Digitisation in the supply chain: can companies keep up?

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“It’s the creepiest thing that ever happened to me.”

That was from a tweet in February by someone describing how his voice-activated Amazon virtual assistant woke him one night by laughing uncontrollably for no apparent reason. And this was no isolated incident, others had similar experiences with their Amazon Echo – it was all over the media at the time.

The digital revolution definitely has an unsettling side to it. And it’s the cause of many sleepless nights for supply chain managers, too: The technologies are developing so rapidly that many companies can barely keep up with the pace of digital transformation trends in the supply chain.

If you’re looking for the right digitisation approach in your supply chain, you must have a clearly defined strategy in place, says Lisa Harrington, President of the LHarrington Group: “First, to assess the new technological opportunities for your business, and second, to find a way to best capitalise on the benefits and stay a step ahead of your competition.”

But the digital revolution follows a different set of rules than what companies are used to, making it challenging for many companies to adapt. A key aspect of successful digital transformation is the corporate culture. How does your company involve its people and what’s the level of trust? For real progress, all employees need to be empowered to develop and address new ideas, technologies, and concepts.

A strategic approach to digital transformation must also focus on the customer, the company’s objectives, and the added value it hopes to generate. It’s all about grasping the right opportunities and gradually integrating this knowledge into your processes – with an eye on the bottom line.

“Across the board, for every area of the logistical value chain, we already have high-quality, data-driven, smart solutions that offer transparency and efficiency”, affirms Joris D’Incà, a partner and logistics expert at consulting firm Oliver Wyman. “The era of traditional supply chains with their traditional players will soon come to an end.”

Businesses should familiarise themselves with the appropriate technologies and ensure the ongoing innovation of their products and services. This includes collaborations with the start-ups, the right investments, and short go-to-market cycles. Take the area of transport and logistics services, for example: Maersk founded Twill – its very own digital freight forwarder. DB Schenker’s digital freight portal Drive4Schenker relies on technology from US start-up uShip, in which DB Schenker is a shareholder. And Fiege is partnering with Munich-based start-up Magazino to develop perception-controlled picking robots.

SMEs are also forming partnerships and founding their own in-house start-ups.The tools, methods, and mindset of start-ups also offer valuable lessons for boosting innovation. Agile methodologies, lean start-up design thinking – the variety of tools is immense. What’s important is that businesses examine and experiment with the various methodologies to see what’s right for them.

But, as important as it is to have a digital transformation strategy in place to move in the right direction, it shouldn’t hold a company back either. After all, the traditional sequence of developing a strategy, generating product ideas, setting up projects, investing in technology, and ramping up production is no longer universally valid in the digital age.

That’s because the resulting product development cycle is much too slow to respond to rapidly changing customer needs. When it comes to digital transformation, companies need to just move forward and experiment – start projects, gain experience, take stock, and learn from it. Even when projects fail, the lessons learned are vital to ensuring that the next project fares better.

When it comes to all things digital, the call to “fail quickly and frequently” can be sage advice for more than just ambitious start-ups. Rapid technological developments actually forces all industries to respond with greater speed and flexibility to changing market conditions.

Darren Travers

Darren Travers is a Strategic Accounts Director at AEB, responsible for key accounts in the domestic and international markets.

http://www.aeb.com/uk

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