Digital Supply Chain Strategy: How to Counter Potential Disruptions in Today’s Digital Age

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In today’s digital age, organizations are faced with the changing nature of the demand curve and the element of uncertainty in the supply chain. For operations teams, the challenge and competitive advantage have become: How well do you respond and execute against ongoing uncertainty.

With the world being so unpredictable, chaos is now the new normal. Timetables and priorities have shifted. A supplier fails to deliver. Demands on supply chains are increasing exponentially. A few years ago, supply chain performance was all about batch quantities, timetables, and lead times. Today, millions of packages are shipped in a day, with many with just only a few items.

In the face of this upheaval, supply chains try to predict what will happen, then optimize performance against plan. Most often, those plans are not met. The path forward demands a bold leap in supply chain performance.

Business in the Midst of the Digital Age.

Chaos is the new normal. This is the central challenge companies have to contend with today. Demand on the Supply Chain is increasing exponentially whereas Supply Chain performance before used to be all about batch quantities, timetables, and lead times. Today, times have changed.

Business Transformation has become pertinent. Timetables and priorities have shifted and, in fact, suppliers are now finding themselves unable to deliver at the required time demanded by the market. Whereas before deliveries were in batch quantities, today millions of packages are shipped every day with many having just a few items. Customers are now encouraged to order multiple sizes and colors of the same items, choose what they like best and return the rest.

In this upheaval, Supply Chains must respond accordingly. There have been attempts to predict what will happen with performance being optimized against the plan. Companies are increasingly investing in Supply Chain capabilities. Yet, these have triggered nonproductive finger-pointing and disappointing results.

Something is missing. A Supply Chain Strategy, as part of Strategy Development, is now essential to be able to pursue a bold leap in Supply Chain performance.

The Digital Supply Chain Strategy

The Digital Supply Chain Strategy is the new approach to Supply Chain resilience. This is best undertaken using a 2-prong approach.

1.  Sense and Pivot. A Supply Chain Strategy, Sense and Pivot focuses on building adaptability of Supply Chains. When this is undertaken, it will allow organizations to create greater flexibility across the Supply Chains. New processes, governance, and ways of working will be developed that will leverage technological capabilities being advanced. Significantly, it will make planning, manufacturing, distribution, and logistics more adaptive toward demand volatility, customer expectations for personalization, and an increasingly unpredictable operation environment.
2. Digitize and Automate. Digitize and Automate is another Digital Supply Chain Strategy that is focused on building the capability of the Supply Chain to execute against the plan. When this is undertaken and effectively executed and implemented, organizations can expect a better informed, more frictionless, more cost-efficient, and capable Supply Chain. Further, it will enable organizations to undertake more informed Strategic Planning as more accurate forecasts are achieved.

The Digital Age calls for a new approach to Supply Chain Resilience.

The Importance of Supply Chain Resilience

Why is Supply Chain Resilience important today? In today’s digital age, companies can expect to encounter potential disruptions. These potential disruptions can effectively be addressed using the best strategy. Automation and smart software are effective tools for minimizing disruptions on business operations. Embracing digital advancements will provide organizations real-time data for a more reliable supply value chain. Definitely, there will be integration challenges. But the use of Digital Age Supply Chain Strategies will guide companies to counter these potential disruptions and challenges.

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Want to Achieve Excellence in Supply Chain Management (SCM)?

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Supply Chain Management (SCM) is the design, planning, execution, control, and monitoring of Supply Chain activities. It also captures the management of the flow of goods and services.

In February of 2020, COVID-19 disrupted—and in many cases halted—global Supply Chains, revealing just how fragile they have become. By April, many countries experienced declines of over 40% in domestic and international trade.

COVID-19 has likewise changed how Supply Chain Executives approach and think about SCM. In the pre-COVID-19 era of globalization, the objective was to be Lean and Cost-effective. In the post-COVID-19 world, companies must now focus on making their Supply Chains Resilient, Agile, and Smart. Additional trends include Digitization, Sustainability, and Manufacturing Reshoring.

Learn about our Supply Chain Management (SCM) Best Practice Frameworks here.