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Supply Chain and Digital Transformation in Japan
The new reality is characterized by a complex, dynamic environment, highly competitive business conditions and digitalization. Digital transformation as the highest level of digitalization is an emerging phenomenon that affects many aspects of life. Today, more and more attention is paid to supply chain management (SCM) to enhance the competitive advantage of enterprises, effectively control costs, and achieve customer satisfaction. SCM is essential for manufacturing companies to gain a competitive advantage through maximizing customer value (Christopher, 2016; Kamath, 2016). SCM has emerged as a cornerstone of manufacturing and has become one of the most important means for manufacturing companies to gain a competitive advantage (Rusli, Rahman, Ho, & Abdullah, 2013).
Supply chain processes are heavily influenced by digitalization. Digital transformation is pushing companies to become agile to quickly identify, respond and adapt to changing expectations and demands of consumers, employees, and other elements of business environment. It became obvious that the shift from a traditional supply chain to a digital supply chain appears as a competitive advantage creating sustainable value for organizations (Ageron, Bentahar, & Gunasekaran, 2020). Supply chain digital transformation is proven to drive growth, mitigate risk, and optimize costs (Gartner, 2020). Several industrial reports have introduced a digital transformation as an important trend for supply chain management in the next five years.
Traditionally, in supply chain raw materials are sourced and products are manufactured in one or more factories, shipped to warehouses for storage, and then delivered to retailers or end customers. Therefore, an effective supply chain strategy considers interactions at different levels of a supply chain and requires reducing costs and improving service levels. Consumers’ expectations are growing, and their loyalty and support are volatile and difficult to secure, hence, companies must encourage innovations and embrace new realities imposed by digitalization. In addition, challenges related to natural disasters also affect supply chains and should be considered in the context of Japanese business.