Digital Supply Chain – Fact or Fiction?

We’ve all heard or read about delivery by drones, platoons of autonomous vehicles and marveled at the videos of robots moving products around a warehouse and machinery that can self-diagnose. These are all examples of how the digital revolution can impact individual segments of the supply chain, but when it comes down to it, will they drive the supply chain revolution as many are predicting?

Individually, each of these initiatives will drive cost effectiveness and enable new levels of flexibility within different segments of the supply chain. Nonetheless, as anyone who has worked in supply chain knows, the strength of the supply chain depends on the weakest link.

Many organisations, despite considerable past investments, however, are still trying to address the fundamental supply chain challenges; siloed processes, organisations, solutions and data. These challenges typically generate competing KPIs between departments which in turn create inefficiencies, restrict agility and flexibility, inflate inventory and impact service and availability.

Yes, some of the digital capabilities will help to alleviate some of these challenges, but the real benefits will only be realised when we can knit these digitally enabled capabilities together to enable agility and flexibility through the entire supply chain.

What’s the art of the possible?

Imagine knowing the exact location and condition of every product on every shipment through the supply chain at any time. Imagine being able to react instantly in the most cost-effective manner to any supply chain disruption or sudden demand spikes to ensure continuity of service or production. The technology and analytics to support this capability is now readily available, but in order to take real advantage of this type of capability, the “real time” data it generates has to be combined with traditional supply chain data (demand, inventory, forecasts, shipments, orders etc) at each node in the supply chain.

Integrating granular real time “digital” and “traditional” data, combined with advanced analytics, enables more informed operational decisions and data driven operational processes. Having this real time operational view of supply and demand is key to driving transformational change and delivering sustainable business value and enabling the benefits digitally enabled capabilities can deliver.

Delivering the Vision

This vision may sound very far-fetched and too much of a stretch, but we can, however, start simple. The first step is the integration of traditional supply chain data to provide a fundamental platform for change, enabling the capability to “look” up and down the supply chain, and take a holistic approach to the management of supply and demand. This will help to address some of the issues caused by the traditional siloed approach to supply chain management.

Once we have this platform in place we can then begin to integrate real time digital data and other external data (weather, traffic) and start to introduce new, more agile analytics enabled business processes within the context of the overall supply chain.

Integrating all this data and having the ability to analyse and take action on this data in real time provides a foundation for integrating and exploiting new digital capabilities. It allows their impacts to be felt through the entire supply chain not just in individual supply chain segments.

Yes, the digital supply chain can be fact, not fiction, but the way we approach it and where we start is key to successful delivering the digital vision.