3 minute read 24 Sep 2019
Supply chain

How to align your supply chain with the new digital reality?

By

Filip Herremans

EY Belgium Advisory Partner

Trusted Supply Chain advisor. Pragmatic and hands-on. Team player. Cycling enthusiast. Caring husband and father.

3 minute read 24 Sep 2019
Related topics Advisory Supply chain Digital

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Digital is the new value creator for companies. It is therefore time for every organization to inject the digital dimension in the DNA of its operating model.

The speed and size of the 4th industrial – digital – revolution is unseen and leads to massive disruption. A traditional linear supply chain is no longer adequately able to answer the demanding digital consumer. Organizations realize that they have to align their supply chain and operations with the new digital reality.

The majority of organizations already pilot innovative technologies here and there but often these are isolated projects in protected lab-like settings. Other businesses are a little more mature and run transverse digital programs in their business. Only a small minority already has real digital DNA that penetrates into every fiber of their operating model.

Reinventing the supply chain

How does a company get a digital DNA? Adjusting the supply chain is not enough: it must fundamentally be reinvented so that the digital dimension becomes inherent in the service offering.

The more or less linear structure of traditional supply chains has also become increasingly less suitable for orchestrating the complex ecosystem that we now see developing. And moreover, higher demands are being made in terms of cost & cash savings. Every part of the supply chain must therefore be questioned and redefined.

4 levels, 5 asset-backed solutions

In my opinion, the redesign of a supply chain takes place at 4 levels. EY offers an overarching Supply Chain Reinvention Framework with asset-backed solutions for all levels.

Level 1: Supply Chain Intelligence

This is the basis: creating end-to-end visibility throughout the entire chain. Measuring and knowing what exactly is happening at the time. That seems obvious, but that is not at all the case. Through Supply Chain Smart Maps, we detect bottle necks & opportunities for businesses.

Level 2: Strategic architecture

This relates to supply chain building blocks, which we will review in terms of strategy and segmentation. A one-size-fits-all supply chain is insufficient today. Conversely, segmentation based on customers and products forms the basis for modern supply chain management in which the way production and distribution must be organized is determined precisely.

Level 3: Integrated Operational Excellence

This level includes the processes and how they can be optimized. For instance, the planning can be automated so that it happens autonomously in due course and planners mainly work on exception management. We developed Integrated Digital Planning, a roadmap to autonomous planning.

Sourcing and procurement can also be optimized via the Supply Side Optimization tool so that the business can make purchases more efficiently and collaborate better with its suppliers.

To increase manufacturing performance, we use Smart Factory, a wide range of concepts and new technologies that enables companies to grow towards industry 4.0.

Finally, we also tackle the outbound supply chain. Through the Digital Fulfilment service, we review how the business could supply more efficiently and with the help of digital technology can connect better with the customer.

Level 4: Supply Chain Resilience

The finishing touch is optimizing the supply chain in relation to the risks and high demands that consumers and governments set in terms of sustainability. For example, waste management and return flows management.

Some companies take many technological initiatives, without it truly being clear how they support the business model, where they are ultimately leading to or how they contribute exactly to the end result. With these companies we develop a vision within which all digital steps are framed so that these organizations not only ‘do’ digital but also ‘be’ digital as an inherent part of their DNA.

On the other hand, there are companies that have a clear vision of how the digital aspect can create value. But either that vision has not yet penetrated the identity strongly enough, or the steps that have to be taken concretely to achieve the goal is unclear. We support those organizations to realize the intended added value.
 

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Summary

How does a company get a digital DNA? Adjusting the supply chain is not enough: it must fundamentally be reinvented so that the digital dimension becomes inherent in the service offering.

About this article

By

Filip Herremans

EY Belgium Advisory Partner

Trusted Supply Chain advisor. Pragmatic and hands-on. Team player. Cycling enthusiast. Caring husband and father.

Related topics Advisory Supply chain Digital