The Digital Supply Chain Challenge

INTRODUCTION

THEMES The book is structured around four broad themes that strive to cover the whole of SCD transformation from a management perspective. Separating hype from reality In exploring the first theme, we share some views on the phenomenon of SCD in an attempt to keep things in perspective and avoid getting caught up in the overexuberance. There is a useful benchmark on the progress, or lack thereof, of Industry 4.0 and SCD transformation, plus a valuable framework for embarking on such a strategy. We examine the profitability challenges in the online grocery business as a reminder that exciting trends do not always yield business models with margins. There is also a look back at radio frequency identification (RFID), which at one time generated excitement as a revolutionary technology, similar to the enthusiasm for blockchain today. And we also provide a counterpoint to the buzz around AI as a breakthrough for demand planning. Proof beyond the promise The second theme looks for concrete wins brought by Industry 4.0 and SCD to help demonstrate where tangible value is to be had. We explore predictive maintenance, an Industry 4.0 application that might quietly serve as the pioneer for subsequent technologies. AI, too, has a role in SCD but in this respect it seems that “small is beautiful.” We also look at how personalization is integrating supply chain and new value propositions and might surprisingly help reverse a decades-long trend of production concentration. Moving downstream, we explore how food waste can be tackled using digital supply chain tools. And although online grocery has profitability challenges, a comparison of digitally native online players like Ocado and traditionally offline retailers like Tesco will help illustrate how SCD is becoming an essential element of business strategy. Successful execution of the basics It would be a mistake to look at SCD as an opportunity to leapfrog the basic fundamentals of supply chain management. The evolutions that are shaping supply chain management do not mean that doing ABC analysis or understanding the right way to measure service no longer matter. They mean that these basics are prerequisites that are even more important today. “Simplify, standardize, digitize” supply chain processes has never been truer. This theme also looks at the changing definition of supply chain’s core competency in fulfillment, and some novel insights into S&OP governance that must precede any investment in tools like supply chain control towers.

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