On the Road to the Digital Supply Chain

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“Nothing behind me, everything ahead of me, as is ever so on the road,” wrote Jack Kerouac in his legendary 1957 novel On the Road.

As the novel’s protagonist travelled without a clear direction – but with a focus on experimentation and spontaneous creativity – so should today’s supply chain leaders in their approach to the digital world. With technology developing at a stellar pace, everything is ahead of us. It’s clearly a new world — one which requires experimentation and spontaneous creativity.

Chief Supply Chain Officers view digital as a strategic opportunity to transform their supply chain. They have great expectations about the importance and disruptiveness of a number of technologies in respect to supply chain strategies. However, they feel that the most critical roadblock to digital transformation is putting together an overall roadmap.

So, many supply chain leaders are travelling without a clear direction. To get back on track, they need to experiment with what works and what doesn’t work in their supply chain, and then use spontaneous creativity to plan for their future supply chain’s direction. This is the roadmap to the digital supply chain.

What does it take for CSCOs to put together such a roadmap? I have had the opportunity to run a number of digital supply chain workshops over the last couple of years. Here is what I’ve learned from the leading companies I worked with.

There are four fundamental principles to create a successful digital roadmap:

  • First, consider digitizing the supply chain end-to-end. One of the key issues that emerges constantly is that past investments in technology have been made in isolation, to fulfil specific needs of just one function. The result is a number of separated data lakes. These disconnections prevent supply chain leaders from making quick decisions. So, companies must think holistically and look at the interceptions of all different moving parts to find digital gaps.
  • Second is the notion of the sentient supply chain. In the digital world, companies need to develop an ability to sense everything happening along the end-to-end supply chain, but also develop an ability to respond to meaningful changes in supply chain conditions. We believe the future of supply chain will be sentient, and this notion is really at the core of the digital supply chain.
  • Third is the need to approach technology holistically. For many traditional companies digital simply means having completed an ERP consolidation project. However, digital is much more than that. Of course it includes information technology, but it extends to operation technology, from collaborative robotics or 3D printers, to emerging technologies like blockchain or autonomous vehicles. And finally to data, which is at the core digitalization.
  • The fourth and last principle is the test and learn approach to digital. Technology is developing so rapidly that there is no time for supply chain leaders to wait years for a massive roll out of technology. So, the approach that works is launching small projects, testing new technologies in small environment, and learning how they work and what the benefits are. Only then does it make sense to scale and roll out.

Many companies are pioneering the digital supply chain: Caterpillar, Coca-Cola, CISCO, KoneCranes, GE and Lenovo have all invested in digital capabilities to create a sentient supply chain, where an ability to sense supply chain data is coupled by response capabilities for immediate actions.

To harness the experience of those companies that are already on the road – and combine it with the challenges of those who are starting right now – we are working on a digital supply chain research project aimed at creating industry-specific benchmarks to help companies find a direction to drive to.

Make your voice be heard and take our survey by following this link: http://www.cvent.com/d/ztq328?refid=blog. You’ll receive a personal copy of the report when it is published at the end of March. Just follow Jack Kerouac’s advice: start driving, and you’ll find the way by experimentation and spontaneous creativity.

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Author Pierfrancesco Manenti

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