What is Digital Supply Chain Management ?

Last time we saw what is a digital supply chain, now we focus on who is supposed to manage it.

What is digital supply chain management? According to Johnson “it can either refer to managing the digital aspects of a physical supply chain, or managing the supply chain of digital products.” (1)

 

In the first case the team responsible for digital supply chain management is the same as the team responsible for any supply chain functions (which could be sales, manufacturing, logistics, etc.); and also with the same main goals as improving efficiency and increasing margins. But with an added layer of digital technologies as for example predictive analytics, robotics, IoT, etc.

 

In the second case, digital supply chain management includes also the technology companies involved in the delivery of any digital product. For example, the digital supply chain of an e-commerce website includes the website’s developers, its administrators, the cloud services company that hosts the website’s data, the CMS provider, the devices that consumers use to access the website and every third-party technology provider whose code provides functionality to the website (e-commerce plugins, personalized recommendation engines, advanced analytics services, inventory tracking solutions, custom product builder, chatbots, etc) .

 

The definition proposed above provides a first idea of ​​the concept of Digital Supply Chain Management (DSCM) but it is rather summary and simplistic. Actually, according to P.Farahani et al. (2), developing a mature DSCM level also requires an organizational change process that reaches every corner of the internal and external supply network, and Supply Chain Managers have to find answers on the question on how to make use of new technological innovations and how to bring them on a cohesive agenda and roadmap.

 

Robinson (3) suggests a 5 steps model for those companies who wish to achieve a truly successful transformation of the existing supply chain into a digital one: 

  1. Understand the starting position and the risk involved, in particular assess the maturity of the suppliers and the overall risk posed
  2. Define the strategy and be open from the outset
  3. Have a sustainable, long-term approach by taking proactive steps to ensure system stability over time and in varying business and financial conditions. 
  4. Proper research and analysis defining expectations and mutual obligations
  5. Segmented rollout and capability development: after the digital supply chain management system has been formulated it should be brought into action in phases, starting from the set up of a pilot project. After a successful pilot, the rollout should start with those supply chain where expected returns are the highest 

 

 

(1) Johnson K., What is digital supply chain management?, BitSight, January 29, 2019

(2) Poorya Farahani, Christoph Meier, and J€org Wilke, Digital Supply Chain Management Agenda for the Automotive Supplier Industry, in book: Shaping the Digital Enterprise Trends and Use Cases in Digital Innovation and Transformation (pp.157-172), january, 2017

(3) Adam Robinson, The 5 Steps Towards Digital Supply Chain Management, Cerasis, 2017

;

Complete the form to download files