Unlocking the future value network with digital supply chains

7th Sep 2015

The more I talk to our clients, the more evident it is that their customers are expecting them to be always-on and accessible across channels. My response is always the same, “You have a choice: to respond instantly and convert them to ambassadors over time, or ignore at your own peril”.

From car makers, eager to help customers with service reminders, to retailers targeting audiences with custom offers over mobile apps — just about everyone seems to be getting on the Digital bus. That is, if they aren’t already on it. A quick Google search brings up a bunch of success stories of businesses cashing in on social, mobile, analytics, Internet of Things and cloud.

How can supply chains benefit from the transformation?

Speed-to-market is even more critical to your success than it was, perhaps five years ago and superior supply chain capabilities are the key to that success. And the basis of those superior supply chain capabilities seems to be data.

Not that data, big or fast, is a problem for supply chain leaders. But access to the right data at the right time and place is something several enterprises are grappling with. In fact, businesses are looking beyond the traditional (i.e. canonical, unified) corporate view offered by traditional enterprise resource planning (ERP) solutions, as it undermines the diversity and speed of information flows in modern supply chains. Unless you get the data you need to respond to the opportunity at hand, it’s just raw information. Indeed, data delayed is visibility denied and opportunity lost. This is where dedicated supply chain analytics can help over ERP and master data management (MDM).

Another supply chain challenge that I regularly encounter in my conversations with clients is the ability to predict downtime and regulate productions lines or shipments.  Industrial asset management can do just that and more. It can potentially reduce volatility by mitigating adverse supply chain events, even before they strike. No monitoring framework can insulate a supply chain from volcanic explosions in Iceland, but digital supply chains can certainly help minimize downtime risks.

I am convinced that in order to maximise the potential of digital supply chains, businesses must balance investments in incremental process improvements with the potentially more fantastic “moonshot” concepts. Additionally, control towers, dynamic inventory and replenishment planning, cloud-based order allocations, and last mile delivery must be aligned to a broader digital strategy and not seen as isolated components.

Operationally, a digital supply chain is all about implementing digital capabilities along the organizational layers of governance, processes, data and performance management, and technology. It can both benefit from and contribute to the Digital Transformation agenda by integrating and standardizing processes.

To my mind, the outcomes are pretty straightforward: sustainable cost savings, better relationships with partners, improved visibility, and reduced volatility.

Raman Katyal, vice president, head-supply chain practice at Capgemini.

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