Article by Richard Howells, published in Digitalist - worth a read.
Digital supply chain disruption is in full swing. Today’s hottest companies – Uber, AirBnb, Netflix, and Alibaba – are all service providers that own no actual inventory. Major logistics providers are getting in on the act, with DHL testing the use of augmented reality glasses among its employees and UPS looking to provide 3D printing services from its stores. Amazon is testing out delivery drones, robotics for goods handling, and new apps to optimise asset-light delivery services in major cities. The traditional supply chain has been officially disrupted.
The digital economy will transform the way we live and work, how business runs, and how society functions – and it will do this in a timeframe that is much shorter than any other major economic transition in history.
This transformation has impacted, and will continue to impact, the business processes and systems that are required to remain competitive. It will change how we design, plan, make, ship, and operate our products and assets.
Industry leaders, on the whole, are woefully unprepared for navigating the digital economy’s complexities or leveraging its opportunities. While 90% of CEOs know that the digital economy will have a major impact on their industries, less than 15% currently have plans to adapt to this economy. A further 71% of companies say their digital maturity levels are still “early” or “developing.” In just two short years, one-third of all industry leaders will be disrupted by digitally enabled competitors. Seventy percent of executives say they have started digital supply chain transformation, but they may lack a clear understanding of what this transformation entails.
A lack of robust preparation and understanding is hindering the transformation process. Resource shortages are affecting businesses on multiple fronts, including a shortage of material resources and human resource talent. In today’s dynamic landscape, customers are demanding better, individualized products faster.
The very nature of collaboration is also shifting. Businesses must collaborate not only with people but with assets. The sharing economy can therefore be thought of as an extension of the Internet of Things, where everything is connected.
Companies must develop an environment in which they can manage information and processes simultaneously across the extended supply chain. This new evolution of supply chain is more connected, intelligent, responsive, and predictive. It enables companies to drive customer-centric processes and deliver personalized products uniquely built and delivered for the “segment of one.” These demanding customers have to be serviced across a business network of global partners, who are increasingly challenged by resource scarcity.
“To win in the digital economy, we have to reimagine how we design, plan, make, deliver, and operate our assets,” argues Hans Thalbauer, senior vice president of Extended Supply Chain at SAP.
This starts with a clear understanding of the building blocks for digital supply chain success, including collaborative supply networks and product lifecycle management.
To achieve digital supply chain success, you’ll want to make strides toward these four goals:
In a connected world where every company is becoming a technology company, smarter products, assets, and services will drive new processes and opportunities across the supply chain. Every company across all industries requires a simple digital approach to build a pragmatic and executable vision of its digital supply chain strategy.
Neil ran his first SAP transformation programme in his early twenties. He spent the next 18 years working both client side and for various consultancies running numerous SAP programmes. After successfully completing over 15 full lifecycles he took a senior leadership/board position and his work moved onto creating the same success for others.