through the American
analytics
● Increases asset utilisation Apparel store can use their smartphone and scan
● Reduces downtime images and barcodes of an item to view colour, size
● Prevents equipment failures
● Lowers maintenance costs options, and product variants. Sephora launched an AR
Retail ● Target ● Determines customer responses or pur- tool named ‘Virtual Artist’ uses a combination of facial
● Tesco chases and set up for upselling and cross- scanning technology and AR to help shoppers virtually
selling opportunities.
● Improves merchandising and market bas- try on makeup (Arnold 2018).
ket analysis The ability of AR and VR to display data in 3D dis-
● Predicts trends, recommends new pro-
ducts–and boosts profitability. plays offers detailed and engaging data visualisation
● Enables events and behaviour-based techniques. Using the virtualised platforms, users can
targeting
● Improves market and consumer view, analyse, and work collaboratively on their data in
segmentation their own virtual space. AR can assist workers in manu-
Source: Kearney (2015) facturing by providing real-time information on
10 M. ATTARAN

machinery malfunctions, maintenance issues, and (3) Long -Term: Collaborative use of RFID informa-
safety warnings. AR and VR allow supply chain busi- tion can help supply chain partners put the right
nesses to enhance employee and customer digital item in the right place at the right time and for
experience. These include enhanced repair and main- the right price. And demand-driven, product
tenance capabilities in manufacturing, warehousing, fulfilment systems can link consumer behaviour
and logistics. These immersive technologies also will back into inventory planning and logistics.
help provide better product visualisation for customers,
and better store layout and planning for retailers. Several studies have investigated significant benefits
AR/VR can help improve supply chains in different that businesses can obtain by embracing RFID technol-
ways as listed below: (Saunders 2018): ogy in their supply chain management (Reyes et al.
2007; Hou and Hung 2006). We have chosen and iden-
(1) Enable managers to get a real-time look at man- tified ten significant RFID benefits or success variables
ufacturing facilities, distribution centres, and and listed them in column 2 of Table 7. We have
warehouses at any time to ensure that processes categorised these benefits into five major key pro-
are running as planned. cesses where RFID creates the most value in the man-
(2) Improve the order picking process by making it agement of the supply chain. They are listed in column
fast and less prone to error. Smart glasses enable 1 of Table 7.
employees to see exactly where items should fit
on carts while they are picking orders.
(3) Make the delivery processes more efficient and A conceptual model for achieving long-term
improve on-time delivery by providing the best DSC transformation
transportation routes. Smart glasses show Not all organisations experience success in implement-
employees the most efficientpath through the ing digital supply chain transformation projects. Any
warehouse. adjustments to streamline supply chain management
(4) Improve transparency by providing detailed processes should be carefully planned. When initiating
information on all packaging and contents. change and optimising for success, it’s best to focus on
(5) Reinforce security by using facial recognition establishing a proactive approach, bringing about
technology to confirm customer verification a more streamlined supply chain system. All too
often, organisations overly concentrate on technology
RFID and supply chains rather than on the people using the methods.
Technology, in and of itself, will never be the solution
RFID uses single-chip radios and provides the tagging to all problems. As with any new investment, the key is
of physical objects – people, places, and things so they to ensure that selected technology reflects the overall
can interface with computers. RFID can provide more business strategy and that it will significantly add value
information than bar-coding. This information can be to the business (Perks, 2015).
used to improve inventory management at the retail Adopting digital technology to improve supply
store and along the supply chain. RFID can revolutio- chain performance is a multi-step process. Several
nise the way the supply chain meets customer expec- strategies can help in establishing a solid foundation
tations by offering direct insight into consumers’ for long-term digital transformation success (Meffert
buying habits and increasing efficiency and accuracy 2017). Gartner recently conducted a 12-month survey
within the supply. The technology could dramatically of enterprises with cloud management strategies and
improve supply chain performance by reducing inven- identified the three phases of cloud adoption strategy
tory levels, lead times, stock- outs, and shrinkage rates. (Smith 2016). We adopted this model and modified it
It can also increase throughput, inventory visibility,
inventory record accuracy, order accuracy, customer
Table 7. Supply chain management processes and RFID
service, quality, and collaboration among supply benefits.
chain members (Attaran 2012). In general, RFID tech- Processes RFID Benefits
nology could generate business value at three levels Demand Management ● Speedy and accurate information
for any SCM: retrieval
● Better Decisions
Order Fulfilment ● Enhanced visibility along the supply
(1) Immediate: RFID readers can read multiple tags chains
● Better quality information
simultaneously, without requiring line of sight ●
Manufacturing Flow Accurate asset tracking
or human involvement. This can cut checkout, ● Enhanced process automation
inventory control, and loss prevention costs. Reverse Logistics ● Improved productivity
● Improved quality and reliability
(2) Short-Term: RFID can improve supply chain per- Supplier Relationship ● Reduced operating costs
formance through asset tracking, product origin Management ● Improved competitive position
tracing, and product recall. Sources: Reyes et al. (2007)
 SUPPLY CHAIN FORUM: AN INTERNATIONAL JOURNAL 11

to fit the leading-edge DSC transformation initiative sure that employees are technology savvy and under-
described below: stand the technology and its implications for the
enterprise.
Phase 2: Internal Process Evaluation. Executive or
Implementation phases relevant employees should work with the CIO to ana-
Phase 1: Discovery Phase. An essential step for the lyse the internal processes that will be affected by the
successful implementation of digital technology is selected digital supply chain solutions. This might
opening the minds of managers and employees. The bring to light the need to flatten, reconfigure, realign,
executives have a pre-eminent role in driving the digi- refine, or eliminate inefficient processes and target
tal transformation process. They need to embrace repetitive manual processes for automation.
technology and make it a priority. They need to take Eliminating material waste is a tangible benefit that
a hard look at their business and consider their objec- supports the business case for incorporating digital
tives – define business cases, solutions, strategy, and supply chain technology. Further opportunities to
roadmaps. Is their aim to simply improve supply chain reduce assembly steps, thereby simplifying the pro-
performance while operating within the same organi- duction process and their associated costs are incre-
sation design? Do they wish to improve their existing mental to the material cost savings.
supply chain performance by making incremental Companies should decide the types of security that
changes? Or do they want to fundamentally change will be applied to the deployment. They should enable
the way they produce and deliver their products to end and bring together user-friendly systems, data integra-
customers? The supply chain strategy should set clear tion, social, mobile, analytics, and cloud computing
priorities for the roles and relationships of each depart- technologies to create a digital workplace that
ment. It is essential to define a clear business case and responds to the informational needs of employees.
determine timings for the enterprise’s digital technol- Companies should also integrate social collaboration
ogy strategy. Executives need to communicate to the technologies such as voice, video, messaging, and
organisation consistently. They need to empower peo- workspace tools to make knowledge sharing more
ple who help drive the transformation and sideline effective. Finally, companies should provide the requi-
people who are in the way. The Business should iden- site platform to access and secure information across
tify which digital services, workplace tools, and solu- multiple devices and channels.
tions meet the company’s needs. Phase 3: Adopt, Enhance, and Transform.
Answering the following questions would be help- Companies should continually enhance existing proce-
ful during the discovery phase. (Blockgeeks 2019): dures, maximise the adoption of digital technology
solutions, and ensure user adoption. Companies
● Is your company ready for incorporating the should continually exploit new opportunities and deli-
technology? ver a consumer-like experience and a consistent user
● Does your company deal with vast amounts of experience across multiple platforms for internal
data where time and speed are essential? employees. Corporations should simplify the organisa-
● Does your company use the third party for most tional and cultural changes that hinder the adoption of
of its operations? digital technology. They should engage with employ-
● Can your company handle the costs associated ees to understand their needs and articulate how the
with digital technology integration? digital technology enables them to work productively.
● Will your existing business process be able to Firms must ensure employees have access to training
handle disruption? that allows them to use the technology solutions to
● Will your employees and managers be able to their advantage, and that technical personnel and trai-
adapt to this change? ners adequately trained to support the digital
● Should you move slowly or change the entire technology.
infrastructure of your company by introducing In the environment where data is continuously
new technology? changing, the assessment of available data sources,
estimation of available data volume and composition
Successful implementation of digital technology are crucial. Executives need to institute solid data gov-
requires training of managers and IT staff. It is vital ernance practices to guarantee that the quality and
that managers and leaders of the various divisions consistency of the data sets in their analytics systems
understand the technology and know-how it is going remain at an acceptable level. Additionally, firms must
to change the processes inside the organisation. provide policy training for employees on the types of
Software developers and IT consultants must also information they should or should not share, on the
have the coding skills necessary to build and maintain handling of personnel data, and on the avoidance of
the proposed digital technology. Additionally, make potentially damaging their organisational data.
12 M. ATTARAN

Guarantying digital transformation success smoother implementation of supply chain manage-

ment improvements.
According to Forbs, 84 percent of technology transfor-
This study also confirmed that there are barriers to
mation efforts fail. A 2017 survey showed that many
the successful digitisation of supply chain and procure-
organisations consider technology transformation as
ment processes. These technologies create disruptions
an integration of digital technologies and merely as
and require companies to rethink the way they design
IT transformation (Solis and Littleton 2017). Their
their supply chain. Digital transformation is an ambi-
objective is to optimise IT services for organisational
tious undertaking. To make it work and to succeed in
needs, and they do not recognise that a successful
the long-run, companies need discipline, planning, and
technology transformation is, first and foremost,
committed top-down leadership. Successful change
a cultural and organisational transformation rather
initiatives, including DSC implementation, require
than a technology-driven endeavour.
businesses to develop and realign priorities and oper-
Effective technology transformation requires busi-
ate with a sense of purpose and urgency. This paper
nesses to develop and realign priorities and operate
also delivers condensed information for practitioners
with a sense of purpose and urgency (Solis and
regarding the adoption of an integrated approach for
Littleton 2017). Implementing a leading-edge work-
design and implementation of DSC in their organisa-
place technology transformation – including imple-
tions. Practitioners could consider the critical success
menting digital technology enablers discussed in this
factors, discussed in this paper, to improve the chances
paper – requires managing change effectively. Many
of successful adoption and implementation of DSC.
organisations fail at change because leaders have not
given change management the proper attention.
Ineffective change management can affect employees Future directions
negatively and makes the next change objective much
As technology changes the world around us, society
more challenging to implement. Additionally, the fear
will come to rely more and more on high-speed, low
of managing change is a leading cause of anxiety in
latency, secure connectivity that is ubiquitous and reli-
managers. There are several models for successful
able. The latency and speed limitations of current
change management discussed in different research
technologies (4 G and wired networks) are the predo-
papers (Marek 2017; Dery, Sebastian, and Van Der
minant reasons hindering the ability of enterprises to
Meulen 2016; Dority 2016).
move towards a decentralised workforce. Fifth-
generation cellular networks (5 G) will deliver mobile
data services that will always be available to customers
Summary and conclusions
where and when they need them. Commercial 5 G
Companies around the world consider ways to networks will be widely deployed by 2020; that will
improve supply chain performance as a means to herald in an era when the vision of ubiquitous Internet
reduce operating costs, improve margins, retain and access is close to reality. Technologies like hyper-fast
increase market share, and increase responsiveness to 3D printer, an AI-powered 5 G security camera to
customers. Companies wishing to improve their exist- replace front desk staff, and AI-powered conference
ing supply chain performance have to rely on technol- room will enable ultra-smart workplaces. The increased
ogy to deliver a higher level of performance in speed of 5 G combined with its lower power consump-
satisfying consumer needs. In the last few years, sev- tion and ability to move large amounts of data with
eral technologies have emerged that are altering tradi- minimal delay is fulling many technologies and makes
tional supply chain operations. This study discussed them real.
a range of existing and emerging digital solutions Technologies for digital transformation and intelli-
available for real-time inventory management, trans- gent automation will create smart buildings. These
portation, and asset transference monitoring. This smart buildings will make workplaces fully wireless,
paper revealed the significance of several enabling allow autonomous cars to continually communicate
technologies to the digitisation process. The findings with their surroundings, enable both co-bots working
indicate that digitisation of supply chains and procure- with humans on factory floors and life-saving surgical
ment process can yield several benefits including robots, and make AR and VR office meetings and com-
greater transparency and better SCM decisions, munications possible. These technologies will continue
increased SCM flexibility, improved asset utilisation to transform corporate infrastructure maintenance and
and higher uptime, lower warehousing and inventory security, asset monitoring, and goods delivery in the
costs, lower supply chain risk, more efficient delivery, last mile.
reduced number of freight miles needed for transpor- 5 G will be a major technology for growing industry
tation, and more efficient inbound supply chain. digitisation and will likely address numerous chal-
Moreover, advanced analytics and notification systems lenges faced by different industries due to industry
offer high accuracy and valuable insights and allow for trends. It will provide the networks and platforms to
 SUPPLY CHAIN FORUM: AN INTERNATIONAL JOURNAL 13

drive the digitisation and automation of industrial Attaran, M. 2017b. “The Internet of Things: Limitless
practices and processes of Industry 4.0. It will support Opportunities for Business and Society.” Journal of
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Influencing the Digitization of Procurement and Supply
No potential conflict of interest was reported by the author. Chains.” Business Process Management Journal 24 (4):
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Mohsen Attaran is the 2004–05 Millie Ablin Outstanding Bonkenburg, T. 2016. “Robotics in logistics. March.” DHL
Professor of Management at California State University, Trend Research. Accessed 14 September 2019. https://
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services. He is the author/co-author of four books, over one Brandon, D. 2016. “The Blockchain: The Future of Business
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