Digital Supply Chain: Is the future here now?
The text discusses the evolution of the digital supply chain and the rapid changes in the supply chain industry, particularly in the retail sector.
Back in the last century, Accenture would hold an annual event called the “Global Consulting Seminar.” It brought together leadership from around the world, some 7,000 people at the time. The session, conducted on a grand scale, would take over Epcot in Orlando.
At a session held in 1998, we had two speakers that left a lasting impression: Henry Kissinger and Don Tapscott, author of “The Digital Economy.” Kissinger said that he believed that his generation would be the last that got its education entirely from printed books. Tapscott spoke about the rise of the digital economy in an era of networked intelligence.
While January 1, 1983, is generally considered the birthday of the internet with the development of Transfer Control Protocol/Internetwork Protocol (TCP/IP) that gave disparate networks a common way to communicate with each other, it was piggybacking on a number of seminal inventions and developments dating back almost 20 years. However, in the 1990s, general commercial acceptance and use was limited. At that point, we still relied on FAX machines, landlines, and paper documents.
The digital supply chain has evolved from the nascent steps taken in the 1960s and 1970s with embryonic TMS systems into what we have today, which are robust and more comprehensive technology solutions that have helped speed up the process of moving freight and accurately and timely capturing the data related with large volumes
of transactions.
Kevin Mahoney, managing director, supply chain at Deloitte, and colleague Ryan Geiger, have devoted thought leadership time to coping with the rapidity of change in supply chain, particularly in the retail sector. While change is constant, the speed of change has been ratcheting upward much more quickly than ever before, especially with the rapid rise of artificial intelligence (AI).
They recently posted a series of key issues that require identifying and pose questions that can be used to help address these issues:
Anticipating and acting on fast-evolving consumer needs
- Consumer preferences are ever-changing, often defined by digital engagement models, algorithms, and influencers, yet supply chains are still linear, sequential and involve long lead times.
- Does meeting these consumer requirements align with your differentiators? If you can’t meet these, are you setting expectations appropriately?
Progressing to product-driven, continuously evolving tech
- With the barriers of entry to digitizing the value chain through advanced analytics, cloud computing, and IoT devices, legacy solutions, workflows and data structures need to be assessed to maximize effectiveness of investments and to expand to advanced capabilities.
- Are your current digital capabilities limiting innovation? Is your legacy tech stack limiting innovation and the evolution of capabilities?
Bridging legacy functional silos
- As businesses adapt to be cross-channel, faster, and more agile, existing siloed supply chain functions must embrace fully integrated, end-to-end processes and shared metrics to incentivize value.
- Are the functions of your supply chain siloed? Do you have line of site across your entire value chain?
Balancing efficiency and resiliency
- For decades, supply chain has had one primary goal: lowest cost at highest service. But in today’s dynamic, unpredictable environment, lowest cost can’t always be the answer and must be reassessed frequently.
- Have there been key events that have tested the resiliency of your supply chain over the last 2.5 years? Do you have a structure supply diversification and logistics continuity plan in place for disruptions?
Creating partner ecosystem connectivity
- Many existing third-party connections rely on static, flat-file data feeds and e-mails on employee’s local machines and issues are rarely identified or proactively communicated to mitigate the situation.
- Do you have “right-time” data from your supplier base and logistics service providers? Do you wish you had the same visibility as your partners do of their processes?
Evolving the workforce
- Workforces are evolving at a much slower pace than technological innovation in workflow automation and analytics. The world is changing and data sets capturing these changes are multiplying at a rate impossible for humans and traditional technologies to harness. Many organizations are still mired in pre-cloud systems that rely heavily on spreadsheets, emails and legacy processes—it’s time to move on.
- Are the requirements for your workforce-of-tomorrow defined? And is there a plan to transition? Will you buy, build, or borrow?
There’s not much doubt that AI is going to significantly transform the way we live and work, although there’s not much clarity yet on how that will evolve. Digital supply chains are a key for unlocking real potential.
Organizations’ agility and adaptability need to be extremely high, enabling changes in strategy for adapting to new approaches to managing complex networks.
Digital supply chains are a growing reality today and future enhancement will be unlocked by AI-enabled technologies. Staying alert and connected to what’s happening is critical to longer-term competitiveness and success
