Benefits of an Integrated Digital Supply Chain Network
In today’s competitive environment, all organizations — from for-profit entities to nonprofit organizations and manufacturers to service providers — are looking to provide more value to their customers and shareholders. This is especially true for organizations that are heavily involved in supply chain management.
With margins tighter than ever, such organizations have been relying on lean principles seeking efficiencies, streamlining costs and process optimization to create added value. However, efforts to cut costs using cross-docking, zero based supply chain (ZBSC) and other conventional methods may not be enough. Implementing an integrated digital supply chain network could provide the added value you’re seeking.
Faster Fulfillment, More Customization
This is especially true given the demand among many customers for on-demand experiences delivered at hyper-speed. As reported on CFO.com1, a study conducted by Accenture Strategy found that four out of 10 supply chain executives said their customers want faster and more flexible fulfillment. Also, one-third of the executives said their customers want more customized products and services. And perhaps most telling, 85% of supply chain executives are in the process of introducing new digital capabilities into their operations.
Digital technologies can eliminate some activities and players involved in the supply chain, which can reduce costs while helping facilitate the creation of new business models. Changes like these are forcing many B2B suppliers to refine their business models to not only take advantage of the new environment — but in many instances, to simply survive.
The challenge many organizations face regarding supply chain management is how to use new trendsetting methods that increase value to customers while retaining the agility to compete. Automation and predictive analytics can help by providing a fresh look at what may be gained with digital technology.
Potential Negative Impacts
Companies may face many negative impacts by failing to create and implement an integrated digital supply chain network, including the following:
- Being slow to respond to missteps or to meet changing customer needs.
- Lower rates of customer retention.
- A loss of market share.
- Limited profit potential and ongoing reduction of profitability.
- The inability to scale the operating environment.
One solution is to create a digital supply chain as an integrated digital network. Your integrated digital supply chain network should:
- Identify value-creating actions that will realize specified business outcomes.
- Create connectivity, visibility and clear communications with customers and stakeholders.
- Design the supply chain operation by intersecting suppliers, products or services and customers.
- Tailor customer experiences around individualized and customized services through flexible channels.
Perhaps most importantly, an integrated digital supply chain network will create an operating environment that makes capturing ubiquitous data a high priority. This data should provide information that enables you to deliver the best possible customer experiences that are tailored to unique customer needs.
Realize Positive Outcomes
Your organization could realize multiple positive outcomes by creating an integrated digital supply chain network, including the following:
- An enhanced ability to identify, diagnose and correct potential supply disruptions.
- A greater ability to recover and address supply chain delays faster, usually in real time.
- Improved customer relations and higher customer retention rates.
- The ability to meet customers’ current needs right now as well as new demands in the future.
- Greater quality control and improvements.
- A unique competitive advantage.
- Higher profitability and more market share.
Practically all organizations today are looking to provide more value to their customers and shareholders. This is especially true for organizations that are heavily involved in supply chain management. Implementing an integrated digital supply chain network is one way to obtain the added value you’re seeking. Digital technologies can eliminate some activities and players involved in the supply chain, which can reduce costs while helping facilitate the creation of new business models. An outsourced CFO services provider can help you create and implement an integrated digital supply chain network.
John W. Braine, Partner, CFO Edge, LLC
1 The Way Forward: The Digital Supply Network; Kris Timmermans; CFO.com; November 22, 2016