The Digital Supply Chain

Is your organization moving forwards or backwards?

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There is a real focus within many of the organizations that I talk to around how to use analytics to drive demonstrable business value across their supply chain operations. Of course this is nothing new and it isn’t unique to the supply chain but it’s fair to say that the characteristics and challenges faced in providing insights across multiple data sources for processes that often straddle many functions and lines of business does make this particularly challenging for supply chain professionals.

I was recently looking at the Supply Chain Digest Business Intelligence Benchmark Report 2015 which highlights the current and future state of supply chain analytics. I wanted to gain a perspective on where leading companies see the challenges and the areas where they are investing their focus and efforts. The big theme, not surprisingly, surrounds the need to go digital – or as the report says “go the way of the dinosaur”. Digital is a fairly generic concept in my experience and like many similarly evolving concepts that interest us in the supply chain, you need to be specific about what it means and more importantly what it requires before you can think about your current and desired capabilities.

The report does a nice job of capturing perspectives from McKinsey and PwC among others but also points out the lack of a universal definition leaving the question open around what it means to become a digital business or run a digital supply chain. There are some universally accepted key components such as mobility, the Internet of Things, the cloud & big data and others. Also worth noting is the ability to better leverage the information the company often already has for insights, analytics, internal/external collaboration, improved decision-making and much more. Critically the report makes the point that “with the explosion of data coming from point of sale and other demand points, social media, a rapidly expanding number of connected 'things' and more, the ability to harness that data into actionable intelligence really may be the defining capability of a digital business” – interesting stuff….

Like so many business areas, it is increasingly difficult to get a competitive advantage and to differentiate your business in areas where the bar keeps moving – you never stand still; you are either moving forwards or backwards.

One of the challenges of any survey is that “you don’t know what you don’t know” so when asked to rate your performance in a particular area it’s not easy to assess whether you have some, good or advanced capabilities. The survey points out that like the concept of the digital supply chain, advanced analytics also lacks a precise definition and consequently the study shows a correspondingly lower proportion of respondents saying they have an advanced capability.

The challenge for supply chain professionals will continue to be how they drive performance improvements in a world which is not only extremely commercially challenging but also faces high levels of technology, environmental, political and social disruption. Some analysts refer to the creation of new business designs which blur the digital and physical worlds…disrupting existing business models.

There’s a number of very interesting insights coming from the Supply Chain Digest survey which I plan to cover in subsequent blog posts.

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