CSCMP's Supply Chain Quarterly
Strategy
October 17, 2019
Forward Thinking

Digital transformation simmers in supply chain planning circles

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Study finds most companies are still formulating and gaining support for a digital strategy, with fear of change and data challenges as leading roadblocks.

Few companies are reaping the benefits of a digitally transformed supply chain, citing fear of change and data challenges as key obstacles, according to a survey of more than 200 supply chain professionals, released in late September. 

The survey polled professionals from consumer packaged goods, distribution, food and beverage, manufacturing, and retail companies to find out how far along their firms are in implementing digital strategies and applying new technologies to supply chain processes. Conducted by supply chain software firm ToolsGroup and Spinnaker, a supply chain services company, the survey found that nearly 60% of professionals said their companies are still in the "exploring or evaluating" phase of digital transformation. Just 7% of companies said they are benefiting from digital transformation of their supply chains, with 14% indicating they have some type of machine learning project underway.

The study found that fear of change is the leading obstacle to implementing digital planning (30%), with data quality/lack of data (25%), aversion to risk (24%), and people/skills deficits (23%) close behind. It also identified the need for communication, decision making, and change management skills, on top of the standard technical skills required in the digital age. 

On the flip side, the study identified the following four key drivers of digital transformation in supply chain: 

  • Increased operational efficiencies (42%).
  •  Evolving customer behaviors and expectations (41%).
  •  Improving customer service levels/order fill rate (39%).
  • Driving business performance (37%).

Despite the slow progress, many companies are taking steps to evaluate and reinvent themselves in the digital era, the study authors said.

"Digital transformation is not seen as a singular activity but a set of interrelated activities that span across people, process, technology, policy, and metrics," according to George Fowler, group vice president in Spinnaker's supply chain business unit. "The study shows that companies are aspiring to reinvent themselves as an entirely new entity, working to balance all these dimensions to achieve their digital transformation goals. And there's no time to lose—the time is now to execute on a strategy before opportunity and competitive advantage is lost."

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