Digital Transformation in Supply Chain Planning: Barrier or Enabler?
Study shows most companies are still formulating and gaining support for a digital strategy, and fear of change is the biggest roadblock
By George Fowler, group vice president, Spinnaker Supply Chain
Has your company initiated a digital transformation initiative? What’s driving you, or holding you back? If you’ve not yet embarked on your digitization journey, you seem to be in good company. ToolsGroup and Spinnaker recently partnered up on a digital transformation study, and we found that only 7% of responding companies are reaping the benefits of digital transformation of supply chain planning. With fear of change the leading obstacle to implementation of digital planning (30% of respondents), the question seems to be, will digitization be a barrier or an enabler for you?
Between April and July of 2019, we surveyed 200 supply chain professionals across industries as part of our study, titled: Digital Transformation in Supply Chain Planning: On Pace or at Risk?
Here are just a few highlights:
- 89% of responding companies noted volatile demand and unpredictable customers as at least a moderate supply chain planning challenge. Thus, increasing the need for a faster, more agile supply chain enabled by digitization enables.
- 58% of companies are still in the ‘Exploring’ or ‘Evaluating’ phase of digitizing their supply chain. Most companies are eager to capture the value of supply chain technologies however they run into a roadblock when faced with the staggering numbers of applications to consider.
- Change is a huge obstacle to digital transformation. It’s one thing to evaluate and select an application, however it’s another huge step to adapt users for full adoption of new systems. 31% of companies are investing in training for their staff to help fill the knowledge gap to further increase the success of these projects.
Digital transformation marks a radical rethinking of how an organization uses technology, people, and processes to improve business performance.”
After studying all the findings, there are two points that stand out to me: First, digital transformation is not a singular activity but a set of interrelated activities that span across the People, Process, Technology, Policy, and Metrics. Organizations are actively working to strike a balance across all those dimensions: they need innovative planning technologies that support operational business goals, skilled personnel to apply the technology profitably, and change management to effectively embed these capabilities into corporate culture.
Second, efforts to realize the benefits of digital transformation are moving forward at a fast and furious pace as companies identify use cases and build roadmaps. The convergence of digital transformation technologies like machine learning and IoT have gained significant buy-in and investment within the C-Suite. Companies are moving beyond the mere notion of a digital twin and aspiring to reinvent themselves as an entirely new entity.
With every technology project, there is never a ‘one size fits all’ solution. Digital transformation is not a once-and-done activity, rather a set of steps and projects along the way that add up to a huge competitive advantage. The purpose of our study and report is to gauge the status of of digital transformation for companies like yours moving into 2020. I encourage you to look at the report and see where you stand compared to your peers. So, what’s it going to be for you? Will digitization be an enabler of business advantage or will the absence of a strategy make it a barrier? Check out the survey report for complete results and helpful insights
George Fowler is a Group Vice President in Spinnaker’s Supply Chain business unit, a ToolsGroup partner. An industry veteran, George has more than 24 years of experience in supply chain and business process management. He has personally led more than 75 supply planning initiatives that have generated billions in realized business value for companies across various industry verticals. A three-time recipient of Supply and Demand Chain Magazine’s Top 100 Pros to Know award, George has distinguished himself as one of the industry’s more notable supply chain experts with knowledge of many of the industry’s strategic and advanced planning technologies.