Unlocking the Potential of Digital Supply Chains: Lessons Learned in 2023

Over the course of 2023, we spoke with hundreds of procurement and supply chain professionals about their current status and plans for digitizing their supply chain management.

We inquired about their current situation and their future intentions, as well as the obstacles they were encountering.

The consensus was that, due to continued disruptions in global supply chains, digitization was viewed as crucial for increasing resilience and control in their supply chains.

Almost all experts indicated that they were still struggling with a high manual workload and expressed a desire to automate more processes.

However, they found it easier to increase digitization of internal processes than to enhance digital collaboration and communication with their supply chain partners.

The reasons provided were:

• Difficulty managing different levels of maturity: Most companies work with partners of varying sizes in different locations. Some partners are highly advanced and mature in their digital capabilities, while others are lagging behind and can only exchange information and communicate via email.
• Lack of a general data standard: Nearly every partner uses their own proprietary data format. The experts we interviewed found it challenging to work with these different formats and to reach a consensus on a common format. They anticipate extensive project management efforts to digitize communication with their partners.
• Concerns about effort and push-back: Communication and collaboration with supply chain partners are perceived as extensive projects, and there is an expectation of push-back from partners unwilling to change or adopt new platforms or data exchange formats.

If it's so challenging, how have successful companies accomplished it and why did they do it?

Many companies have taken the initiative because they believe the benefits outweigh the risks and costs.

Visibility, Transparency, and Control in Supply Chain Management

Due to disruptions in global supply chains and resulting actions such as near-shoring, supplier diversification, and inventory optimizations, companies realize the need for a platform to manage these tasks and automate as many as possible. Only with a digital supply chain management platform can these companies achieve end-to-end real-time visibility at the SKU level necessary to effectively manage their supply chain.

Implementation Strategy

Meet your partners where they are: Instead of attempting to change partners' workflows, many companies chose to adapt to receive information as they always have and find ways to process it automatically.

Business Benefits

By applying this strategy to quickly onboard partners, companies can reap many rewards:

• 100% Digital Communication: Once everything is digital, the generated data becomes an additional asset that can be better analyzed to support supply chain function improvement and performance tracking.
• Better Inventory Management: Digital collaboration can extend beyond the mere exchange of documents like purchase orders and invoices. Buyers and suppliers can exchange information on stock levels, helping to reduce safety stock levels across the supply chain and free up cash.
• Process Efficiencies: By implementing a digital supply chain management platform, companies can reduce related costs by over 80%.
• Productivity Increase: Supply chain talent is scarce these days. With a digital platform and automated workflows, supply chain teams can accomplish more with fewer resources.

FAQ: Digitizing Your Supply Chain Management

1. Why is digitizing the supply chain management important?

‍Digitizing supply chain management is crucial for increasing resilience, transparency, and control in today's global business landscape. With disruptions becoming more frequent, digital solutions offer real-time visibility, automation, and collaboration tools to navigate challenges effectively.

2. What are the main obstacles companies face when digitizing their supply chain?

‍Companies often encounter challenges such as varying levels of digital maturity among partners, lack of standardized data formats, and resistance to change. Managing different partner capabilities, agreeing on data standards, and overcoming push-back from stakeholders can pose significant hurdles.

3. How do successful companies approach supply chain digitization?

‍Successful companies adopt a pragmatic approach, meeting partners where they are and focusing on fast onboarding rather than trying to enforce changes. They prioritize end-to-end visibility, transparency, and control while leveraging digital platforms to streamline processes and enhance collaboration.

4. What are the business benefits of digitizing the supply chain?

‍Digitizing the supply chain yields numerous benefits, including 100% digital communication, improved inventory management, process efficiencies, and increased productivity. Companies can analyze data more effectively, optimize inventory levels, and reduce operational costs, ultimately enhancing overall supply chain performance.

5. How long does it take to implement a digital supply chain management platform?

‍The implementation timeline varies depending on the complexity of the organization and its supply chain ecosystem. However, many companies can achieve initial results within a few weeks to a few months. Platforms like limbiq offer quick onboarding processes, enabling companies to start realizing benefits sooner.

6. What role does data play in digital supply chain management?

‍Data is central to digital supply chain management, serving as the foundation for visibility, analytics, and decision-making. By digitizing processes and capturing data at every touchpoint, companies can gain insights into their operations, identify trends, and drive continuous improvement initiatives.

7. How does digital collaboration benefit supply chain management?

‍Digital collaboration facilitates seamless communication and information exchange among supply chain partners. It enables real-time sharing of data, documents, and insights, improving coordination, responsiveness, and decision-making across the supply chain network.

8. What are some key considerations for selecting a digital supply chain management platform?

‍When choosing a digital supply chain management platform, companies should consider factors such as scalability, flexibility, ease of integration, user experience, and support for industry-specific requirements. It's essential to select a platform that aligns with the organization's goals and can adapt to evolving business needs.

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