Brian Pacula, partner in the Operations Excellence practice of West Monroe, tells how manufacturers and supply chains are prioritizing their spend on technology in the post-pandemic era.

Manufacturers held back spending during the height of the COVID-19 pandemic. Now, that pent-up demand is being released, causing a surge in investment in digital transformation across multiple areas of manufacturing, distribution and the supply chain, Pacula says. “The walls have been broken down, floodgates have opened, and people are doubling down on digital investment to make sure they don’t get disrupted again,” he adds.

Specific projects include acquisition of technology for production and demand planning, along with tools for better access to forecasting data, with an eye toward acquiring insights that drive key decisions. Network modeling applications, such as the creation of digital twins for assessing multiple “what-if” scenarios, are also being brought to the fore.   Spending on supply chain functions covers such areas as warehouse and inventory management, as well as visibility and traceability of perishable goods. 

It’s not just a matter of focusing on technology, Pacula says. Companies are also spending to improve the process side, including sales and operations planning and execution. In addition, they’re bringing forward old concepts like Lean and applying new technology to them. “The more you can focus on digital transformation,” he says, “the more it’s going to help drive you to be in the upper-right quadrant against your competitors.” 

None of this can succeed without a simultaneous effort to develop talent. A new set of skills is required to work with many of the digital tools that are on the market today, as supply chains move away from reliance on paper and spreadsheets in favor of digitized data.

Companies “want to be able to have data at their fingertips to make the right near-term decisions,” Pacula says. “They need to be ready for anything and everything.”