Digital supply chain improvements could reduce process costs by half
Digital supply chain improvements could reduce process costs by half
The adoption of and enhancements made to digital supply chains could dramatically reduce costs, according to a report by The Centre for Global Enterprise (CGE).
The report, entitled Digital Supply Chains: A Frontside Flip, claims that businesses can lower procurement expenses for every purchase of goods and services by 20 per cent, slash costs within the supply chain process by 50 per cent and increase overall revenue by ten per cent.
The CGE report suggests that the adoption of digital supply chains requires what it describes as a “frontside flip” -- flipping the focus to the frontside (i.e. the customer-facing side) of the business.
While technology has been used within supply chains for decades now, the report’s authors argue that a clear definition of a digital supply chain (DSC) is needed.
They define a DSC as follows: “A digital supply chain (DSC) is a customer-centric platform model that captures and maximises utilisation of real-time data coming from a variety of sources. It enables demand stimulation, matching, sensing and management to optimise performance and minimise risk.”
The report highlights an innovation used by tyre manufacturer Goodyear. Previously, Goodyear sold its tyres through distributors but was then left out of the loop. Now, it is trying a solution that allows customers to engage directly with the company via the Goodyear website. Customers can select their tyres, appointment time and local installer, then complete their purchases online. Goodyear is then able to check its inventory and deliver the correct tyres to the chosen installer by the next day.
The company is also conducting projects using “real-time search trends, website analytics, big data and point-of-sale information” in order to gain insights into demand and meet the needs of their customers.
The report predicts that an “evolution of manufacturing and delivery technologies,” including 3D printing, robotics, driverless vehicles and drones will impact DSCs by 2020.
