Digitization Tops the List of Supply Chain Priorities

Supply chain technology is fast going from being a strategic differentiator to table stakes, a new survey finds. In fact, most organizations are focused on leveraging advanced technologies, such as the Internet of Things and big data, to create a quicker and more agile supply chain.  

Supply chain digitization is a key focus for nearly 80% of the 203 organizations surveyed, the 2016 SC Digest Supply Chain Digitization Benchmark survey found. Meanwhile, 37% characterize this work as a major initiative. The research, which was released last week, was conducted for JDA Software Group in partnership with Supply Chain Digest.

Fred Baumann, group vice president, Global Manufacturing Industry Strategy at JDA, told EBN:

At JDA, we refer to digitization as the process of using technology advancements linked with physical and digital assets to redefine and reimagine current business practices to create a significant competitive advantage. For companies challenged by today's fast-paced, hyper-competitive, omnichannel environment, most view supply chain technology as a key enabler of the speed, agility, resilience, and customer responsiveness they need to remain competitive, [and] drive greater revenue, profit, and efficiencies across their operations.

A variety of market realities are driving this new focus. “It's not just one thing, but the confluence of a couple of things,” said Baumann. He points to the “Amazon effect,” a term coined to describe the increased expectations of consumers of retailers caused by the buyer experience offered by the huge e-tailer. 

“Retailers are focusing on service at any cost,” he said. “It's dramatically changed the way they flow products to consumers.” In turn, these same organizations are looking for ways to leverage the digital network to increase efficiency and analyze and predict customer behavior. Further, the amount of available data is growing exponentially, which allows supply chain professionals get a better handle on supply chain assets. “They know that there has to be way to translate all that data into better efficiency at lower cost,” Baumann said.

These trends may be particularly significant in the high tech and consumer electronics sectors. “These sectors contend with the integrated nature of these supply chain, the speed of the supply chain, and the importance of innovation,” Baumann said. 

When asked where the most opportunity lay to gain value in the digital supply chain, respondents were clear: supply chain visibility (58.6%); advanced analytics (51.9%; and supply chain systems integration with partners (43.9%) were the top three.

The infographic below provides highlights of the survey. Take a look and let us know how your organization is leveraging digital technology most effectively in the supply chain in the comments section below. 

— Hailey Lynne McKeefry, Editor in Chief, EBN Circle me on Google+ Follow me on Twitter Visit my LinkedIn page Friend me on Facebook

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1 comment on “Digitization Tops the List of Supply Chain Priorities

  1. docdivakar
    May 31, 2016

    I would argue that digitization as an initiative in the electronics supply chain is far less than 37% (which appears to be the number for all of the companies surveyed; note also that electronics companies accounted for just about 10% of those survyed).

    The survey results are not surprising for industries other than electronics manufacturing where supply chain automation may not be either a cost savings or time-to-market priority.

    MP Divakar

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