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PA OPINION

Digital supply chain: why it pays to be bold

Industry 4.0 technologies are becoming mainstream. Advanced sensors, data analytics, advanced robotics, additive manufacturing, mobile, augmented and virtual reality, and highly integrated systems – all are starting to transform consumer-driven supply chains.

But not every business is getting the full potential from these technologies. Instead, many are creating a portfolio of disconnected point solutions, making cost reduction the priority and typically aiming to achieve pay-back within two years.

Don't get us wrong. Point solutions create value. But they also leave significant value untapped. With no strategic ambition guiding these investments, opportunities to transform customer experience or improve end-to-end performance are missed. And because point solutions build complexity, they reduce agility in the supply chain.

Applying digital technologies with a bolder vision can help you realise more value. Here are three ways thinking bigger can help you tap into the transformational potential of digital in the supply chain.

Improve performance

One way to begin is by thinking about the type of performance improvements you want to achieve. Do you want to increase capacity within your existing footprint? Reduce costs? Enhance yield? Cut time to market? Make your performance ambitions the starting point, then identify the technologies that can get you there.

If, for example, reducing time to market is your goal then integrated systems can help you achieve smoother, faster hand-over of information and tasks between functions. Simulation technologies can eliminate the need for physical development and testing of products. And 3D printing can help you customise products to a level that’s otherwise impractical. Understanding the potential impact of such technologies on your supply chain can be difficult. That’s why we start with our proprietary value analysis tool when helping clients explore how different technologies support different scenarios.

Increase agility 

Another ambition could be to build agility. An agile supply chain can help you enter new markets faster, make it easier to manage volatility in demand or supply, and accelerate product development. If this is your goal, you might want to establish flexible, modular factories, with production lines that can be quickly reconfigured to meet changing demand. On the technology front, digitising data and putting modular digital platforms at the core of the supply chain hold the key to realising this type of agility.

Enhance customer experience

Do something different. Imagine a wildly different customer experience, understand the digital technology that enables it and collaborate across functions to create a business case that is exactly that: a case for the business, not for a function.

How different could the customer experience be? Imagine, for example, improving the quality of treatment and reducing the trouble and stress endured by couples undergoing IVF treatment through remote diagnostics by providing home blood test capabilities linked to tailoring of drugs to increase the chances of success. Currently the National Health Service in the UK provides treatment based on a standard approach while some private clinics provide more bespoke treatment but this requires the patient to visit the clinic twice a day for blood testing.

How to get there

The principle of starting with a vision and selecting technologies according to the value they’ll deliver is sound. But even with these fundamentals in place, there are plenty of challenges ahead. From de-risking and integrating new applications to developing new core capabilities like Agile, software development, data analytics, innovation and collaboration.

Creating a digital supply chain can feel like a tall order. You’ll need to move from a legacy supply model, characterised by reactive decision-making, poor asset utilisation and functional cost management. Instead, you’ll need a digital supply model where decision-making is pro-active, asset utilisation is high and greater agility supports a transformed customer experience. But by getting this transformation right, you’ll drive more value. Are you ready to get more from digital in your supply chain?

AI and Robotics automation in consumer-driven supply chains

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Find out more about our work in digital

Digital supply chain

Carlo Gagliardi

Carlo Gagliardi

Will Shepherd

Will Shepherd

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