Now more than ever –  Digital Supply Chain 

Digital Supply Chain

With crisis comes opportunity.  The opportunity after this  crisis will be to build digital into  the core of every  company. 

Businesses are looking for the  best path forward from the  impact of  COVID-19, and  executive teams are looking ahead and adjusting their strategies to succeed in this  post-pandemic  business environment.   

There is a  growing  consensus  between  CXOs in prioritizing digitalization and leveraging the supply chain as a competitive tool.  Given the economic turmoil,  businesses must focus on their value proposition and align their priorities to achieve it. 

Focusing on these  three priorities will drive digital initiative investments in an unprecedented business environment: 

  • Business Growth 
  • Cost Optimization
  • Business Agility

Digitalization is the key enabler of  growth,  optimization  and  agility, as it supports a more transparent, automated, intelligent and orchestrated end-to-end supply chain.  There are unique technology components that organizations can employ to obtain these values.  

Business Growth  

Future markets will belong to digitally enhanced versions of today’s products or completely digital substitutes.  Any digital investment that  aids  return to growth  must  be  prioritized . New digital business models — including  virtual stores  or digitally enabled products (subscription-based, pay as you go) — will be  essential  to explore. 

CXOs  will have to thoroughly revisit their supply chain operating model to support new digital business models and digital products. 

Cost Optimization  

 Organizations are placing greater focus than ever on financial matters, including profitability, cost management,  efficiency  and productivity. 

Supply chain is often the function CXOs optimize to lower their company’s costs. CXOs  are  devising plans  to leverage  digitalization  to  optimize their supply chains further  while protecting the supply chain from linear cost-cutting. There are three technology opportunities to optimize supply chain costs. The first is robotic process automation (RPA) to automate repetitive supply chain processes such as order management or supply contract management. Next, advanced analytics can help improve and automate supply chain decision making across several areas of the supply chain. Finally, collaborative/smart robots will further automate operations across factories, warehouses and distribution centers. 

 Supply Chain Operations Reference (SCOR) model Level 1 metrics  

Digitalization represents an opportunity to improve performance for each of these metrics 

Supply Chain Impact

Business Agility

Organizations that prioritized agility before the pandemic fared much better during the crisis. For others, the pandemic unveiled supply chain capability gaps that CXOs are now racing to cover.  Agility  brings speed, responsiveness, adaptability and resilience in supply networks and operations.  It delivers critical  capabilities that will allow companies to thrive in a non traditional business environment.  A distinctive  agile supply chain can sense and respond to unanticipated changes in demand or supply quickly and reliably, without sacrificing cost or quality. It is vital to  improve customer experience and sustain growth. 

ITOrizon Business value

To successfully articulate the business case for digital investment:

  • Create the ambition for change —  Obtain  a highly connected, transparent supply chain with end-to-end supply chain orchestration
  • Assess digital maturity —  Estimate  business benefits based on the current digital reality, data availability, processes, and IT legacy applications.  
  • Mix transformation with optimization —  Envision the future supply chain and propose a mix of digital optimization and digital business transformation initiatives, keeping all three business priorities in mind:  business growth, cost optimization and agility.
  • Evaluate ROI – The business case should evaluate benefits against a range of business outcomes (short-term, long-term) and risks tied to eventual financial gains. Expectations of immediate monetary gains must be avoided.