The Digital Supply Chain Transformation

April 4, 2016 Ed Rusch

Digitization is transforming nearly every business on the planet. It's pervasive. And the rate of change is rapidly accelerating.  Just as CDs quickly made decades old vinyl records and tapes obsolete - and today the internet coupled with smartphones even more quickly imposing obsolescence onto CDs - everybody and every industry is being impacted by dynamic digital disruption.

Areas of Investment for Supply Chains

According to a study conducted by Boston Consulting Group, leaders in digital supply chain management are enjoying increases in product availability of up to 10 percentage points, more than 25% faster response times to changes in market demand, and 30% better realization of working-capital reductions, on average, than the laggards. They have 40% to 110% higher operating margins and 17% to 64% fewer cash conversion days.

"For years, companies have used digital supply chain technologies to improve service levels and reduce costs. But the inability to connect disparate systems, provide end-to-end visibility into the supply chain, and crunch massive amounts of data, among other issues, has prevented many companies from achieving the full potential of their supply chains. Now, thanks to the wide availability and adoption of much more powerful digital technologies, including advanced analytics and cloud-based solutions, companies are generating dramatically better returns on their investments." [from bcg.perspectives | feb 2016]

Three Areas of Investment

BCG's study attempts to cut through the noise of jargon and buzzwords, offering up these three investment areas:

  1. Fix Performance Gaps - Avoid workarounds that often plague new-technology rollouts by using integrated systems rather than dispersed excel sheets.
  2. Innovate Business Processes - Control towers improve revenues and profits as companies speed up supply chain activities, increasing efficiency and uncovering new revenue streams.
  3. Disrupt the Supply Chain - Redesign operating models and go-to-market approaches in order to generate significant growth. Find new routes to customers, decentralize activities, and substantially speed up delivery.

People Get Ready

Taking the findings of this study, the Elemica Marketing Team put together the following Infographic to illustrate the evolving skillsets supply chain professionals will need to embrace in the digital supply chain. 

If you liked this post, you may like "Using Supply Chain Strategy to Increase Company Value" which outlines the benefits realized when companies embrace and implement Supply Chain Centers of Excellence within their enterprise.

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