Home' MHD Supply Chain Solutions : MHD Mar-Apl 2015 Contents partners developing a digital system together.
Supply chain design, cost-to-serve and digital
demand management are all important factors
to the launch and life cycle management of
digital products and services.
In light of this expected digital business
spending, it is imperative that CSCO evaluate their
supply chain process improvement priorities. As
a corporate vision unfolds for digital business, the
supply chain needs to define its own shorter-term
strategy that aligns activities, resources and
metrics toward that longer-term goal. Connecting
supply chain priorities to corporate vision is a
challenge that becomes even more daunting with
digital business on the horizon.
Prepare for the supply chain implications of
digital business investments occurring outside of
the traditional supply chain to avoid becoming
a barrier to its success. Further investments in
customer service management, for example,
will have a two-fold impact on the supply
chain. Not only will it offer the supply chain
unprecedented information about the unique
customer segments that can be used to improve
overall performance, it will also mean that the
supply chain will be expected to be more agile
than ever before, as the company offers highly
differentiated services across its customer base.
Technology investments with
potential to disrupt supply chains
In many cases, technology investments are
being prioritised across the business that have
a potential to disrupt the supply chain if all
technology road maps are not aligned.
To support the digital business, companies
expect to make significant technology
investments in areas ranging from customer
segmentation to product pricing. Some of these
investments are supply chain-specific, such as
supply chain design and business analytics.
Other priority investments, including customer
segmentation, digital and physical product
design and marketing automation, will impact
the supply chain as well, even though they may
be seen as investments outside of the supply
chain organisation's control.
When properly aligned, these investments
will enhance supply chain performance through
improved visibility and decision support. But
they also present a challenge if deployed
in a silo without recognition of the supply
chain impact. These broader digital business
technology investments will increase supply
chain complexity as marketing promotion cycles
increase, digital products are launched faster
and highly differentiated customer service is
delivered with an expectation for equal or better
efficiency and responsiveness.
This makes it critically important for the CSCO
to seek an active role in business-wide technology
strategies and investment decisions, to ensure the
alignment of the supply chain technology road
map with business goals and requirements. The
CSCO of the past, who was mostly concerned with
ERP implementations and master data manage-
ment, is now focused on how the supply chain
can consume and leverage a deluge of data to
support new digital business models.
There’s no doubt that as digital business
becomes a reality for organisations, strategic
plans will be at risk without taking supply chain
variables into consideration. It is supply chain
participation that will ensure the end-to-end
costs, risks and opportunities of the physical
and digital worlds are factored in.
Mike Burkett is a research vice president
and chief of research for the Gartner supply
chain team, drawing on more than 15 years
of manufacturing experience introducing and
supporting products from concept to end-of-
life. He conducts research on the extended
value chain issues impacting industrial
discrete manufacturing companies. For more
information visit www.gartner.com.
MHD SUPPLY CHAIN SOLUTIONS — MARCH / APRIL 2015
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