Digital transformation can’t wait until you’re ready! Going digital has been a buzz word in business for years. The trend to make everything digital was sped up by the COVID-19 pandemic when most businesses were forced to use digital means to continue working during the early days of the pandemic.
Wherever you were on your technology journey at the start of 2020, COVID-19 has likely caused sizeable changes in your business. Going digital was positive on the business environment in many areas, unfortunately there have been some not so positive changes on business that have come from the pandemic. One difficulty that emerged from the pandemic is the strained supply chains both globally and nationally. Business are finding ways to use the positive digital environment to work through the negative supply chain issues.
These heightened risks and uncertainties require high-level, real-time visibility into your company’s supply chain — from beginning to end. This tends to be difficult to achieve with simple spreadsheets or old-fashioned paper documentation. That’s why more and more businesses are digitizing their supply chains to improve oversight, increase efficiency and manage risk.
Handling the chain
Generally, companies are automating three key business areas:
- Accounts receivable, and
- Inventory management.
To do so, they’re implementing the technological tools necessary to better communicate and coordinate with all parties along their supply chains.
One such tool is supply chain management (SCM) software. Also known as logistics software, SCM solutions help manage how and when materials, products and equipment are procured. This type of software is most prevalent in the manufacturing and distribution industries. However, a carefully chosen and scaled SCM solution could help many types of businesses predict demand spikes, mitigate inventory and labor shortages, and better manage transportation issues.
Managing the risk
For more in-depth supply chain monitoring, another tool to consider is supply chain risk management (SCRM) software. You can use SCRM solutions to ensure you’re working with vetted suppliers and independent contractors who have the proper insurance, training and qualifications. Typical features include:
Supplier/contractor evaluations. Create standardized assessments and customize question weights and thresholds based on relevance.
Risk management. Monitor suppliers and sites, configure risk scores, get critical failure points, and track risk-mitigation progress.
Mapping. Visualize your supply chain using maps, assess potential vulnerabilities and prioritize supplier workflows.
Event monitoring. Track events across the supply chain and create “what if” scenario modeling. Users can load sites and points of interest, as well as monitor local impacts via news outlets, social media and regulatory agencies.
Investing in any type of software calls for a close and careful look at your company’s needs, users, security risks, and the short- and long-term costs involved. That said, maintaining a strong supply chain is imperative in today’s business environment and the right technology could help. Let us assist you in weighing the risks vs. advantages of any technology investments you’re currently making or considering. Contact your Rudler, PSC advisor at 859-331-1717.
RUDLER, PSC CPAs and Business Advisors
This week's Rudler Review is presented by Lisa Dooley, CPA and Janna Fitzwater, CPA.
If you would like to discuss your particular situation, contact Lisa or Janna at 859-331-1717.
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