Digital Supply Chain

Advances in digital technology are having a massive impact on the world around us and leading to significant changes in customer behavior. Today, connected customers behave digitally, responding to social media trends, and taking part in online conversations across a vast interconnected global community.

However, many supply chains can’t keep up. That’s because they structure in a very traditional and sequential way. Let’s take a look at how a typical company with a traditional supply chain would react to a sudden peak in demand.

 

A celebrity posts a picture offer bag on Instagram, creating excitement, and generating a sudden demand for the product across the world.

The bag manufacturers demand forecast based on a backward look at previous sales. So, when their sales reports show their product has sold out unexpectedly, they wake up and go into firefighting mode.

The company adjusts its forecast to reflect the new level of demand and then realizes that they don’t have the materials or the production capacity to make replacements. So, they call their suppliers, but they don’t have the materials available. The bank manufacturer asks them to order new materials and expedite shipments leading to additional costs. Finally, when the materials arrived, and the products produced, they then have to be transported to the stores. This sudden supply and demand did not plan for in advance, which means premium shipping costs. 

All in all, it has taken the company around 4 months to replenish their product. Unfortunately, the customer wasn’t going to wait that long, and in the meantime, they bought a similar product from a rival manufacturer.

In the end, with the unplanned additional cost and the unsold products, a bag manufacturer made a loss out of the whole experience. 

 

However, it doesn’t have to be like this. We believe that traditional supply chains must evolve into interconnected smart and highly efficient supply chain ecosystems. 

All in all, it has taken the company around 4 months to replenish their product. Unfortunately, the customer wasn’t going to wait that long, and in the meantime, they bought a similar product from a rival manufacturer.

In the end, with the unplanned additional cost and the unsold products, a bag manufacturer made a loss out of the whole experience. 

 

However, it doesn’t have to be like this. We believe that traditional supply chains must evolve into interconnected smart and highly efficient supply chain ecosystems.

With layers to address custom solutions and digital operations companies who can set up and run customer solutions and digital operations ecosystem empower themselves to manage and efficiently fulfill customer needs across multiple channels proactively. Quickly identifying changes in demand and organizing their supply chain accordingly. 

In this way, they can turn their supply chain into a real competitive advantage and use it as an enabler for new digital business models.

Let’s look at how a company with a digital supply chain would have reacted to a similar peak demand situation. The company’s proactive sensing capability, including social media tracking, identifies a peak in demand early. The production plan is adjusted automatically. Thanks to a direct link between demand and manufacturing. At the same time, an updated demand plan shared with all relevant suppliers who immediately include the new requirements in their material planning and adjust their manufacturing priorities accordingly.

Meanwhile, the customer can track the progress of the order keeping up to date on when its manufacture and when it is delivered. Moreover, throughout the process, the supply chain transparency solution monitors relevant supply chain data from a variety of internal-external structured and unstructured sources enabling proactive risk management for the last mile delivery to the customer — the company leverage as an established flexible logistics network with a shared infrastructure. 

 

The result – companies that leverage digital supply chain corporate with the versatility and agility that needed in the digital age – that means happy customers and flowing profits.

 

Supply chains are incredibly complicated organisms, and no company has exceeded in building one that’s genuinely digital yet. The companies that get there first, gain a tremendous advantage in the race to industry 4.0 and able to influence the technical standards for the future of their industry.

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