Three steps towards building a digital supply chain

With the pandemic impacting businesses across sectors and geographies, nearly every business today is looking to reinvent its supply chains to make it shock-proof and future-ready. This idea looks good on paper, but it is easier said than done. With the changing consumer behaviors, technology trends and environmental factors, the old and analogue supply chain strategy, i.e., building higher capacity and in-turn reducing transport costs, the “just-in-time” inventory strategy, among others, may not be value accretive for the organization and may not effectively respond to supply chain shocks. An agile and digital supply chain consisting of intelligent monitoring, data capturing and management, crisis and exception management frameworks among other features is a massive game-changer for businesses.

But there is no technological shortcut to this digital transformation of the supply chain. Only adding technology to the supply chain management systems and processes for the sake of building a digital supply chain is a recipe for failure. It will not solve the existing problems linked to forecasting, stockouts, higher inventories, unplanned shipments, unpredictable lead times, etc. Hence, the following are the three steps towards building an agile and resilient digital supply chain:

1. Integrated digital supply chain planning through center of excellence: Creating a multi-functional center of excellence can be a great first step to enable a true end-to-end synchronization in supply chain systems and processes. This center of excellence can enable better governance and collaboration across functions, thereby, breaking down functional silos; run risk assessment tests; formulate alternative supplier sourcing strategies; streamline process flows and improve data quality across the value chain — suppliers, manufacturing sites, distribution centers, distributors and key customers. This will allow the organization to get better insights into effective decision making – all of which are required to drive profitable growth in a transparent and sustainable manner. To enable the planning process, EY’s Asterisk Supply Chain Planning Solutions, leveraging artificial intelligence and best of breed machine learning algorithms can be put to task to build a more responsive supply chain.