The Supply Chain Matters blog continues its series of unveiling 2019 Predictions for Industry and Global Supply Chains. In this Part Six posting, we highlight our carry-over prediction related to various multi-industry supply chain transitions toward Digitally-Enabled Response Networks.
On an annual basis, the Ferrari Consulting and Research Group provides a series of supply chain management focused predictions for the coming year. These predictions are provided to our clients and readers of this Supply Chain Matters blog in the spirit of advising line-of-business, multi-industry cross-functional supply chain management and supporting IT teams a sensing of meaningful initiatives, programs or capabilities we feel will be of importance. The predictions further serve as our continued research and client advisory agenda in the coming year.
The context of these predictions includes a broad cross-functional umbrella of what today is supply chain management, and includes areas of supply chain leadership and strategy, product management, strategic sourcing and procurement, planning and execution, manufacturing, transportation and logistics, online fulfillment.
We initiated this series in a blog that summarized themes and insights included in all ten of our predictions.
Part One of the series highlighted what industry and global supply chain management teams should expect from a global economic outlook perspective.
Part Three of the series addressed unprecedented levels of global supply network challenges that can be expected in the coming year.
Part Four highlighted a continuing prediction that the threat of cyber-attacks involving supply chain management processes are inevitable.
Part Five addressed areas of supply chain management digital transformation and the need for strategic and tactical business cases.
2019 Prediction Six: The Multi-Year Transition Toward Digitally-Enabled Response Networks Continues.
After describing the capability of Digitally Enabled Response Networks as a multi-year transformational effort in process, talent and advanced technology capabilities, we predict that such efforts will continue into 2019 with far broader efforts.
A Digitally Enabled Response Network requires the build out of end-to-end network visibility and synchronized decision-making capabilities. It can be viewed as a foundation for supply chain management digital transformation for enterprises with direct to consumer customer fulfillment business models or services businesses that cater to multiple customer service channel needs. It implies perspective and capability that moves beyond “chain” to that of dynamic network ecosystems linking available supply to dynamic and changing customer demand needs. That implies extension of planning and fulfillment processes externally, involving key customers, suppliers and services providers in a federation of highly connected and integrated supply and product demand response networks. In many cases it requires Cloud based B2B connectivity linking various networks.
Response networks will embrace new forms of advanced analytics and decision-making, augmented intelligence and response to customer and supplier needs. They are an extension of a digital maturity path that involves supply and demand networks, process automation, peer-to-peer collaboration and synchronized joint decision-making.
With much uncertainty circling industry supply chains in the coming year, we anticipate continued attention and investment in this area.
In 2018, we added what we clearly stated was a multi-year perspective prediction, one that would require assessment and longer-term planning across multiple industry supply chain and related services providers. Competing in the new retail economy requires closing the gaps between sales, marketing, supplier, and supply chain teams in responding to actual B2B and B2C required customer experiences and expected service levels. How such experiences are supported, managed, and synchronized leads to what we have termed Digitally Enabled Response Networks.
The status quo of traditional retail supply chain customer fulfillment is no longer an option for industry competitiveness or revenue growth. Today, many retailers and services providers are hamstrung with marginal product demand forecasting, limited planning and multi-channel inventory management capabilities required in an Omni-Channel fulfillment process. They need to raise the bar on anticipating customer needs with the most-timely response to such needs.
Depending on the current state, building out the various process, people and advanced technology stepping stones will require a phased approach with a consistent end goal in mind. An important and crucial step is the deployment of a singular planning, execution and collective decision-making process that can integrate the extended fulfillment network and is supported by today’s more advanced technologies and capabilities.
It is no longer just a supply chain capability but rather a digitally enabled response network that leverages multiple processes leveraging advanced technologies to connect the digital with the physical assets of the response network. We described the capability as the integration and synchronization of:
- Individual and collective product and services focused supply chains into a singular response network or network of networks.
- Linking physical and digital capabilities.
- Leveraging of IoT, Manufacturing 4.0, Blockchain, Predictive-Cognitive and Artificial Intelligence-based decision-making technologies to manage network synchronization, risks, and unplanned exceptions.
In 2018 we published three supplemental research advisory reports that profiled the early stage foundational buildout of Digitally Enabled Response Network capabilities in various industry settings that included retail and online telecommunication devices, online home good retailing, automated coffee beverage demand sensing and replenishment and more responsive human blood supply inventory stocking. We viewed these use cases as meaningful examples of how leading-edge companies are embracing this capability.
We found ample evidence that early successes have convinced firms that they are on the right path towards overall supply and demand network digital transformation. They bring foundational elements of more responsive planning and execution processes.
More detailed information can be garnered by accessing the following complimentary research reports available in our Research Center for downloading:
Orchestrating Digitally Enabled Response Capabilities in Retail Customer Fulfillment, June 2018
Orchestrating Digitally Enabled Response Network Capabilities in Other Multi-Industry Settings- Case Study Examples, June 2018
This concludes our highlights of Part Six of our 2019 Predictions for Industry and Global Supply Chains.
In the next posting in this series, we highlight our seventh prediction, addressing our belief of the expected business prioritization attached for various supply chain management focused advanced technology areas in the coming year.
In the meantime, if your organization requires assistance in preparing for challenges in the upcoming year, please get in contact with us for added information on any of these predictions.
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