As with other areas of the value chain, Digital supply chains are a game changer for supply chain transformation. Most enterprises are grappling with the digital transformation of the supply chain and how to adopt and evolve. However, a recent global study shows that not all companies are dealing with this changing landscape of digital supply chains in the same effective manner.
The extensive C-Level research undertaken by Capgemini Consulting and GT Nexus looks at the existing supply and value chains relative to the technologies and capabilities of today as well as those coming on stream. The results show major gaps in realized benefits and what those chains will look like in just five years.
If the innovations and changes are as great as this study indicates, it is worth the attention of every participant in today’s world of logistics. In fact, the study provides significant competitive insights that progressive companies can adapt and implement immediately.
If the innovations and changes are as great as this study indicates, it is worth the attention of every participant in today’s world of logistics. In fact, the study provides significant competitive insights that progressive companies can adapt and implement immediately.
Why Change Has, Is and Will Occur at Increasing Rates
A key conclusion of the study is that digital advances are driving transformation in the supply chain in four key areas.
Digital Supply Chains – Drivers and Imperatives:
- Supply Chain Visibility Platforms and Tools. The process of moving products from suppliers to warehouses to end-users is no longer a black box to those participants, including the consumer. There is now demand for real-time visibility at each step, from inventory to doorstep.
- Big Data and Analytics. The concept of Big Data provides previously unavailable insights into each step of the supply and value chain. The derived analytics provide granular data that allow management of minute details of logistics, from inventory management to route selection to client management.
- Simulation Tools. Participants in the supply chain have moved from historical to real-time management information, allowing for a dynamic response to changing conditions. However, new simulation capabilities incorporate the information from Big Data analytics to provide powerful new what-if modeling. The results of this simulations drive even more changes and evolving expectations
- Cloud Capabilities. With scalable access to the most powerful computing and processing capabilities, even the smallest 3PL can often offer essentially the same capabilities and performance as that of the largest companies. At each step in the supply chain the access to cloud capabilities allows new approaches and strategies.
However, the study also provides valuable understanding of why the next five years will see such significant changes. The executives interviewed indicated they are largely dissatisfied with the progress of fully implementing and capitalizing on digital supply chains. While 33 percent are dissatisfied, only 5 percent are happy with their firm’s progress.
Another area of focus is moving more of the industry’s capabilities to the cloud. As of now, only two of the three firms are fully utilizing the cloud, in part because less than 25 percent of necessary software is cloud-capable.
Significantly, the 337 global executives interviewed for the study are not sitting still. They have made full digital supply chain integration a priority, and fully 95 percent expect their operations to be fully automated within the coming five years. Those expectations drive changes, and companies that cannot adequately participate in the digital supply chain will find themselves very lonely indeed.