Subscribe

Subscribe to Our Blog

The Rise of the Intelligent Digital Supply Chain

Tue Aug 29 00:00:00 EDT 2017

Many consider Henry Ford and the automotive assembly line to be the birth of the modern supply chain, which goes something like this: 

  • Suppliers provide the raw materials to  
  • Manufacturers that pass off the finished products to 
  • Distributors that provide select amounts of that product to  
  • Retail outlets that ultimate sell products to consumers. 

Since then, we’ve seen incremental changes that streamline and perfect this formula, but for the most part it's been an evolution. While the traditional supply chain model has served us well, new pressures are requiring a fundamental rethinking of how we approach supply chain management.  

Globalization 

The concept of globalization has changed in just a decade. "What links the world together has changed fundamentally – and for many companies, succeeding in this new operating environment will require rethinking many past decisions and assumptions," says the Harvard Business Review

The same is true with the supply chain. As manufacturing moves around the world based on labor costs and government investments, products are now developed for global markets and components are sourced from global suppliers.  

The access to a worldwide network presents unprecedented opportunities for companies to reach scale and efficiency. A large manufacturer in the U.S. can find the best deal on a component from a small supplier in Bangladesh. For large enterprises, digital supply chain orchestration can be key.  

Product Complexity 

The Internet of Things (IoT) enables a multitude of otherwise mundane products -- tooth brushes, kettles and vacuum cleaners, just to name a few -- with exciting new possibilities for connectivity, utility and, for manufacturers, complexity. As product intelligence heightens, so too does the challenge for meaningfully integrating data and functions that keep pace for consumer demands.    

Reduced Product Development Cycles 

It took the telephone 75 years to reach half of the population in the U.S. The smartphone did it in under 10 years. It's no wonder then that speeding time-to-market is such a critical requirement for brands.  

Numerous companies, especially those in consumer goods and electronics, are seeking to gain advantage through accelerated product introduction. This places a greater demand for more proactive forecasting and planning in the supply chain by applying analytics that increase accuracy amidst rapid change.  

Mass Customization 

Today's buyers have radically higher expectations than previous generations when they go to market. These tech-savvy millennials and Gen-Z consumers make full use of mobile and social platforms throughout their buying process.  

They expect a thought-through customer experience with greater control to personalize the products they buy in the era of instant gratification.  

Diminishing Natural Resources 

At the current level of global demand, Earth has only enough natural resources to support two billion people sustainably. This means that supply chains need to follow a type of closed-loop system, where the products they create get recycled for parts to be used in new products. 

According to Supply Chain Management Review, "supply chain managers are entering a new era where assumptions of unlimited resource availability are unwise at best and could be disastrous for the sustainability of supply chain flows." To remain competitive, companies will need to understand the forces that affect resource scarcity in their supply chains and plan accordingly.   

Pace of Business Change 

Lower barriers to entry require companies to move at the speed of digital to avoid disruption. With the increase in ways new entrants can bring their products to market, competition is fierce for companies of all sizes. No one is safe at the top of the mountain.  

While the pressures of these trends guide us to think about the supply chain differently, these technologies have been enabling change: 

Internet of Things, Big Data and the Cloud 

Miniaturization is making it possible to connect everything. As discussed earlier, the IoT is providing companies with the ability to capture and analyze new types of data – and that's not it. Sensors and controls embedded in industrial systems are creating a torrent of data that is doubling every year.  

Advances in technology including high-volume data storage, real-time analytics and cloud computing have led to explosive interest in IoT products and implementations. IoT data analytics will change the way companies develop and manufacture products and redefine the way companies interact with their customers. 

For the intelligent digital supply chain, that means we will be able to: 

  • Make data-driven decisions: End-to-end, real-time and actionable analytics will help us answer the toughest questions about our supply chains. 
  • Maintain global intelligence: Providing the same point-of-view to all stakeholders allows for better forecasting and collaboration. 
  • Get to market faster: Move from new product introduction to high-volume production faster than ever. 
  • Increase flexibility: Respond to supply and demand changes in minutes, not weeks. 
  • Focus on innovation: By automating administrative tasks, teams will have the time to focus on new opportunities.  

Check out the Slideshare below to learn how the intelligent digital supply chain will change everything