Digital Transformation Drives Supply Chain Restructuring Imperative

Today's supply chains are experiencing high levels of change in terms of both internal and external pressures.

There's every reason to believe that this pace of change will accelerate and that the supply chain of the future will be in a constant state of flux.

Companies that can build supply chain flexibility more quickly will be better positioned to support their consumers/customers and thus grow their business more effectively.

Based on survey results and domain knowledge, this white paper explores how digital transformation (DX) is driving dramatic restructuring changes in the supply chain. Insights in this white paper include the following:

• Overall, the state of DX maturity cited by survey respondents is somewhat more advanced than we have seen in similar prior surveys. The survey that underpins this document reflects only the supply chain, so in that way, it is different. In extensive conversations that IDC has had with manufacturers and retailers, we would not judge supply chains to be particularly advanced. It does appear that companies are assessing their digital transformation efforts as more mature than they are in reality. We would suggest that there is little to be gained by a company thinking that it is more advanced than it really is.
• Digital transformation is moving fast, and the time to understand its implications for the supply chain is now.
• Digital transformation isn't necessarily disruptive, at least not immediately. While there may be disruptive things to be done with new technology eventually, most of the near-term applications are about improving performance and efficiency of current approaches and processes — things that are at the core of improving today's supply chain.
• To be successful at deploying a DX initiative, companies need to leverage external integration support. This is not just because companies do not or will not have internal skills to understand and implement new technologies; it is also because the distraction of managing existing IT projects may preclude focusing on the new and exciting DX-related business opportunities.
• Most manufacturers are not technology companies — they are product and service companies. Yet all too often, manufacturers feel it's their responsibility to explore and understand new things. We contend that the exploration of technology is best left to companies that do it for a living and that partnership strategies are much better for manufacturers and retailers. Thus the overwhelming landscape of new technology becomes much more manageable.