Digitizing The Supply Chain – Maximize The Value
Summary: A lot is being written about companies recognizing the need to “digitize” their supply chain. But what does that really mean? Generically, digitization is to convert information into a digital format. But in the context of supply chain, let me offer the following:
Digitizing the supply chain is to meaningfully connect and make available data associated with the Plan, Source, Make, Deliver and Return (SCOR) functions of the supply chain.
In other words, having repeatable and trusted digital visibility of the end to end supply chain. This information can then support:
- the proactive monitoring of product flows (Control Towers)
- improvements in operational efficiencies (S&OP applications) or
- critical insights regarding the total actual cost to serve for each product and customer
Why is this a topic that is top of mind for many supply chain executives? Is it correlated to serving customers better, driving efficiencies, lower costs or beating the competition and therefore driving profitable growth? Absolutely!
But achieving these objectives and maximizing value is not only an investment in digitization. Achieving real value requires breaking down the organizational silos using this information to gain maximum advantage; investments in the people and processes as well as the technologies.
Case In Point: I was recently interviewed by Supply Chain Radio Now and told the story about a major Waste Disposal company. The company wanted to use digital supply chain operational data to better plan and execute servicing their residential customers on a national basis. They had selected our company’s technology but the CFO sponsor had a traditional, technology focused strategy for it’s deployment. We explained to the CFO that his deployment strategy would not work because it did not address the required attention needed to address the process and people related requirements.
Action: The CFO took the position that if his deployment strategy was not used, the business (worth several million dollars) would be given to another company. We respectfully but clearly explained our position and he left the building. The next day, he returned and said that he had changed his mind because of our conviction in the proper deployment strategy. The subsequent adoption of the solution was extremely successful and led to additional national solution rollouts for the same company.
Takeaway: Digital visibility that provides connected, trusted and actionable end to end supply chain information is one key for “thriving” and not just “surviving”. But it also requires addressing the people and process considerations in order to take full advantage of the information across the organization.
Mastering the digital supply chain will separate the winners from the losers. It can support multiple critical needs including knowing the exact financial contribution of every product or service sold to every customer. That type of insightful knowledge can make servicing my trash can and yours an even more profitable venture.
I would love to know your thoughts on this. Please comment on this posting or email me at [email protected] .
All the best,
Richard Sharpe is CEO of Competitive Insights, LLC (CI), a founding officer of the American Logistics Aid Network(ALAN) and designated by DC Velocityas a Rainmaker in the industry. For the last 25 years, Richard has been passionate about driving business value through the adoption of process and technology innovations. His current focus is to support CI’s mission to enable companies to gain maximum value through specific, precise and actionable insights across the organization for smarter growth. CI delivers Enterprise Profit Insights (EPI) solutions that enable cross-functional users to increase and protect profitability. Prior to his current role, Richard was President of CAPS Logistics, the forerunner of supply chain optimization. Richard is a frequent speaker at national conferences and leading academic institutions. His current focus is to challenge executives to improve their company’s competitive position by turning enterprise wide data from a liability to an asset through the use of applied business analytics.