Towards a Digital Supply Chain
Without a digital foundation it is all for nothing
One of the topics that has risen is Digitization of the supply chain. The ongoing digital transformation will dominate the supply chain in the coming years. This digitization brings new opportunities for innovative business models. and is already impacting production systems and supply chains. Combined and connected, these technologies will open up new opportunities for creating value across multiple dimensions. As supply chain leaders set their objectives and strategies for 2024, digitization should be a priority. as it will fundamentally change supply chains, and enable the new technologies on the horizon. So before even talking about harvesting the value of data, big or small, companies need to speed their investments in the digital supply chain. No time to waste. No AI, ML or advanced analytics without a proper foundation.
The digital supply chain claimed the number one spot for 2024’s supply chain trends ending big data, advanced analytics and automation’s four-year run as the top trend. It is absolutely fundamental. The digital supply chain has risen to prominence because it is viewed as the backbone for streamlining various supply chain activities. For example, digital capabilities have replaced paper and antiquated processes, leading to a more agile supply chain architecture. Technology investment accelerating.
Digital technology is now applied to almost every part of a company’s value chain
Over the past year, investing in a cloud-based digital transformation strategy was a key trend, and in 2023 this trend is likely to accelerate as organizations seize technology as a strategy to mitigate their growing concerns around inflationary pressures and economic stagnation. While technology transformation often focused on the back office and better customer engagement, supply chain and operational capabilities will be front and center in 2023. Importantly, there will likely be greater investment to uplift supply chain planning maturity, automation of warehouse and operational tasks, as well as in gathering better end-to-end supply chain analytics to create enhanced visibility.
What is needed?
Prioritize technology investment in supply chain planning capabilities, and end-to-end visibility enabled by real-time analytics, as these can help you to maintain operational stability. Fast-track your data management policies and capabilities, and upskill your teams to make the most of the technology capability for insights led decision making. Consider how you can invest in automation to replace redundant manual supply chain activities, drive productivity gains, and protect against margin squeeze and cost increases. There are opportunities to streamline very manual activities such as Global Trade documentation, Free Trade Agreement (FTA) compliance, trade tax calculations, reconciliations and settlements, and reporting.
Supply chain Challenges 2024
The Digital Supply Chain is the digital transformation and the integration of technologies like IoT, AI, and blockchain for enhanced visibility and efficiency. Adoption of digital platforms for end-to-end supply chain management. The Future Outlook is an estimation for the next 5 years.
What are the roadblocks adopting supply chain analytics? In our previous post on the Supply Chain Technology Top 10 we already touched upon some of the major challenges to adopt these new technologies. In this post we will focus on these roadblocks that companies face when adopting these new supply chain technologies. (1) Digitization of the supply chain and enabling a platform for collaboration, (2) Visibility, real-time information and demand sensing, and (3) Advanced Analytics and BI capability. As said we used the excellent work by Gartner (2019a, 2019b), Furr&Shipilov, (2019), Butner, K, (2018), McCrea, B., (2019) to compose a list of technologies and cases that we then used in our interviews with our clients. Basically to get an idea on which initiatives are being adopted and tested given the maturity of the company. So with digitization, data and analytics at the heart of these new technologies what is holding them back to adopt these new technologies? What needs to be solved first?
Culture is Key
One of the biggest hurdle faced by supply chain leadership is clearly overcoming cultural challenges. And although Data literacy (skills, data, people) is the top internal roadblock. The only way to tackle this problem is first to face the cultural challenge. So resistance to accept change is one of the key issues we came across. Data literacy problems is a top priority and calls for commonality of shared language, skilled people, fluency with data, analytics and data driven decision-making across the organization.
The need for a data strategy
Deep dive Data Literacy
The results shows that data driven decision making is gaining a foothold within all parts of the supply chain but there are still some major roadblocks in becoming a data driven company. Lack of skills, data quality and leadership lacks understanding are the top. Perhaps most importantly, the output echoes a critical point that data advocates make repeatedly: it is not just about the data. Much attention is paid to the need to recruit skilled data specialists, an issue we address in the next section of this report. Yet a data-driven culture cannot be built on a few experts. It requires buy-in across an organisation, which in turn requires educating employees about the power of data, and empowering them through training. “Companies should challenge all employees to share data, to collaborate, to share best practice. But change often has to start at the top and, without support from the C-suite, it may be impossible to create a data-driven culture. For most companies, the data team’s success relies on the broader company embracing a data-centric approach.
Some final remarks
We definitely see almost all the research on this topic that Culture and Data literacy are two of the main roadblocks in becoming a the data driven company. secondly, seeing data as an asset is a popular idea, but a scarcity of asset management standards, unfamiliarity with business models and a lack of skills, people and experience prevents supply chain leaders from driving value from data.
1) Groothedde, B., (2019), Challenges voor supply chain analysts in 2020 in Data Analytics, Publicatie, Research.
2) Groothedde, B., (2019), De Supply Chain Technology Top 10, Insights.
3) SCM World Future of Supply Chain surveys 2017, 2018 (n=1409)
Supply Chain Digital Transformation Study. The Hackett Group (2017)
4) The Most Important Boardroom Discussions, Supply Chain Magazine no.29 Q2, 2018
5) Gartner Top 8 Supply Chain Technology Trends for 2018, February 27, 2018
6) Top 10 Supply Chain Trends 2023 2 , ASCM (2023)
7) ORLANDO, Fla., May 10, 2023, Gartner Reveals the Top Supply Chain Technology Trends for 2023. Justin Lavelle
8) Top 10 2024 Supply Chain Trends: Beware of the Analytics Rabbit Hole. Last Published: Sep 21, 2023
How can we help you?
We specialize in guiding organizations with the transition to digital supply chain management. Our expertise lies in leveraging advanced analytics tools to streamline operations, enhance visibility, and optimize supply chain performance. If you want to know more what we can do for you please let us know.