Executive Briefings

Transforming the Supply Chain Into a Digital Supply Network

Analyst Insight: Today, every business is a digital business. That means that every supply chain needs to be a digital supply network that unites not just physical flows but also talent, information and finance. This new breed of supply chains is more connected, intelligent, scalable and rapid than ever before and has the potential to help companies reap billions of dollars in new revenue and savings. – Gary Hanifan, managing director, Accenture Strategy, Operations Strategy

Transforming the Supply Chain Into a Digital Supply Network

Four of our era's most disruptive technologies - social media, mobile communications, analytics and cloud computing - have set the stage for the emergence of the digital supply network. In fact, Accenture Strategy research reveals that the vast majority of supply-chain executives (85 percent) are already actively working to leverage these technologies and introduce new digital capabilities into their operations.

But while these executives realize adopting digital technologies can enable an advantage over traditional supply chains, not all seem to understand that there’s a big difference between a digitally “enhanced” supply chain and a wholly re-invented digital supply network. Many organizations are trying to construct new supply chains on old foundations: re-fitting, re-wiring and re-adapting instead of re-inventing. However, piecemeal digitization of the supply chain will not be enough. Re-imagining the supply chain as an integrated digital supply network — one that helps the company develop new synergies, relate more fully to customers, rapidly reach new markets and quickly build and scale new offerings — is essential to generating higher levels of value.

Organizations that are slow to undergo a complete digital transformation risk being overtaken by new, nimbler competitors. Their customers will demand digitally-driven experiences that are as unique as they are, and delivering them “on demand” and performed at hyper-speed will be critical to long-term survival.

We have observed that successful companies take a systematic process to transforming a traditional supply chain into a digital supply network:

First, you need a vision. Imagine the power of your future digital supply network. This vision will become the Holy Grail in driving the transformation. According to Accenture Strategy research, two in five companies feel digital technologies aren’t given high priority within the company. This reinforces the importance of aligning digital investments to the specific business outcomes you’re looking to realize with your network. Those outcomes should be determined by the new demands and services that your digital customers are looking for — not just today, but also in 10, 15, 20 years.

Then, a blueprint. By creating a digital blueprint based on specific business outcomes, you can identify all the people, process, technology and governance aspects of the transformation, including any strategic digital partners to engage on unique value initiatives. This analysis will reveal the way work actually gets done along interrelated value streams across the business.

Finally, the transformation. Once the blueprint is created, break down the tasks and technologies that need to be implemented across the organization to realize the digital supply network vision. Set milestones for the journey. Outline how the convergence of the talent, physical, information, and financial supply chains, into one network, will perform in the new interconnected ecosystem.

Taken together, these steps will identify individual changes that need to be made in order to establish a digital supply network.

The Outlook

Digital technology is here to stay. With the power to drive a convergence of supply chain elements, digital can help companies capture huge savings and a competitive advantage. There’s no one-size-fits-all solution for creating a digital supply network — but in 2017, we can expect to see many more companies taking on this transformation.

Four of our era's most disruptive technologies - social media, mobile communications, analytics and cloud computing - have set the stage for the emergence of the digital supply network. In fact, Accenture Strategy research reveals that the vast majority of supply-chain executives (85 percent) are already actively working to leverage these technologies and introduce new digital capabilities into their operations.

But while these executives realize adopting digital technologies can enable an advantage over traditional supply chains, not all seem to understand that there’s a big difference between a digitally “enhanced” supply chain and a wholly re-invented digital supply network. Many organizations are trying to construct new supply chains on old foundations: re-fitting, re-wiring and re-adapting instead of re-inventing. However, piecemeal digitization of the supply chain will not be enough. Re-imagining the supply chain as an integrated digital supply network — one that helps the company develop new synergies, relate more fully to customers, rapidly reach new markets and quickly build and scale new offerings — is essential to generating higher levels of value.

Organizations that are slow to undergo a complete digital transformation risk being overtaken by new, nimbler competitors. Their customers will demand digitally-driven experiences that are as unique as they are, and delivering them “on demand” and performed at hyper-speed will be critical to long-term survival.

We have observed that successful companies take a systematic process to transforming a traditional supply chain into a digital supply network:

First, you need a vision. Imagine the power of your future digital supply network. This vision will become the Holy Grail in driving the transformation. According to Accenture Strategy research, two in five companies feel digital technologies aren’t given high priority within the company. This reinforces the importance of aligning digital investments to the specific business outcomes you’re looking to realize with your network. Those outcomes should be determined by the new demands and services that your digital customers are looking for — not just today, but also in 10, 15, 20 years.

Then, a blueprint. By creating a digital blueprint based on specific business outcomes, you can identify all the people, process, technology and governance aspects of the transformation, including any strategic digital partners to engage on unique value initiatives. This analysis will reveal the way work actually gets done along interrelated value streams across the business.

Finally, the transformation. Once the blueprint is created, break down the tasks and technologies that need to be implemented across the organization to realize the digital supply network vision. Set milestones for the journey. Outline how the convergence of the talent, physical, information, and financial supply chains, into one network, will perform in the new interconnected ecosystem.

Taken together, these steps will identify individual changes that need to be made in order to establish a digital supply network.

The Outlook

Digital technology is here to stay. With the power to drive a convergence of supply chain elements, digital can help companies capture huge savings and a competitive advantage. There’s no one-size-fits-all solution for creating a digital supply network — but in 2017, we can expect to see many more companies taking on this transformation.

Transforming the Supply Chain Into a Digital Supply Network