All About The Present State of Digital Supply Chain Maturity & the Future
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Supply chains typically operate in silos, where the various stakeholders right from the suppliers, manufacturers, distributors and retailers do not freely exchange the information related to the products and services. Digitisation helps to bring the information out of these silos and create an integrated supply chain, where the information flows freely. For the organizations to be competitive, supply chains need to be efficient. Free flow of information helps to bring the cost down and efficiency up.
To gauge the maturity of supply chains in Asia, a research survey was conducted to gauge the maturity of supply chain across India, the Middle East and Asia Pacific region. The survey received more than 250 responses from the leading multi-nationals and regional organizations representing consumer goods, energy, logistics services, e-commerce, finance and other sectors. .
The annual turnover of respondents ranged from less than USD 2 Billion to more than USD 15 Billion.
Key Findings & Analysis
Focus areas of digital supply chain investment
The respondents divide their digital supply chain investments in three categories. First category is “Must Have” technology group, which includes Big Data Analytics, Cloud Computing, Internet of Things and Connected Devices. Consumer goods, logistics services and energy sectors are investing aggressively in these technologies. The second category is “Fear of Missing Out” or FOMO group, which include Blockchain, Cognitive Computing and Blockchain. In this category, organizations are investing because they want to keep up with their competitors in the adoption of technology. These technologies may or may not be relevant for them today. The third category is that of “Emerging Technologies” that are yet to prove themselves as differentiators. They include Three D Printing, Virtual and Augmented Reality.
It was also found that e-Commerce sector invests in technologies to improve the last mile deliveries, consumer goods sector invests in technology to improve their operations, procurement and planning functions. The focus of energy sector is to invest in technologies that would improve their planning and strategic decisions.
Digital supply chain strategy
One of the most interesting findings of the survey is that more than 40% of responding organizations do not have digital strategy. These organizations fall in less than USD 2 Billion turnover category. About 25% of the respondents have digital strategy without governance and 30% have digital strategy with governance. Those organizations who have digital strategy are large organizations with more than USD 10 Billion turnover.
It was also found that the organizations performed better when the digital supply chain strategy was owned by Chief Executive Officer or Chief Operating Officer compared to the cases when the ownership of strategy was with Chief Procurement Officer or Chief Information Officer.
Technology is changing at a fast pace and the organizations must refresh their digital strategy frequently to keep up with the rapid changes. This was proved, when this survey found that the organisations who refreshed their digital strategy quarterly or half yearly performed better, compared to those who did the same on yearly basis.
Digital supply chain enablement
It was interesting to find that both small and large organizations innovate, but for different reasons. Small organizations innovate to fuel growth with the help of supply chain analytics and large organizations innovate to protect market share through supply chain analytics and logistics control towers. The focus of medium sized organization is on achieving supply chain efficiency rather than being innovative.
Barriers to Digitisation
Lack of correct talent and organizational culture are the key barriers to successful implementation of digital supply chain. These are followed by other constraints, such as budgetary constraints and lack of technology maturity.
It is not surprising to find that the lack of correct talent is one of the major barriers to digitisation. Though the technology has progressed rapidly, the talent development has not kept pace with it. Educational institutions and Universities are still following the old curriculum. There is an urgent need for infusion of technological inputs to upgrade the knowledge imparted to the business leaders of future.
The research concludes that digitisation is inevitable for the survival and growth of organizations and the same cannot be wished away. To achieve this,the organisations must have a well defined digital strategy to remain competitive in the global market. This strategy must consider organisational needs, priorities and clear objectives. Some of the objectives could be superior customer experience, cost competitiveness, supply chain security, tighter management control over the operations and sustainability. The ownership of digital strategy should be with the top leadership of the organisation, so that the related decision making and implementation is fast. The digital strategy should be refreshed frequently in consultation with internal and external stakeholders. Finally, the barriers to successful digitisation should be removed by infusion of new talent, who are qualified and knowledgeable in the adoption and use of new technologies.