Unlocking the Benefits of Digital Supply Networks
Digital supply networks promise change but the processes to implement them simply aren't there yet
“Digital” has become one of the biggest buzzwords in the transportation and logistics industry. Everything, it seems, is going through a digital revolution. Procurement services and digital platforms are being created, revised, and improved at a pace that the industry is completely unaccustomed to. Other parts of the industry are turning to automation to expedite the process of manufacturing, selection, fulfillment, and shipping.
While we’re completely onboard with this new digital era, it might be worth it to take a moment and consider whether or not it will live up to the hype.
“New research which was conducted by Deloitte and the Manufacturers Alliance for Productivity and Innovation (MAPI) indicates that while U.S. shippers are increasingly aware of the benefits of digital supply networks (DSNs), many “remain in the early phases” of adoption,” according to Patrick Burnson, Executive Editor for Supply Chain Management Review.
The Industry’s Caution
The study, “Embracing a digital future: How manufacturers can unlock the transformative benefits of digital supply networks,” shows that there is a wide difference between the practice and the opinion when it comes to digital supply networks.
In spite of the nuance and the hype that surround DSNs and other platforms, there are those in the industry that aren’t surprised by the findings.
Transportation economist, Noël Perry, told Supply Chain Management Review that he was not surprised by the findings.
“Supply chain managers are taking a cautious approach to digitization,” he says. “And for the time being, that may be a good idea. They should not be spending too much on new technology at this point, but should be poised to adapt when the time is right…which should come soon,” says Noël Perry, a transportation economist, in an interview for Supply Chain Management Review.
Perry advises managers to keep themselves informed of the changes in the industry as well as in emerging technology by attending trade events and transportation conferences where many new projects and start-ups get their grand unveiling.
The Survey by the Numbers
The survey was conducted of over 200 manufacturing organizations, of which over half, 51 percent, said they believe their DSN maturity level to be “above average” when compared to their competitors. However, of those respondents, only 28 percent has started to implement DSN solutions within their organization.
As for the uses of a DSN solution, one of the biggest goals among the respondents is transparency as it is one of the most critical keys to boosting overall efficiency. In order for end-to-end transparency to occur within a supply chain, there needs to be a total connection of the data, from start to finish. According to the survey, only 6 percent of the respondents have such accessibility to data in place.
“While enthusiasm is high and manufacturers realize the benefits of Digital Supply Networks, many companies struggle to identify the right technology landscape which will provide the most value when they are approaching a digital shift, said Stephen Laaper, principal, Deloitte Consulting LLP and co-author of the study. “As a result, many hold off with key aspects of their transformation, which in turn puts their transformation at too slow a place to avoid disruption.”
Choose Wisely but Make a Choice
With that being said, the transportation and logistics industries are ripe for change. Some would even say they are long overdue.
As with any new technology, especially such that has such a radical ability to initiate change, it makes industry executives nervous. This is understandable when we consider just how many different services, platforms, and software suits are out there, and more are being released in short order. With that being said, the transportation and logistics industries are ripe for change. Some would even say they are long overdue. Now that change is here, it will be up to individual companies to decide the best course of action to embrace these new changes and apply them in the most beneficial way to their own operations.
It seems the general consensus on the matter is this. Yes, being cautious is a good thing, but there is such a thing as being too cautious. Dragging heels on matters of DSN and other digital solutions might end up costing even more time and money in the future, especially if the competition already has their system figured out.