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Introducing the Digital Value Chain

Get ready for the digital value chain -- possibly, and at long last, the key to true end-to-end supply-chain integration, says Roddy Martin, partner with Accenture.

The “digital value chain” involves information that flows back from the marketplace, says Martin. It seeks to supplement the overly internalized focus that characterizes so many organizations today. Successful companies need to share information with multiple outside partners, including suppliers, contract manufacturers and retailers. The resulting chain of critical data “allows us to plan better in the business.”

It’s more than a matter of just tying together existing systems and data. “Just integrating data functionally takes us to a level of maturity around functional excellence,” says Martin. “It doesn’t give us a market-back translation of demand insights that we can translate into supply.”

The data has, in fact, long been available. What’s new is the use of sophisticated analytics to acquire new insights into supply and demand. New forms of social media allow suppliers to view how a particular product is performing in the marketplace weeks earlier than if they just been reading point-of-sale data.

A formal sales and operations planning process can help, but it has to range across disciplines and not be functionally fragmented. Used properly, it can help companies finally to achieve the goal of deep insight into sales patterns. But most have yet to achieve it.

“We’re just starting at the point of managing internal data, bringing in external data and feeding it across the S&OP process and [seeing] what a digital business looks like,” Martin says.

The era of big data demands more sophisticated analytics, and well as individuals with the skills to deploy them. An influx of young data scientists promises to have “a huge impact on the business,” says Martin.

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