Submitted on Mon, 2015-09-21
By Jim Laverty

Digital business enables organizations to be flexible and innovative in an extremely competitive, unpredictable and multichannel market

86% of businesses claim they will be digital over the next 5 years. The revolutionary shift to digital business was the overarching message from the Gartner Supply Chain Executive Conference, and for good reason; Gartner predicts it will transform business as we know it.  

Digital business is defined by Gartner as the creation of new business designs by blurring the digital and physical worlds.  For supply chains, investment in change must happen at a fundamental level, it must happen now, and it must be able to adapt to future technology and changes.  

 

“The focus is on how the supply chain can consume and leverage data, integrate sensors and other elements of the Internet of Things (IoT) and software for customer segmentation and marketing automation. This is a linear evolution of the investments under way in many supply chain organizations.”

“These and other technologies, such as smart machines which will automate decision making, are the new technology building blocks of the future digital business. Falling behind in these developing technologies could have serious implications for enterprises,”
- Peter Sondergaard, Global Head of Research, Gartner

 

Digital business extends beyond simply furthering automation in the supply chain; it enables organizations to be flexible and innovative in an extremely competitive, unpredictable and multichannel market.  Gartner Managing VP Mike Uskert shed light on what supply chains are up against during the Supply Chain Executive Conference.
 

“A sample of current innovation drivers include the growing expectation of instantaneous service, increasing government regulation, an exponential proliferation of data, multichannel expectations, and the ever growing talent gap. Because of these drivers we are witnessing innovation advances in the areas of same-day delivery, real-time visibility across value chains, predictive analytics, automation, self-guided/driven vehicles, 3D printing, green supply chains, and fully integrated forms of commerce.”


Gartner predicts that by 2018, 50 percent of chief supply chain officers in companies with revenues over $1 billion will design and manage supply chains that support digital business. With connected devices, the supply chain will have visibility into never-before details of its customers, products, location, and assets.  The benefits are vast but are realized as a result of an investment in modernizing and redefining processes throughout the entire organization. As business catapults toward digital dominance, what should supply chains keep in mind?

The Flexibility Factor

Supply chains as static networks are ineffective within the rapid pace of business and the difference between staying competitive and falling behind lies in one vital trait of digitization: flexibility. The transformation to digitization means a greater ability to adapt, allowing the technology to evolve with the business, particularly in an omnichannel buying environment.

It’s All About the Strategy

Making a technology investment today requires careful, thoughtful consideration because the determined platform will have an effect on the entire supply chain. Now more than ever, companies must make changes at the fundamental level and focus building the most flexible technology architecture - and platform - of their future. From a strategic perspective, supply chains need to predict what will change and invest in technology to address it.  

Ready or Not, It’s Coming

Supply chains cannot postpone digitizing their business anymore. Gartner reported that cloud-based SCM software sales outpaced traditional on-premise solutions with a 17% growth in 2014. To not only survive but be a valuable partner, supply chain companies must realize the inefficiencies of custom coding and open themselves up to future innovation in the digital supply chain. This also means embracing The Internet of Things, which allows companies to realize new opportunities to create solutions and deliver products and services in a unique way - one that combines the physical and digital.

 

Despite the vast migration to digitization, overall adoption to cloud warehouse management systems (WMS) continues to lag. A recent survey conducted by DC Velocity showed only 8 percent of respondents deployed their WMS in the cloud. While well-designed on-premise technology can still hold value for supply chains as part of a short-term strategy, it is no longer part of an effective sustainable solution. The new normal is digitization and by connecting people, businesses, and things, supply chain companies that determine their strategy and act sooner than later will maintain a competitive advantage.

When it comes to the technology that’s running your business today, what’s your strategy?  Are you ready for the digital transformation?

 

 

Blog Type: 
IRMS WM Blog
Innovative Technology Solutions