Digitization isn’t merely a buzzword. The digital transformation of your business can have a serious impact on your organization – particularly as it applies to your supply chain operations.
For instance, a digital supply chain can lower procurement costs by 20%, reduce supply chain process costs by 50%, and increase revenue by 10%, according to recent Center for Global Enterprise (CGE) research.
During the 1st half of 2016, CGE representatives met with and interviewed a collection of supply chain executives from around the world to gather their thoughts on the merits of digitizing supply chain operations. Here’s what 11 of those experts had to say about transforming the organization and gaining a competitive advantage with digital supply chain capabilities.
A digital supply chain can better enable customer-centricity
In today’s business world, it’s become increasingly imperative to put customers at the forefront of your operations. Digitizing your supply chain can provide your organization with the real-time visibility it needs to deliver the superior customer experiences your buyers demand.
- “The customer and customer alone determines whether we win, or we lose. This is increasingly a customer-to-business global economy; the business-to-business-to-customer economy is going away. … Big Data and analytics, the Internet of Things, [and] social media all enable businesses in every sector to reach and thereby better know and fulfill their customers’ needs and wants. The digital supply chain holds the promise of real-time data to sense demand, drive innovation, reduce cost, and deliver the customer the right product at the right time and price.” – Bill McDermott, CEO, SAP
- “As a company, we must differentiate ourselves to our customers in the market in all that we do. It’s essential to have end-to-end visibility and capability in our supply chain. A digital supply chain – including use of the Internet, Big Data, analytics, and other technologies – enables us to do so much more today than only a few years ago. This differentiation grows our revenue and market share while also cutting costs significantly.” – Jean-Pascal Tricoire, CEO, Schneider Electric
Digitized processes and operations are transforming R&D, manufacturing and logistics
Innovations in robotics, 3D printing, drones, and driverless vehicles are transforming manufacturing and delivery. By 2020, the use of these technologies will be par for the course. But a number of organizations are already benefiting from these advancements.
- “The financial services industry in general is challenged by many incompatible platforms and processes. We’re now highly engaged in integrating the data from these silos and employing AI and robotics – not the mechanical robots but rather software ‘robots’ that are able to grab data from one system, ‘clean it up,’ then deploy it to others in a way that is usable going forward across our systems. What we’ve seen is incredible productivity, quality, and efficiency gains in our supply chain organization.” – Gaurav S. Saxena, vice president, procurement operations, American Express
- “3D printing is radically changing how we use digital technology to create and produce products that you simply can’t do with traditional methods. For example, we recently launched our first footwear that was digitally 3D fabricated and manufactured – the UA Architech – offering athletes a ‘super-hybrid’ trainer that solved an unmet need through a proprietary 3D printing process. This digital technology, coupled with others like sensors, robotics, Big Data, and analytics, will enable us to engage with new customers, cut costs, and transform how we plan, shape, predict, and deliver to athletes around the world.” – Kevin Plank, CEO, Under Armour
- “In the near future, as we develop more 3D printing capability and knowledge, we will be able to accelerate our innovation and new product development process greatly. Where it takes a week or more today, we’ll be able to create a new product mold and cap in just a day for quick prototyping. Coupled with sensors, social media, retailer, and Big Data analytics, we’ll be able to shape, predict, and quickly respond to new customer demands and grow market share.” – Mike Corbo, chief supply chain officer, Colgate-Palmolive
- “Time is money, and speed wins. Through investments in AI and robotics in the shipping and distribution channels, we expect to cut our distribution and end customer sales costs significantly over the next year or two. Greater efficiency, speed, quality control, and customer satisfaction are essential to the bottom line and will grow our market share.” – Jim Hardy, executive vice president, global operations, Under Armour
A digital supply chain can improve the management of demand, people, technology, and risk
Organizations that operate in different industries and lines of business face a wide variety of challenges. The beauty of leveraging a digital supply chain is that you can meet those challenges head on, whether they involve managing customer demand, employees, technology, or risk.
- “Now, we are at a critical pivot point in supply chain technology and software. There was a time not so long ago when companies were thrilled with technology allowing supply–demand conversion once a month. But the question now is ‘What can you do close to or in real time?’ with multiple data sources to bring customer sentiment and behavior into the demand forecast cycle.” – Pallab Chatterjee, general partner, Symphony Technology Group
- “Digitizing the supply chain is revolutionary and innovative for companies to undertake, and the focus we place on it at Schneider Electric allows us to improve supply chain efficiency and enhance our customers’ experience. Through digitization, the insights our supply chain teams gather from the data we collect are critical, so we can plan for what we know so we have some capacity to react to what we don’t know. Working collaboratively across the supply chain and having intimate knowledge of our customers’ needs puts us in a much better position to achieve mutual success.” – Annette Clayton, chief supply chain officer and president/CEO, North America, Schneider Electric
- “The ability to collect and make effective use of Big Data is essential to the success of our business and its supply chain. One of the key challenges today is finding the right people and skills to realize this potential. We need different skills sets – more data scientists and IT professionals conversant with Big Data, analytics, and tools to interface with data available from the Web. We need to train key employees who know the company’s infrastructure to team with fresh university and college graduates and data scientists. And we need people who understand the opportunities and risks our business faces and can figure out what data we need. These are the people who can ask the right business questions and communicate with the data scientists.” – Keith Miears, vice president, global supply chain, Dell
- “One of the challenges we face today is how we collaborate and deal with a fairly large number of suppliers in China and other countries in Asia. The level of IT sophistication is very mixed, with large ODMs [original design manufacturers] and customers able to manage most anything we want or require of them. The smaller suppliers may have more limited IT capabilities, and so we both face decisions about whether we can build a business relationship and whether this may require new investments in IT training and capability. These are very real opportunities and risks we must weigh.” – Kenji Mizuno, deputy head, corporate supply chain management unit, Fujitsu
- “As CEO of a global supply chain service provider, [I] clearly see the ROI from a digital supply chain. It’s no longer just about matching supply to meet customer demand. New risks and opportunities are arising for the supply chain organization. New government and non-government compliance rules are increasing that require businesses to ensure that their vendors and suppliers are also complying. Effectively, this requires more data collaboration with your vendor and supplier base. Compliance and leverage for positive brand impact is an opportunity. Loss of business and potential brand damage is the risk. A secure digital supply chain platform provides a way forward.” – Urs Dogwiler, CEO, ChainIQ
Differentiate your business with a digital supply chain
A digital supply chain is no longer an option. It’s a necessity.
For businesses to remain successful in today’s digital age, they must reimagine how to design, plan, make, deliver, and operate their products and/or assets. A digital supply chain is the key enabler to achieving all of this in the fastest, most reliable, sustainable, and cost-efficient manner possible.
Read CGE’s entire report, Digital Supply Chains: A Frontside Flip: Building Competitive Advantage to Optimize Performance and Customer Demand, to gain even more insight on what business leaders have to say about digitizing the supply chain.