What is a Digital Supply Chain? [Digitization of Supply Chain Management]

Summary

In this video, Eric Kimberly, CEO of Third Stage Consulting, discusses the growing trend of digital supply chains and their importance in modern business. He emphasizes that a digital supply chain starts with improving business processes and selecting the right technologies. Eric highlights the significance of diversifying vendor bases, leveraging specialized software, and adopting change management strategies to enhance human performance. He stresses the importance of data analytics and visibility for optimizing supply chains, and offers resources for businesses to navigate their digital transformation journey successfully.

Takeaways

• 🌐 The 2020s are characterized by rapid digitization of supply chains, a trend that continues to accelerate.
• 👤 Eric Kimberly, CEO of Third Stage Consulting, discusses the importance of digital transformation for supply chains, especially post-COVID-19.
• 🔄 A digital supply chain involves the use of technology to automate and improve supply chain processes, enhancing business operations.
• 🛠️ The first step to a digital supply chain is defining and improving business processes, which are broad and cross-functional in nature.
• 📈 Post-pandemic, supply chain managers have recognized the need to diversify vendor bases to mitigate risks and ensure resilience.
• 📊 Process improvements, such as vendor scorecard tracking, are crucial for enhancing supply chain management.
• 💡 Organizations must define their future state supply chain and then seek technologies that align with these goals.
• 🛒 Options for supply chain technology include specialized software for functions like procurement, logistics, and ERP systems for broader integration.
• 👥 The human aspect is critical in supply chain digitization; organizational change management is key to ensuring successful adoption.
• 📊 Analytics and metrics are vital for managing the supply chain effectively, requiring clean, accurate data and visibility.
• 🌟 Tailoring a digital supply chain strategy to fit an organization's specific goals and objectives is essential for success.

Q & A

What is a digital supply chain?

A digital supply chain involves the use of technology to automate, improve, and manage supply chain processes. It focuses on enhancing visibility, efficiency, and decision-making through the use of digital tools, such as software for procurement, logistics, and analytics.

Why is it important to focus on business processes before implementing a digital supply chain?

Defining business processes is essential because technology alone won’t solve supply chain issues. You need to first understand and refine processes, such as procurement, production, and vendor management, to ensure that the technology enhances these operations effectively.

How did the COVID-19 pandemic highlight the need for improvements in supply chains?

The pandemic exposed vulnerabilities in supply chains, particularly the reliance on single vendors. When these vendors could not fulfill demand, supply chain disruptions occurred. This highlighted the need for diversifying vendor bases and improving vendor management processes.

What is an example of a process improvement in modern supply chains?

One example is diversifying vendor bases to reduce reliance on a single supplier. Another improvement is implementing vendor scorecards to measure supplier performance, helping to identify the most reliable vendors and mitigate risks.

What types of software are available for automating supply chain processes?

There are specialized supply chain management software options like Manhattan Associates and Blue Yonder for end-to-end management. There are also more focused tools such as Ariba for procurement and transportation management software for logistics. Broader enterprise-wide ERP systems can integrate supply chain with other business functions like finance.

Why is organizational change management important in digital supply chain transformations?

Organizational change management ensures that employees understand and adapt to new technologies and processes. It focuses on training, adoption strategies, and redefining job roles, which are critical to successfully implementing and benefiting from a digital supply chain.

How can supply chain managers improve human performance in the context of a digital supply chain?

Managers can improve human performance by clearly defining new roles and responsibilities, ensuring that employees are trained in new processes, and creating a change management strategy to help staff adapt to new technologies and workflows.

What role does data play in a digital supply chain?

Data is crucial for driving visibility and decision-making in a digital supply chain. Clean and accurate data enables better forecasting, reporting, and performance tracking, helping companies manage their operations more effectively.

What are some key metrics to track in a digital supply chain?

Key metrics include supplier performance, inventory levels, lead times, on-time deliveries, and overall efficiency of the supply chain. These metrics help businesses make data-driven decisions and optimize their operations.

What resources does Third Stage Consulting provide for organizations looking to modernize their supply chains?

Third Stage Consulting offers resources such as the annual Digital Transformation Report, which includes best practices, strategies, and independent software reviews. They also provide guidance on organizational change management and technology selection.