Digital transformation. It sounds oh-so-glamorous at first. But digitization is not a panacea for the world’s (or even just one company’s) supply chain problems. While it’s true that automating and digitizing once-tedious and time-consuming processes can increase profitability, efficiency and sustainability across the supply chain, internal legacy issues with visibility and slow decision-making can’t be eradicated by technology alone.
From the boardroom to sales to manufacturers, suppliers and customers, digital transformation requires a culture shift around a shared vision for innovation. “A shift in mindset and cross-company collaboration is key,” said Polly Mitchell-Guthrie, Vice President of Industry Outreach and Thought Leadership at Kinaxis.
A successful digital transformation strategy requires that companies first take a look within and analyze which current processes and systems may be contributing to data latencies, collaboration and communication barriers, talent gaps, inefficiencies and bottlenecks around the world. Once you’re internally aligned with a true understanding of what’s going on in your business today, orchestrating an effective transformation for tomorrow’s success becomes a business-wide approach — instead of a siloed attempt in the C-suite that likely won’t gain traction across the end-to-end supply chain.
You can’t just set it and forget it
Championing digital transformation requires more than a magic wand or “plug and play” approach. Even the best technology is virtually worthless if everyone isn’t able, available and on board to use it. Without the proper talent, employee training and company-wide desire to evolve in place, people will inevitably revert to their old ways, using antiquated and siloed tools like Excel. Plus, the systems you already have in place have to keep running smoothly as you roll out digitization plans.
Digital transformation does not happen with the flip of a switch. It requires ongoing strategic efforts to create a balance among new technologies, strategic solutions and traditional systems. This is why the aforementioned culture shift is essential before starting your transformation journey. As Raconteur author Ben Rossi says in this “Digital innovation and the supply chain” report, “A top-down mandate from board level to drive supply chain transformation is critical to getting the rest of the company to collaborate and change their mindset. Without that, heads of supply chain will run into resistance to change, in turn reducing the chance of achieving the broader transformation goals.”
The most dangerous thing you can do is nothing
Supply chain is a constantly moving target. What works today may not have worked yesterday and may not work tomorrow, either. We’re always at the mercy of unforeseen events and disruptions like government regulations, tariffs, geopolitical upheaval, financial crises, pandemics and natural disasters that have the power to change the face of the global supply chain overnight. This means that digital transformation for supply chains is no longer an option – it’s a necessity. In order to stay competitive, reduce risk, meet and exceed rising customer demands, and keep up with the rapid pace of change, business leaders must begin to look at digitization as an investment, not a cost. In fact, according to the Raconteur report, 82 percent of survey respondents reported that for every £10 invested in digitizing the supplier sourcing process, they saved at least £38.
Complacency in a volatile marketplace is certain death for sophisticated supply chains. The time to invest in digital transformation, artificial intelligence and real-time scenario planning is now. Those who don’t will only realize it’s too late in the eleventh hour when their only hope left will be a fairy godmother to work her magic.
To learn more about digital innovation for the end-to-end supply chain, read the full Raconteur report now.