In today’s dynamic business environment, consumer behavior and expectations are changing dramatically. As the demands on supply chains continue to increase, so do the expectations of consumers. Most consumers are conducting their own research before making decisions, buying across multiple channels and expecting customized products and services. Consumers also expect transparency – in product origin, quality standards, and how organizations are improving their environmental and sustainability efforts.
Supply chains are particularly affected by these changes, as well as other external influences that threaten to disrupt their daily operations, such as: extreme weather conditions, supply shortages, global health issues, and economic crises. To stay ahead of all of these risk factors and changing demands, organizations need to discard their linear supply chain models and embrace an autonomous, end-to-end connected ecosystem.
Leveraging Technology to Transform The Supply Chain
Digital supply chains use one integrated network for all relevant supply chain partners, including procurement, suppliers, service providers, and even customers. These autonomous ecosystems are connected by data that is continuously available to all stakeholders, optimizing information quality and improving decision-making. But do the benefits outweigh the initial onboarding costs?
The results of a recent PwC survey show that companies investing in digital technologies are achieving significant improvements to their supply chains, including productivity and efficiency gains. These “Digital Champions” who are implementing supply chain technologies and developing sophisticated automation and digitization are seeing tremendous return on their investment. This group reports an almost 7% increase in supply chain cost savings on a recurring basis, along with almost 8% in revenue increases. This is significantly higher than average organizations, and more than double that which is achieved by Digital Novices.
Digital Champion Best Practices
Some of the benefits are not directly quantifiable, but are certainly strategic in nature – improved planning, higher quality, and increased customer satisfaction and retention. The financial benefits include greater profitability, reduced costs, accelerated time-to-market, and faster time-to-delivery.
PwC’s study demonstrates that Digital Champions focus on several core building blocks within their supply chains to offset multiple risk areas. The areas of focus are listed below and can serve as a guide for other organizations planning their own digital transformation efforts:
Organizations must continually develop their supply chain capabilities to improve resilience and agility in a constantly evolving business and environmental ecosystem. To achieve this, they need a digital end-to-end supply chain solution that will improve visibility, integrate data, synchronize stakeholders, and keep up with the changing demands of customers. Digital transformation will lead to long-term supply chain success and is a key factor in driving the durable growth of the global economy.
Learn how Ivalua’s flexible Source-to-Pay solution can lead your supply chain organization to digitally transform–faster and further.
View the full research Study by PwC
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Contributing writers from inside and outside Ivalua occasionally add items and information to this blog. We are a team who share an interest and curiosity about procurement and spend management.