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Should you digitize your supply chain?

Monday 08/06/2020
Should you digitize your supply chain

Supply chain planning is going to be transformed and will benefit from the technological revolution, so the answer to the question ‘should you digitize your supply chain?’ is definitely ‘yes’.

  • How do you choose and implement the right technology to improve your business?
  • What to take into account in order to build a digital supply chain roadmap?
  • Is your company ready to face the transformation?

The challenge you face, is not to be overwhelmed by buzz words and to keep your focus on a smart digital supply chain strategy. Technology should support your supply chain processes, not vice versa.

Artificial intelligence, machine learning, Internet of Things, augmented reality, demand sensing, blockchain, big data… have entered the supply chain the past few years, with varying degrees of success – sometimes even failures. Reinventing the wheel is a waste of time and energy, so it is highly recommended supply chain professionals are up to speed with many concrete digital use cases in various business areas across different industries.

Where do you get started? How not to get lost in this maze of buzz words, technology and data privacy regulations?

Here’s an approach to keep oversight:

Build a digital supply chain Roadmap

Business roadmaps come in all kinds of color, format and style. But when it comes to digital supply chains, roadmaps should be a blend of business transformation, data governance and core technology. Your roadmap needs to be an integral plan which defines a vision for supply chain transformation. It should go broader than just the technology. It has to map out very clearly the business processes you need to improve and the technology and data standards you will use. To that effect, you have to bring together a cross-functional team of experts who cover all three domains: supply chain know-how, data stewards and technologists.

Implement technology platforms

The digital revolution of supply chain processes is a challenge, just like any other revolution. So starting small is a good practice when embarking. There’s a clear upside of this digital era: to get you started, technology cost tends to be lower compared to the software waves of the past (think about ERP). You can easily start cloud solutions and IoT projects as small-scaled initiatives, trying to bring value into very specific supply chain aspects, such as demand forecasting or real-time inventory visibility across some specific node of the supply network that remained out of reach until now. So, while it is important that you build and update a Digital Supply Chain Roadmap, it is also essential you are realistic when you determine the scope of the first few pilots and processes you plan to digitize.

Data science and data crunching

There seem to be almost no limits to the improvement potential of new technology to supply chain management. If the right data is available, you can use it to drive or optimize any supply chain challenge. You can also use it to automate many of the repetitive tasks that today still nibble away lots of time of supply chain professionals.

Very promising for supply chain management, are the applications to improve demand forecasting – a key ingredient to provide better service level to the customer, with optimized inventory levels across the value chain.

But there is more. Every other day, an increasing number of data sources becomes available for supply chain planning & optimization. Connecting supply chain systems to these nes data sources will change business for ever. Think of improved and automated maintenance planning based on equipment sensor information. Think of demand forecasting using AI and machine learning techniques. Think of real-time workforce planning, transportation optimization, warehouse automation… Think of an inter-connected global network of supply chains, with better visibility.

Supply chain transformation

Ready to change your supply chain? Pay special attention to:

  • Your organization and stakeholder communities (employees, suppliers, customers…) Collaboration will be key. Remember Supply Chain is the art of gradually removing walls between teams, departments and companies.
  • The documentation of your business processes. As machines will gradually take over repetitive tasks in your supply chain processes, you want them clearly and accurately documented. A deep understanding of what the business process actually is, is a must.
  • Technology and data standards: only qualitative data lead to successful digital improvements. Data is an important company resource and needs to be managed accordingly. Data stewardship and data governance should be high on your agenda.
Contact one of our experts
Joël Wijns
Joël Wijns
Partner Business Consulting