Just when I thought my favorite social media network, Twitter, didn’t know me at all, I was fed a sponsored tweet from Accenture Strategy, informing me about the new paradigm in Supply Chain Management: The Digital Supply Network. So, Accenture Strategy, if you are reading, your sponsored tweets appear to be working!
Simply put, a paradigm is the way we do something. A paradigm shift is a fancy way of saying “things are changing,” or with a more comical overtone “shift happens.” With regard to manufacturing and supply chain processes, a paradigm shift comes about when a new technology is introduced that significantly changes the production process of a good.
To say things are changing in the way supply chains are managed is an understatement. Just a brief scan of the supply chain hashtag on twitter (#supplychain) yields an astounding amount of information regarding all the changes happening in the supply chain management environment: 3D-printing, the internet of things, management of big data, sustainable and responsible sourcing, and the list goes on.
Accenture Strategy offers an intriguing analysis on the digitization of supply chain networks and provides readers with examples of how traditional supply chains can be re-imagined as digital supply networks.
One main aspect of the paper focuses on how digitization can help integrate various supply chain elements that otherwise, traditionally speaking, would be exclusively considered. An interesting matrix displaying the main discussion points can be formed:
What really stood out in the report is the emphasis placed on taking a holistic approach to creating a digital supply network. The authors even argue that a patch-work approach could prove counterproductive. At the end of the paper, a specific digital supply network scenario is presented, providing readers with an overview of how this digitized network could work.
The full report can be downloaded here.
Challenges
There is no question that the time to adopt digital technologies into supply chain processes is now, including social media, mobile communication, advanced analytics and cloud-computing. Some could even argue that the time was yesterday. The advantages of digital integration are all well-known and include enhanced visibility, real-time management and increased flexibility, just to name a few. Envisioning, planning and executing a digitized supply network must however take the soft-side of change into consideration. Some form of the word “change” appears in the seven-page paper approximately 13 times. Let’s face it: many people do not like change.
How, for example, will a relatively successful demand planning team react to the introduction of an advanced analytics demand planning tool, when in the past, they have relied on “gut feeling” and experience? How will an IT department react to the proposal of managing important supply chain processes in the cloud amongst all the cyber security concerns that have hit the headlines in recent weeks?
The holistic shift from traditional supply chain practices to a digitized approach in any organization will require strong leadership, an influential group of stakeholders and excellent strategic planning and execution. Without this “soft-side” of change, companies will continue to only scratch the surface of the digital supply chain paradigm.
What do you think about the new supply chain paradigm proposed by Accenture Strategy? Has your company integrated any of the above-mentioned digital technologies into its supply chain processes?
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