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Supply Chain Technologies and Digital Transformation
Create an effective digital supply chain roadmap
A digital supply chain roadmap is a multiyear plan for supply chain technology investment to support business growth.
The best roadmaps address capability, talent and process implications of digital technology on both business and supply chain operating models. Strong collaboration across the end-to-end supply chain is key to build and deploy a digital roadmap successfully. Download this guide to create an effective digital supply chain roadmap:
Must-do steps to document the supply chain organization’s digitalization plan
Roles and responsibilities chart for the supply chain digital transformation project team
Three ways to gain approval from senior supply chain leadership for the digital roadmap
Enable critical business outcomes through digital supply chain transformation
Technology accelerates performance, agility and resilience, and helps to mitigate risk.
Leverage strategic and emerging supply chain technologies and manage impacts to the broader business ecosystem.
- Digital Tech Roadmap
- Digital Tech ROI
- End-to-End Technologies
Develop a multiyear, integrated plan aligned with supply chain strategy
Digital is a key priority for functional leaders, particularly those in the supply chain: A Gartner survey revealed that 82% of CEOs in supply-chain-intensive industries plan to increase investments in digital capabilities across their enterprise. This puts chief supply chain officers (CSCOs) under tremendous pressure to digitalize the supply chain.
Unfortunately, CSCOs often struggle to translate their digital supply chain vision, ambitions and business objectives into an understandable, easily communicated and business-aligned digital transformation roadmap. In fact, according to Gartner research, less than half of CSCOs have defined or plan to implement a supply chain digital transformation roadmap. Of the digital supply chain roadmaps that do exist, only 32% are aligned under a single governance process and to common business goals.
Many supply chains have been too slow to react and are still developing the foundational physical capabilities required to compete today, let alone develop, test, deploy and scale digital innovation effectively.
Supply chain digital transformation is proven to mitigate supply chain risk and optimize supply chain cost, but it requires strong alignment between business and supply chain strategy to succeed.
It also requires technical skills, including advanced analytics, business skills like cross-functional collaboration and data-driven decision making, and behaviors/traits such as adaptability and risk taking.
Start leveraging supply chain digital technologies to increase business performance by first building a multiyear, integrated digital transformation roadmap that addresses both short-term improvements and a strategic long-term vision.
Effective roadmaps for supply chain digital transformation consider redesigning the planning organization, centralizing the analytics team and building supply chain talent for the future.
Investing in supply chain digital transformation ensures your supply chain can harness and scale the technology and innovation that promise business growth, risk mitigation and cost optimization benefits.
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Establish oversight of the digital tech roadmap and value realization
Sixty-one percent of supply chain organizations identify technology as a source of competitive advantage. Only 1% say they have no plans to invest in emerging technologies over the next five years — the vast majority cite multiple reasons for investing in emerging technologies, with the top 4 being to: support new business, improve supply chain process efficiency and productivity, enhance decision making and improve resiliency/agility amid ongoing supply chain disruption.
The three top areas of emerging technology investment are:
Automation (i.e., supplementing, enhancing or replacing humans with things that can perform tasks independently)
Resiliency (i.e., leveraging technologies to help address growing supply complexities)
Intelligence (i.e., leveraging technology to make better, faster and more enlightened decisions)
These investment areas align very well with the supply chain technology predictions for 2023.
Almost two-thirds of supply chain leaders (65%) are experiencing labor constraints that are guiding them toward investments in cyber-physical automation. They need technologies that can help drive the productivity improvements that will mitigate the impact of labor shortages.
Forty-six percent of supply chain leaders say network complexity is their top external challenge, and so identifying technologies that support agility is key.
Meanwhile, 30% say decision-making speed and quality is the top internal challenge to supply chain management, motivating them to invest in intelligent systems.
To maximize returns on your digital investments, establishing oversight of the execution of the technology roadmap is key. Gartner recommends that supply chain technology leaders take the following actions to better understand future risks and opportunities related to supply chain technology.
Inventory the different decisions made in the short-term time horizon by classifying them into those that can be made autonomously, those that can be automated and those that can be augmented through analytics and artificial intelligence.
Consolidate decision-making models across the supply chain to improve decision-making speed and quality.
Begin to build a digital supply chain twin (DSCT) by identifying key parameters for improving the resiliency of decisions.
Deploy robotic automation that can drive productivity improvements.
Formulate an agile application modernization strategy by conducting a vendor review.
Focus on how to identify and maintain end-to-end supply chain technologies
The global chief supply chain officer (GCSCO) community wrestles with evaluating, selecting and implementing end-to-end supply chain technologies that foster competitive advantage. What supply chain technologies are most important to the success of supply chain transformation?
A recent Gartner survey about supply chain transformation drivers and best practices revealed that supply chain leaders need to prioritize investments in technologies that can enable supply chain strategy.
The survey found that established applications like enterprise resource planning (ERP), supply chain planning (SCP), procurement, omnichannel and logistics have played a significant role in driving supply chain transformations over the past three years.
ERP, in particular, is a critical foundational enabler for an integrated supply chain. Seventeen percent of supply chain professionals in non-C-suite roles ranked ERP the No. 1 most essential technology to supply chain transformations, and those from organizations at a Level 3 supply chain maturity ranked it No. 4.
New digital technologies, on the other hand, were deemed less important to the success of supply chain transformation by supply chain leaders responding to the survey. To be clear, digital twin, augmented reality and control towers have delivered significant benefits for some supply chains, and advanced analytics (as well as artificial intelligence, machine learning and other related technologies that help organizations make better decisions) ranked the No. 2 most essential supply chain transformation technology. But most supply chain leaders surveyed say they have yet to derive the value anticipated from their digital investments.
To succeed in the future supply chain, Gartner recommends that GCSCOs include enterprise applications in their digital supply chain roadmaps and explain to stakeholders — especially senior executives — the critical role more traditional technologies play in supply chain transformations.
Video: Client testimonial from Infineum
The Global Supply Chain and Procurement Director discusses how Gartner helped him build the business case for supply chain digital transformation, as well as measure and benchmark technology and processes.
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Frequently asked questions
What is the role of technology in supply chains?
CEOs and CSCOs are increasing digital supply chain investments in response to supply chain disruptions. Technology leaders need to align supply chain design and transformation initiatives with technology strategy.
How is technology changing the supply chain?
Supply chain ecosystems have been around a long time, but now nearly every organization is digitally connected with its trading partners. Technologies like blockchain are critical to the creation of a trusted digital ecosystem.
What main technologies will transform the supply chain?
Demand from intelligent machines, algorithms and bots will progressively drive revenue. Supply chain leaders must respond by digitally integrating the ecosystem, using secure and unbiased data, and automating.
How does digital transformation impact the supply chain?
Cross-functional and network-centric processes and supporting technologies have become a matter of course for succeeding in today’s digital business environment. Such technologies span traditional supply chain domains.
How do you create a digital supply chain roadmap?
Five steps to create a digital supply chain roadmap:
Define the vision for an agile, resilient supply chain.
Determine changes in capability/process.
Prioritize technology investments.
Close digital skill gaps.
Establish governance.
What are the elements of the digital supply chain?
Companies use technology to accelerate performance and manage risk. Supply chain organizations must leverage the opportunities strategic and emerging technologies offer and manage the impacts of these decisions on the business.
How do you implement a digital supply chain?
Create a phased, short- and long-term digital supply chain strategy and roadmap to discover, experiment, pilot and roll out innovative tech. The volatility and speed of changes require an adaptive strategy and an agile roadmap.
What are digital technologies in the supply chain?
Digital technologies in the supply chain are many, and include intralogistics robots, DSCTs and automated or autonomous supply chain planning solutions.
What is the importance of supply chain digital technology?
Innovative supply chain technologies have high potential for positive impacts on people, performance and industries. They support the evolution toward a more holistic, integrated, autonomous and sustainable supply chain.