Digital Supply Chain

06/07/18

Digital Supply Chain | PwC

Behind the potential of the Digital Supply Chain lies Industry 4.0, the transformation of industry through digitization. As the technology development continues in an unprecedented pace, executives need to act with speed and commitment to identify and selectively leverage the right technologies for their operations.
 

The supply chain today is a series of largely discrete, siloed steps taken through marketing, product development, manufacturing, and distribution, and finally into the hands of the customer. Digitization brings down those walls, and the chain becomes a completely integrated ecosystem that is fully transparent to all the players involved — from the suppliers of raw materials, components, and parts, to the transporters of those supplies and finished goods, and finally to the customers demanding fulfillment.
 

The importance of being a first mover

Customers will be at the center of the changes to value chains, products and services. Products, systems and services will be increasingly customized to customer needs, and companies plan to use data analytics to understand and meet them. First movers who are able to establish successful industrial platforms will have a significant advantage over competitors. Ultimately, industrial companies will need to own relationships with the end customers who drive demand or at least integrate with platforms that allow them to access the end customers efficiently.
 

On the path towards a digital eco system

Powered by data and connectivity, Digital Supply Chain will drive digitization in supply chain planning and visibility, procurement, warehousing, spare-parts management logistics, and prescriptive supply chain analytics, In sum, it is leading us on the path towards a digital ecosystem with more flexibility, virtualization, and integrated collaboration both internally and with value chain partners.

The Digital Supply Chain ecosystem will be based on implementation of a wide range of new digital technologies. Together, these technologies will enable new business models, the digitization of products and services, and the digitization and integration of every link in a company’s value chain (i.e. the digital workplace, product development and innovation, engineering and manufacturing, distribution, and digital sales channels and customer relationship management).

The Digital Supply Chain ecosystem is key to the operations of every company that manufactures or distributes anything. Indeed, for many companies the supply chain is the business.

In 2018, PwC conducted the Global Digital Operations survey with over 1,000 participants from 6 major industrial sectors. It revealed that by digitizing, companies expect to generate 12.3% in cost reductions whilst increase revenues by 14.7% over the next five years.

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Five steps towards a successful Digital Supply Chain Strategy


Understand your starting point and map out your strategy

When developing the company vision, consider the supply chain design that best supports it, the road map and necessary implementation steps, and the champions who need to be engaged to achieve the vision.
 

Deploy pilot projects

Companies should first carry out smaller pilots to help develop the right capabilities. These pilots should aim at testing the end-to-end flow for a specific supply chain and gain buy-in from the organization as well as funding for a larger roll-out.
 

Define the capabilities needed

Building from the pilot projects, it is important to define what capabilities (organization structure, people, process, and technology) are required to make the roll out of the pilot projects successful.
 

Become a data virtuoso

Develop an effective data analytics strategy that include data platforms, development of a master data management procedure, and organizational structure (e.g. starting with a cross-functional team before embedding the capabilities in a standalone function).
 

Transform into a digital enterprise

A digital culture and mindset is highly collaborative and crosses company boundaries to include partners and customers. To implement such a mindset change, you need strong leadership commitment from top management.
 

Actively plan an ecosystem approach

Breakthrough performance is achieved when companies understand consumer behavior and offer a digital ecosystem and orchestrate its role within an ecosystem of partners, suppliers and customers.

Contact us

Tobias Kihlén

Consulting, PwC Sweden

Tel: +46 725 84 98 43

Peter Malmgren

Partner, Consulting, PwC Sweden

Tel: +46 10 212 45 03

James Persson

Consulting, PwC Sweden

Tel: +46 725 84 92 79

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