Digitizing the supply chain can transform a company’s ability to anticipate and serve customer needs; manage the supply chain for agility, reliability, and efficiency; and use supply chain excellence as a source of competitive advantage.
Companies have been using digital supply chain technologies such as planning systems for years to improve service and reduce cost. But now, thanks to the range, power, and accessibility of digital technologies—including advanced analytics and cloud-based solutions—companies are generating dramatically better returns on their investments. Leaders in digital supply chain have more than 40% higher operating margins and at least 20% lower working capital.
Value realization in digital supply chains requires the focus of digital technologies on business imperatives and embedding these in the business processes. Some of the highest value use cases include:
- Understanding and predicting customer needs and more accurately match them to supply and inventory
- Optimizing the network by creating a virtual digital twin of the supply chain which optimizes the manufacturing, distribution, and logistics footprint
- Bringing end-to-end visibility to material flows, enabling performance management, operational interventions, predictive and self-adjusting supply chains
To support our client digital supply chain objectives, BCG has used machine learning predictive analytics, optimization algorithms, computer vision, IoT sensors, blockchain, and other innovative technologies to bring real-time, end-to-end visibility over the supply chain; enable control tower and advanced planning applications; and optimize the performance of operations. Our projects expand across four dimensions:
- Define the digital supply chain vision, identify and prioritize the most valuable use cases, and develop a transformation roadmap.
- Design and build capabilities for all supply chain phases by leveraging end-to-end visibility and advanced analytics.
- Optimize the physical supply chain network, end-to-end inventory, supply chain plan, and operations.
- Enable clients in their digital journey by transforming their organization; talent and skillsets; business processes; and IT, data, and analytics infrastructure.
Our Digital Supply Chain program helps clients carry out this transformation, in a self-funded three-step approach:
- Step One: Envision. Ideate and prioritize use cases.
- Step Two: Activate. Build and deploy use cases, with a focus on highest value and feasibility to fund the journey, and prioritized scope to build momentum towards change in the organization.
- Step Three: Enable. Scale use cases across the network while building new capabilities in the client organization, using fit-for-purpose approaches such as Build-Operate-Transfer.
