Increased revenues and decreased costs
Digital supply chain excellence in turbulent times
Customer behaviours and expectations are changing dramatically, challenging the established supply chain and operations setups of leading industrial companies. Supply chains are increasingly facing major disruptions, with the impact of COVID-19 at the top of the list. And digital technologies are affecting every aspect of how companies run their businesses. To succeed in this evolving marketplace, companies need to transform linear supply chains into autonomous supply chain ecosystems.
"Developing advanced supply chain capabilities makes strong economic sense and gives companies the agility needed to respond to disruptions"
Investments into supply chain excellence pay off
In our recent research, we surveyed more than 1,600 supply chain executives to identify those companies that are ahead of the curve on supply chain excellence. We call them "Digital Supply Chain Champions" - and they are proving that investments pay off in:
Following a similar methodology to that used in our Global Digital Operations Study 2018, we developed an index that ranks companies by supply chain maturity. Based on their scores, we grouped the companies into one of four categories: Digital Champions, Digital Innovators, Digital Followers and Digital Novices. These terms refer specifically to the interviewed companies' level of supply chain maturity.
To measure where particular companies fit in these groupings, we allocated a total of 100 points to different levels of digital capabilities and advances - a maximum of 25 points for the implementation of advanced supply chain capabilities, 10 points for the use of AI to accelerate these supply chain capabilities, 25 points for the implementation of software-based supply chain technologies, 15 points for overall performance impacts, and 25 points for demonstrated revenue (10) and cost (15) impacts. The index is cumulative, so the more integrated a business and the more broadly it implements advanced supply chain capabilities, the higher the index value.
1.8 years payback period for investments into advanced supply chain capabilities
More reliable delivery
Reduced inventories
Benefits beyond the numbers
Digital Champions 2025
Duration: 00:02:33
Digital
Champions
2025
Successful in E2E connected and autonomous supply chain ecosystems
The vision
Tomorrow's supply chains will be connected and self-orchestrated ecosystems: More than 80% of Digital Champions describe their supply chain focus as external integration or end-to-end orchestration.
The benefits
Investments into supply chain excellence pay off: Digital Champions achieved savings of 6.8% annually in supply chain costs, along with a 7.7% revenue increase.
Supply chain transparency and sustainability
Supply chain transparency sets the stage and is a catalyst for greater sustainability: More than 50% of Digital Champions say that supply chain transparency is a high or top priority.
Closed loop and integrated planning
Next-level planning is synchronised real-time with execution, integrates supply chain partners and enables continuous optimisation: 72% of Digital Champions have implemented end-to-end supply chain planning; they are also taking the next step towards closed-loop planning.
Smart logistics flows
Smart logistics is the key savings driver and a growth lever in the connected supply chain ecosystem: Digital Champions rate smart logistics as their top supply chain priority. Smart logistics accounts for more than 50% of overall supply chain cost savings.
Dynamic supply chain segmentation
Dynamic supply chain segmentation enhances customer centricity and continuously balances service levels, costs and margins: 73% of Digital Champions have already implemented segmentation and report a strong positive impact on their business.
AI-driven supply chain management
Artificial intelligence is accelerating supply chain improvements and will become the new norm: Digital Champions have clearly identified the areas where AI brings value and use AI two to three times more extensively than Digital Novices.
Operating model development
Mastering tomorrow's supply chain challenges through the next-level supply chain organisation and capabilities: To excel in a constantly changing environment, companies need to develop a flexible organisation with a digitally empowered and upskilled workforce.
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How can companies make the organisational changes needed to master the diverse challenges they are facing as they manage their supply chains?
For many companies market environments are becoming ever-more challenging. To cope with constant change, companies will need to make sure that their organisation is able to continuously evolve and improve. They’ll need a culture of continuous innovation and cross-functional collaboration to get there - always keeping the end-to-end value chain in mind. Generally that means beginning with the needs of the end customer, but also taking into account everything from factories, to warehouses, to backend technologies. We believe that some key principles can help companies on this journey.
How should companies set up supply chain teams and communities?
Set up cross-functional teams, communities and supply chain centres of excellence to drive advanced capabilities by applying continuous development and deployment approaches.
What should companies do to make sure employees have the right skills?
Establish a self-learning and continuously improving organisation through attracting digital talent and digital upskilling of the supply chain workforce
What’s most important when it comes to IT?
Establish a state-of-the-art technology backbone and embed advanced analytics and IT into supply chain to enable business-led transformations by bringing business, processes, IT and advanced analytics together.
Who should be involved?
Establish new collaboration models with an extended partner ecosystem to drive innovation in the supply chain.
Supply chain excellence in turbulent times webcast
21st April 2020
To take a closer look at how supply chains are transforming in this evolving marketplace, we surveyed 1,601 supply chain executives across the globe and investigated what capabilities allow companies to stabilise their supply chains and stand out as supply chain champions.
We shared those insights in a webinar to launch our global study “Connected and autonomous supply chain ecosystems 2025
Listen to the recording to hear from leading companies that joined the webinar and share their insights into innovative supply chain solutions.
Contact us
Consumer and Industrial Products Leader, South East Asia Consulting, PwC Singapore
Tel: +65 8223 1503
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