September 16, 2020
By Khaled Al Shami, Director, Solution Consulting, Middle East & Africa, Infor
Spending on digital supply chain and logistics in the Middle East, Turkey and Africa (META) is forecast to reach $8.5 billion during 2020-23, with digital transformation in the sector driven by a range of trends including changing consumer habits and the rise of e-commerce, the encroachment of producers into the logistics space, changing demands from retailers, and the impact of COVID-19 on the overall sector, according to a new white paper by IDC and sponsored by Infor.
The white paper outlines some of the key challenges that distributors and logistics providers face and discusses the potential solutions that can help players position themselves for success in a fast-changing landscape that is increasingly defined by data and automation.
Distributors serving highly time-sensitive sectors, such as food and beverage, have faced significant upheaval, which has been further exacerbated by the COVID pandemic. Indeed, they face tighter service-level agreements, high transportation costs, and have an innate need for fast-paced distribution methods. An increasing number of regulations is compelling distributors to optimize product shelf life, manage seasonal changes in supply and demand, and guarantee end-to-end traceability of products across the value chain.
But the good news is that distributors can address these challenges, while also providing fulfilment and delivering scalable experiences, by leveraging data and automation. Many forward-thinking distributors have already started to digitally transform their operations, elevating data and automation as central pillars. However, with the datasphere expected to exceed 110 zettabytes by 2024, with real-time data growing at 1.5 times the rate of overall data creation according to IDC, it is imperative that organisations are able to extract the right information at the right time.
Distributors can look to implement digital supply chain and logistics programs that address four key aspects of distribution businesses: smart warehousing, inventory optimization and extended planning, smart product management, transportation optimization. However, these programs rely heavily on the power of technologies such as IoT, AI, Big Data analytics (BDA), robotics, mobility, and blockchain, and most distributors struggle to incorporate these technologies into their existing IT environments, according to IDC.
The distributed nature of business operations and the need for data-driven experiences make cloud computing one of the most important considerations for distribution players, with a digital platform in such an environment requiring the speed, agility, scalability, and flexibility of cloud to produce the intended results. Many organizations, therefore, are considering a cloud-first approach for new applications and moving existing applications to cloud. Enterprise IT infrastructure is increasingly becoming a connected distributed cloud that includes publicly hosted systems, enterprise data centers, and edge locations.
But when selecting technology, it is important for players in the distribution business to choose vertical-specific platforms rather than horizontal applications. Because vertical applications are built to address the unique requirements of an industry, the need for expensive and time-consuming customizations diminishes, according to IDC.
Such applications have inbuilt industry-specific capabilities that deliver targeted intelligence, industry context, and actionable analytics and guidance to users. IDC believes that distribution organizations that use integrated platforms and cloud-based, vertical-specific applications will be the most likely to digitally transform themselves in three to five years and emerge as true digital pioneers.