The pillars of a digital supply chain framework

Distilling experience working with cross-functional teams across industry verticals, we have compiled a set of different drivers of change that can help establish a mature supply chain practice. There are 3 key pillars that support this:

• Processes – integral to any end-to-end supply chain function
• Actors – the stakeholders found throughout the entire ecosystem
• Digital capabilities – these include a fully integrated business intelligence ecosystem and can extend to advanced initiatives like IoT integration, AI & machine learning, etc.

Building a strong supply chain foundation

The vision that a digital supply chain seeks to accomplish is increased agility across the supply chain ecosystem along with the ability to create end-to-end visibility into data and information from the raw materials stage to the final shipped product. The integration of organizational systems and partners, such as establishing a robust system of records for seamless data flow from manufacturer to supplier to partner, is vital to make this happen. The most important ingredient, however, is customer-centricity. Focusing on keeping customers informed—for example, if shipment is delayed, inform the customer well in advance—can build trust. It’s also essential to consider different strategic and tactical ways to bring the vision to life. For now, let’s consider our three main pillars in more detail.

Processes – The supply chain can get complex depending on the business lines that one is operating in. Some key considerations to drive efficient processes are:

• Demand Planning & Forecasting: Utilizing data-driven insights to forecast demand accurately and optimize inventory levels.
• Inventory Management: Implementing real-time inventory tracking and automated replenishment processes.
• Logistics & Transportation Optimization: Optimizing routes, modes of transportation, and warehouse operations for efficiency and cost-effectiveness.
• Supplier Collaboration & Management: Enhancing communication and collaboration with suppliers for better visibility and responsiveness.
• Customer Relationship Management: Integrating customer data for better understanding and responsiveness to customer needs.

Actors – The most vital ingredient of all remains the people who play a key role in bringing the digital supply chain vision to execution, including:

• Stakeholders
• Partners
• Supply chain COE teams
• IT
• External vendors
• Suppliers
• End customers

Capabilities – Requires long-term vision and investment, including:

• Advance analytics & predictive modeling
• Cloud-based platforms for storing data and information
• IoT integration
• AI & machine learning
• Data availability (It may be painful to convert those PDFs, invoices, and other documents into digital formats, but once the data ecosystem is set up, you can create magic with real-time, self-service dashboards and practice insights)

By focusing on firmly establishing each of these pillars and cultivating a strong foundation, you will be able to achieve sustainable supply chain practices.

Key indicators to measure the success of your digital supply chain vision

Efficient execution of the digital supply chain will require careful consideration of a variety of KPIs and success factors, including:

• Accuracy of forecast
• Inventory turnover and cost
• Stock outs (for ecommerce companies)
• Customer effort score (how much time customers spend to purchase your product)
• Lead time
• Shipment and delivery times
• CSAT, OSAT, & NPS – measurement criteria of CX

When performance and execution are tied to these indicators, it will allow you to pace your strategy and thoughtfully consider adjustments to help establish a transformative shift in your supply chain management. By focusing on building a robust foundation across these pillars and measuring success carefully, you will be well-equipped to deal with the demands of the digital age.