The Digital Supply Chain Initiative (DSCi), a research Institute launched by The Center for Global Enterprises, published its first report designed to guide companies in preparing for the Digital Supply Chain (DSC) of the future.
The Center for Global Enterprises focuses on the evolution of enterprise supply chains in the digital economy and the creation and practical applications of supply chain management (SCM) best practices.
The DSCi report provides a series of practical steps, a new approach in SCM conceived to increase revenue and decrease supply chain costs. According to the paper, flipping the focus to the customer-facing side of the business supply chain management can maximize demand and see a 20% reduction of procurement costs, a 50% reduction in supply chain costs, an increase in revenue of 10%. The researchers found this to be true across all industries.
By the year 2020, entirely new companies will be operating a Digital Supply Chain globally, according to the DSCi research. Some current powerful companies will also take the necessary steps to transform into a digital supply chain platform.
Following a strategy that aims at 20% lower costs and 10% higher revenue will allow companies to collaborate with their suppliers in a new way. At the same time, their collaboration with customers will drive innovative products and services.
Supply chain leaders will focus their energy to optimize results. This will be done by managing suppliers, moving manufacturing facilities to low-cost locations, and increasing the efficiency of logistics.
Big data and analytics, new technologies, new people skills, and as increasing risky operating environment will all be part of the frontside flip. Reaching a complete balance will ensure company success and Digital Supply Chain effectiveness.
The DSCi paper offers CEOs and senior supply chain leaders recommendations on how to move forward following four execution roadmaps to position their organization on the right pathway toward the digital supply chain journey.
Demand: Real-time continuous engagement with customers
One of the requirements for successful implemantion of a digital supply chain is useful, clean data obtained in real-time.
To achieve demand stimulation and management CEOs must ensure that real-time data is collected from a wide range of sources such as social media, Internet of Things (IoT) and sensors, and supplier and customer data.
The analysis of this data will determine customer demand. Bringing to the company new analytical tools and new data scientists ensures the good use of the data and the capacity to make better decisions.
Demand stimulation is an interesting add to traditional supply chain processes. CEOs and supply chain managers must promote and stimulate new market demand.
The execution of the digital supply shain can be signaled by developing a new, demand-focused scorecard. Perhaps adding metrics for revenue and market share growth could serve as encouragement for the supply chain team.
Data from machine learning and traditional management will provide enough information to make decisions better aligned with this new operating environment.