The Digital Supply Chain Challenge

The Digital Supply Chain Challenge: Breaking Through

service department. Opportunities for differentiation have emerged in working deeply with external supply chain players to improve costs, satisfy end customers and make decisions in the interests of the entire chain. At a time when business-to-consumer (B2C) companies might conduct 20% of sales through digital channels, the supply chain is now a key player in the definition of the go-to-market model. The impacts of these evolutions are still playing out. Supply chain managers have risen in prominence in many industries and now have an opportunity to influence strategic decisions in novel ways. Companies are striving to rethink their organizations to enable end-to-end planning governance while maintaining sufficient local proximity to enact effective sales and operations planning (S&OP) models. Customer collaboration is now a prominent supply chain competence as companies realize that the most significant cost-to-serve improvements will come from working with downstream channel partners. And, of course, the eternal supply chain preoccupations of working capital, cost and service remain, while other managers expect that these should become easier because of the fundamental changes taking place in the supply chain. In the midst of this evolution come two more. The first is the emergence of the e-commerce retail channel and its progression into omnichannel. The continued growth of e-commerce and its impacts on traditional brick-and-mortar retail are well known. Although this growth has been quick, the idea that consumers can interact with retailers and brands through multiple devices, order products through these devices, choose from multiple delivery options and expect a seamless experience throughout is now coming to the fore even more rapidly. From a supply chain digitalization (SCD) perspective, this is putting pressure on traditional supply chains to improve their master data management, develop new data models for a customer base that is no longer “far removed,” and manage a new magnitude of orders and product availability complexities. In the space of a few years, supply chains have been asked to transform from picking and shipping to a downstream client to being agile, last-touch ambassadors for their brand to the final customer and an engine for providing rich, valuable data that will drive future product offerings and promotions. The final evolution is the growth of a web of technological innovations grouped together under the moniker Industry 4.0. The term “Industry 4.0” really entered the supply chain sphere in 2013. It springs from the idea that supply chain in the broadest sense (one that includes planning, distribution, manufacturing, sourcing and customer collaboration) is undergoing its fourth major reimagining in history. The first industrial revolution is the one taught in history books – the

2