Eight Key Supply Chain Management Terms
Eight Key Supply Chain Management Terms…and why you should care about them While there are many buzzwords to sift through in this world, we are especially interested in the terms surrounding our business of supply chain management (SCM). Since these terms are making a large impact on our industry, we compiled a list of the most important buzzwords in the supply chain management world. Get to know these words because they are likely here to stay and will impact your business: Blockchain – “Blockchain,” also called distributed ledger technology (DLT), is a popular buzzword that is often considered to be a cure-all for supply chain transparency problems. In simple terms, a blockchain is a list of data records, or “blocks” that are connected by cryptography, which is used to protect data integrity. The blocks contain also contain a timestamp and transaction data. While the effectiveness of Blockchain technology is often debated in SCM circles, a few of blockchain’s clear benefits include: increased transparency, enhanced security and the ability to build decentralized business networks. Visibility – “Supply Chain Visibility,” including inventory visibility, provides a clear view of an entire supply chain. Supply chain visibility allows managers to accurately monitor all supply chain activities, including the entire lifecycle of products. This provides valuable data on inventory, where it is located, and who is handling it at any given time. Traceability – Traceability is defined as the ability to track the end-to-end movement of an individual item from its origin to the end of its useful life, including where the item’s parts and materials originated, who handled it along the way, and everywhere else it goes on the way to its final destination. This one-up, one-down visibility utilizes location services to track components through manufacturing to the product’s delivery to the customer. Sustainability – Sustainability measures a supply chain’s environmental impact, including risk and waste. Businesses are facing growing pressure to focus on implementing environmentally-conscious practices into their supply chain management.. Digitization – Digitization means that the supply chain is fully transparent to all partners – from the suppliers of raw materials to the end consumer. Digitization can greatly improve customer service and overall efficiency. Internet of Things (IoT) – The “Internet of Things” refers to internet-connected devices, including mobile devices, robots, RFID tags, and machines. This IoT network has the potential to greatly improve inventory management accuracy and enhance visibility. RFID – RFID is an acronym for “radio-frequency identification,” referring to a technology that uses digital data encoded in RFID tags (or smart labels) that are captured by a reader via radio waves. RFID technology is almost identical to QR and 2D codes with regard to the amount of data it can hold, although RFID requires additional specialized hardware to access the data. AI (Artificial Intelligence) – AI (Artificial Intelligence), commonly known as “machine learning,” has quickly made its way from labs to supply chains. AI, which has drastically changed supply chains, makes up for the lack of human knowledge with machines. AI is capable of greatly improving supply chain efficiency through more effective decision making, data output and forecasting.