Executive Briefings

Challenges of the Digital Supply Chain

The term "digital supply chain" describes the integration of advanced technology, big data, and analytics to better manage and execute the physical supply chain, says Frederick Hartung of Jabil. He explains how this is playing out today and what it means for the future.

The primary challenges to building the digital supply chain are, first, gathering all the information from many disparate sources and ensuring the accuracy of that information; and, second, developing a software architecture and platform that can use the information to manage and execute the supply chain, says Hartung, who is vice president of supply chain solutions and global logistics at Jabil.

“But don’t get trapped into thinking this is only an IT or software solution,” he says. “Fundamentally, it is a functional execution solution. So you need to marry business and supply-chain people with solutions people who can translate ideas into new software applications that leverage big data and analytics.”

Taking this approach to improve its internal supply chain, Jabil built an intelligent platform called “Jabil in Control,” Hartung says. “And we architected a solution that allows us to do things we could not have done just two years ago.”

One example of Jabil’s new execution capability is around supply chain risk. “By grabbing big data and applying statistical process control, we are able to understand when operations are on the verge of going out of tolerance,” says Hartung. “This allows us to identify risk and the probability of an adverse occurrence in the supply chain before it happens.”

Another element is the ability to harness and analyze unstructured data, especially from social media, and incorporate the results into supply chain decisions around planning and inventory, he says. “We have been able to identify comments that may indicate a change in demand or uptake and have incorporated that into our advanced planning process. This allows us to be much quicker in our reaction to changing demand and sometimes even be ahead of those changes.”

The solution has proved so effective, in fact, that Jabil turned it into a separate line of business. “We now actually sell our supply chain services to other companies,” says Hartung. “We previously focused on manufacturing for our customers, but we have translated this into a new business and new customer base.”

To view the video in its entirety, click here

The primary challenges to building the digital supply chain are, first, gathering all the information from many disparate sources and ensuring the accuracy of that information; and, second, developing a software architecture and platform that can use the information to manage and execute the supply chain, says Hartung, who is vice president of supply chain solutions and global logistics at Jabil.

“But don’t get trapped into thinking this is only an IT or software solution,” he says. “Fundamentally, it is a functional execution solution. So you need to marry business and supply-chain people with solutions people who can translate ideas into new software applications that leverage big data and analytics.”

Taking this approach to improve its internal supply chain, Jabil built an intelligent platform called “Jabil in Control,” Hartung says. “And we architected a solution that allows us to do things we could not have done just two years ago.”

One example of Jabil’s new execution capability is around supply chain risk. “By grabbing big data and applying statistical process control, we are able to understand when operations are on the verge of going out of tolerance,” says Hartung. “This allows us to identify risk and the probability of an adverse occurrence in the supply chain before it happens.”

Another element is the ability to harness and analyze unstructured data, especially from social media, and incorporate the results into supply chain decisions around planning and inventory, he says. “We have been able to identify comments that may indicate a change in demand or uptake and have incorporated that into our advanced planning process. This allows us to be much quicker in our reaction to changing demand and sometimes even be ahead of those changes.”

The solution has proved so effective, in fact, that Jabil turned it into a separate line of business. “We now actually sell our supply chain services to other companies,” says Hartung. “We previously focused on manufacturing for our customers, but we have translated this into a new business and new customer base.”

To view the video in its entirety, click here