Transitioning to a Digital Supply Network
In an increasingly digital world, surrounded by connected devices, manufacturers are recognizing the necessity and benefits of moving from a linear supply chain model to a flexible, digital supply network (DSN). DSNs integrate data and information from the various sources that contribute to the production and distribution of manufactured goods. This data is available instantaneously, allowing manufacturers to make quick decisions and adapt to changing market needs. Additionally, DSNs reduce product costs, increase profitability, and improve quality.
With wide-ranging benefits, one would expect that a majority of manufacturers have implemented DSNs. According to a survey conducted by MAPI and Deloitte of more than 200 manufacturing organizations, 51% of respondents believe their DSN maturity is “above average,” yet only 28% of respondents have started implementing DSN solutions.
Why are manufacturers taking so long to implement DSNs? Typical organizational barriers are getting in the way; budget and funding, data fragmentation, lack of strategy, and the ability to scale up initiatives at the supplier ecosystem level are the top barriers noted by respondents. Additionally, transitioning from a traditional supply chain to a DSN is unique to every organization and based on existing infrastructure, talent base, culture, and technical requirements.
Organizations should consider the following questions:
- What is the strategic vision we are working toward?
- How are we going to win?
- How do we execute in sprints to start down this path even if we don’t have all the details ironed out?
Undertaking an entire overhaul of a supply chain can be overwhelming. Therefore manufacturers should consider a “Digital Foundry" approach of executing transition in sprints starting with the ideas that have the highest potential impact and adjusting along the way.
To learn more about the survey and recommendations for implementing a DSN, read the full report.