How to succeed in digitalizing supply chains and satisfying your customers

Customer satisfaction requires maintaining and increasing high service levels. To do that, you need access to relevant supply chain data to measure, understand and improve. To get hold of relevant data, you have to be electronically connected to your business partners. A high level of connectivity opens up the possibilities of measuring and improving your processes in the supply chain. This is a hidden source of better supply chain performance and differentiation.

Supply chain digitalization should be a high-profile initiative within your company. Top leadership will play an integral role in the success of the supply chain digitalization, which is becoming an enterprise-wide transformation. At this level, the support from the very top, including the CEO, is invaluable.

Technology – Just One Part of the Equation

Usually, a lot of focus is spent on technology as the enabler of connecting supply chains. Long-term, technology will probably play an important role in creating speed of digitalization. However, a much faster path in current market situation, given current ERP system environment and other preconditions and challenges, should be built on the following critical success factors:

Source: PipeChain Group AB

Technology & Ability to Deliver

A scalable and flexible technical platform, enabling efficient and fast connection of trading partners is critical, of course. As is a connection to a network of trading partners, enabling economies of scale in roll-out. But working on the technological preconditions only, will not help you in reaching your goals. You need to have the right organizational skills and set-up to handle the connectivity projects and the processes they relate to. Ability to deliver comes in many shapes, e.g. methodology, experience from previous roll-outs, industry experience, domain expertise, enough resources and enough skilled resources, etc.

Power to Act & Management’s full Support

But this isn’t enough. You also need the power to change and the power to convince. This can be achieved in at least two obvious ways. Either you are driving the change together with other players as an industry standard initiative. We can see this kind of efforts in supply chain management today, and we have seen them in many other business areas where big changes have been achieved. The other possibility is to drive the change from a position as a supply chain gorilla, where change typically comes from the “gorilla’s” strategic goals.

Even if you have the technology in place, the organizational set-up and skills required and the power to change, you still need a fourth critical factor to succeed – Aspiration, or Top Management’s full Support. Top management needs to see the wider perspective of supply chain connectivity and the substantial value it will bring to the company and the supply chain/s it is an integrated part of.

Probability of Success & Satisfying your Customers

When all four of these critical factors are in place, the probability of success is very high. Eventually, the objectives of the digitalization of the supply chain can move from the nuts and bolts — connectivity, control and continuous improvements — to focus on the ultimate objective, which is satisfying the customer. PipeChain has extensive experience in digitalizing and building cohesive supply chains and providing IT solutions and support throughout the process.

For further information, please contact:

Hans Berggren
CEO, PipeChain Group AB
Tel: +46 46 32 90 05
hans.berggren@pipechain.com

 

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