Digital Transformation for the Connected Supply Chain

Digital transformation can lay the integration framework to help capture and capitalize on end-to-end supply chain data.

Mahesh Rajasekharan
Mahesh Rajasekharan

The world today is evolving into a massive digital network, and it’s an ongoing battle for many organizations to stay connected and in communication with their trading partner networks. This complex nature of global business means technologies and requirements change without notice, and just when companies think they found a tool that works for them, a new requirement emerges.

This also means supply chains are more global and connected than ever before, and just as complex given the rapid adoption of Internet of Things (IoT)-connected devices, RFID chips, GPS tracking and other modern technologies. However, legacy systems supporting these networks often don’t integrate with one another and create organizational data silos. Central visibility into the information flowing within and beyond the four walls of an organization is limited, and gaining clearer insights into your supply chain cannot happen organically.

And that’s too bad, because across the connected supply chain—easily one of the largest and most critical elements in any global company—there is a wealth of valuable insights. Things like manufacturing lead times, the cost of various raw materials and subassemblies, product availability data for suppliers, shipping and logistics estimates, and demand forecasts from end customers could bring immediate value to a business and its partner network.

Such information, when properly aggregated, gives organizations the ability to proactively shape demand based on pricing and promotions, for example, as well as deliver precise inventory levels across warehouses and stores for original equipment manufacturers (OEMs) and for retailers. Developing a digital transformation strategy for achieving an end-to-end supply chain can lay the integration framework to help capture and capitalize on this information.

But digital transformation is more than just signing a purchase order for the supposed latest and greatest technology that could change the way you do business. Digital transformation means you equipped your business with the technology and skills to take on its constantly evolving challenges. When companies integrate their people, systems, devices and partner communities, they are positioned to break down organizational silos and gain value from a centralized view of critical business information, especially within the supply chain.

But that’s easier said than done. Companies operate in a multi-enterprise business ecosystem, and many are just now beginning to realize the added value of integrating partner and customer communities. Transforming their traditional supply chain frameworks that rely on IT-supported processes into more flexible and collaborative digital models is a massive undertaking, one that cannot happen overnight.

The multimillion-dollar (or even multibillion-dollar) question, then, is: What is the proper roadmap for leveraging digital innovation in your business to gain visibility, extract value and expand market reach?

The answer to that varies by business and even by industry, but by embracing next-generation integration technology that easily adapts to emerging digital requirements and scales with the business, and fully engaging people with the operational strategy of these technologies, organizations enable an agile and connected supply chain.

Key Considerations

Companies undoubtedly must embrace innovation and modernize IT infrastructures, which are foundational to achieve any digital transformation outcome, including the digital customer experience, omnichannel experience and the development of a digitally enabled workforce. But the technologies that enable digital transformation are constantly evolving, and they certainly do not come from one vendor or one platform.

Thus, companies should focus on best-of-breed vendors because a focus on a single vendor or platform is unlikely to meet the technology footprint companies require to modernize IT infrastructure and enable operational agility. One essential component of the supply chain infrastructure, however, is business-to-business (B2B) functionality.

Since any business contact outside the walls of an enterprise is a B2B-type relationship, be it connecting with various cloud infrastructures, working with processes and applications that span international boundaries, or interacting with customers and suppliers, it is critically important to have robust B2B functionality driving these transactions.

While integration needs may further extend across the fragile relationship between cloud services, social networks and IoT devices, the B2B foundation is critical. These integration technologies must not only be able to support robust systematic B2B workflows, but also the cooperative workflows, where human interaction, collaboration and approvals are required.

And that’s why supporting human integration—the role people play in consuming and transmitting data—also is fundamental to digitally transform the business and its supply chain. Some considerations for enabling your workforce during a strategic business shift include:

  • Convenience. Self-service is critical for operations and business users to adopt digital solutions without waiting for the IT department to help. This enables rapid adoption and empowerment among every employee engaged in executing the business processes.
  • Security. Data security concerns make headlines every day. Security is paramount, not just for regulatory compliance and governance, but also for business users to know they can safely and securely share information for collaboration across teams and decision-making.
  • Insight. Timely business and operational insights to decision-makers deliver the ability to rapidly correct course and/or implement exception-based workflows, a must for a constantly evolving digital ecosystem.

The robust, flexible technology connecting storage repositories, applications and systems must be designed for people-based workflows, but you also need the enterprise-wide commitment to negotiate such a radical business change.

The Transformation Buy-In

To successfully deploy a digital transformation strategy, enterprise architects and CIOs need to first focus on creating a roadmap to implement their key digital business strategies and the technologies required to get there. These leaders must then adopt and fully commit to the forward-thinking technologies required to digitally transform their businesses now and in the future.

To succeed in achieving digital agility, organizations should focus on three key aspects, a blend of technology and human capabilities:

  1. Analytical and visualization tools that increase confidence in line-of-business (LOB) managers.
  2. Self-service capabilities and the ability to scale pilot projects.
  3. Cultural change management, as well as redesigned workflows and jobs.

The one most heavily invested in is the targeted analytics and visualization platforms to conduct exploratory pilots. However, beyond executive management, most LOB managers do not fully buy into the financial benefits or understand the decisions predicted by the models. This is why we still see a lot of exploratory data work that is broad-based in nature and not focused on specific use cases that create impact.

Further, after successful pilots, projects stall and get bogged down without being fully operationalized. The main reason for this challenge is that the current data platforms are IT-intensive, lacking the self-service capabilities and automation to scale from pilot to production.

Finally, there is still much skepticism among the front-line managers who lack in-depth analytics training to trust the results of these analytics and apply them to run their departments. This requires a cultural transformation with a lot of training, talent augmentation, and redesign of workflows and jobs.

Fully embracing game-changing Big Data and digital transformation initiatives for the supply chain, then, means businesses must:

  • Integrate these initiatives as part of LOB objectives and metrics.
  • Implement the right data fabric and integration tools with self-service capabilities, automation and industrial-strength scaling to operationalize these projects.
  • Train front-line managers in functions such as customer service, sales and manufacturing to understand these initiatives, leverage digital business insights in transacting business and embrace the power of analytics.

Without the LOB leadership’s full understanding and alignment, and the front line fully enabled and engaged, it is difficult for companies to derive value from their digital transformation initiatives, even if the organizational silos are eliminated and integrated data flows freely.

Digital transformation technologies can help deliver elevated business intelligence to create a level of operational efficiency across the extended supply chain previously unimaginable. Investing in the tools to support these technologies, then, can significantly reduce costs, and create extraordinary value for companies and consumers.

But for digital business transformation initiatives to begin, companies require modern, agile integration technology and strategies for deployment. For these initiatives to succeed, the humans involved and responsible for these strategies need to be able to fully participate with the technologies, have the peace of mind that the data is safe and secure, and leverage the operational insights gained.

Thus, an integrated approach enables companies to break down the organizational data silos that limit the value they can extract and the service they can offer partners, suppliers and, most importantly, customers.