The current state of supply chain digitalization

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Supply chains will develop into vast platform-powered ecosystems with new operating models that see humans and machines work seamlessly together.

As a relatively recent joiner to Capgemini, one of the first things I came across was the Group’s “The Digital Supply Chain’s Missing Link: Focus” report. As I read the report, it reconfirmed my conviction that organizations wishing to further their supply chain transformation journey need to make certain investment priorities – notably the digitization of their supply chain.

Indeed, our report found that supply chain digitization is a top three priority for leading organizations – and in my view is only preceded by the digitization of their back-office and operations. As the report states: “Digital supply chain and logistics automation is the top funding priority for businesses worldwide, with investments in transformation reaching $93 billion in 2018.”

Investment in technology

Organizations are busy investing in supply chain technologies such as virtual reality, robotics, robotic process automation (RPA), artificial intelligence (AI), and other intelligent automation techniques such the Internet of Things and blockchain. All of which either drive efficiency and / or increase the level of visibility and insight into the supply chain and business operations.

For the most part, the key rationale for investing in these technologies has been cost containment. “The benefits of supply chain digitization can be wide-ranging: cost savings, improved customer satisfaction, or even the launch of an entirely new business model,” states the report.

However, these technologies still hold untapped value across the supply chain. Organizations need to move away from simply “digitization” and move towards “digitalization.” Digitalization refers to the transformative character of these initiatives, which is enabling organizations to implement entirely new business models, products, and services to create new streams of revenue.

Platform-powered ecosystems

It is widely accepted that digitalization is already enabling organizations to transform their supply chains from corporate cost centers into competitive differentiators.

Going forward, we will start to see supply chains develop beyond individual networks into vast ecosystems. “Strong, collaborative partnerships offer significant opportunities, such as collaborative design (with upstream partners) and collaborative demand planning (with the downstream partners),” states the report.

This will lead to a new reality of the multi-enterprise supply chain that requires new operating models in which humans and machines work seamlessly together. Supply chains will ultimately become platform-powered, ensuring multi-enterprise visibility and collaboration based on “no-touch” processes.

Learn more about Capgemini’s Digital Supply Chain Practice can increase your competitive advantage by strengthening your business drivers and focusing on your end customers, contact: joerg.junghanns@capgemini.com

Read Capgemini Research Institute’s “The Digital Supply Chain’s Missing Link: Focus ” report to learn more about how organizations across consumer products, manufacturing, and retail understand the digital initiatives they are adopting, the benefits they are deriving, and the way they are transforming their supply chain.

Jörg Junghanns leverages innovation and a strategic and service mindset to help clients transform their supply chain operations into a growth enabler.

 

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