An integrated digital supply chain ecosystem

In today’s fast-paced business environment, supply chains play a critical role in ensuring the efficient movement of goods from manufacturers to customers. Over the years, supply chains have evolved significantly, and the integration of digital technologies has had a massive impact on it.

In this fifth blog of The Inside Track, you will discover how converging supply chain and technology strategies leads to competitive advantages. Shaping your supply chain application systems requires so much more than compiling a set of best of breeds solutions. 
 

The Supply Chain Revolution

Skander Kammoun, Director Deloitte SAP EWM & TM Centre of Excellence, elaborates on how a conjunction of phenomena have driven the supply chain to a revolution: The so-called: digital supply chain

First of all, customer centricity made it into the core of a new generation of supply chains. Organisations realised that their supply chain has to evolve from just a cost centre into a winning factor in today’s market. This goal could not be fulfilled with a traditional linear model where different functions are operating in silos.

Data analytics, cloud transformations, machine learning and artificial intelligence were the major factors that pushed the software providers to reshape and rethink their solutions providing their version of the ‘digital supply chain’.

This shift opened a world of new possibilities and capabilities when it comes to offering a scalable and standardised cost-efficient supply chain landscape with a clear framework for innovation. It was unique to see the business of supply chains and the technology world marching towards the same goal.

Choosing the right WMS and TMS without silo-thinking

In the past Deloitte was helping customers to select a WMS (Warehouse Management System) or a TMS (Transport Management System), focusing on the ability of that system to deliver a set of capabilities that were deemed necessary to optimise the operation of the company. Those decisions were taken in silos, function by function.

Stijn Van Hoof, Partner at Deloitte, gives some examples of that silo-thinking.

• A global medical device company, operating with SAP as an ERP, selected a WMS from a different provider that was deemed to be ‘best of breed’, relative to the medical device industry. The transformation was particularly complex and a significant proportion of the implementation effort went into the end-to-end, data model and other integrations of the WMS to SAP. At the end, the company realised that they still didn’t have one cohesive landscape that they were aspiring to achieve. 
• A life science company had a non SAP ERP and selected SAP EWM as a WMS, encountering almost the same challenges.

Therefore it was important to rethink the strategy of building a supply chain execution landscape.

Integration as primary criteria

To build a cohesive integrated supply chain system, companies should first shortlist the software providers that offer an off-the-shelf and natively integrated supply chain execution suite. Of course, the back bone ERP system has an influence over which provider to assess first: if you have an Oracle ERP, you should consider Oracle first, but if you are running on SAP ERP, it is better to explore the SAP chain suite first.

Nevertheless, the goal should be to select the supply chain suite that covers most of the foundational end-to-end processes. Maybe the TMS that comes as part of a particular supply chain suite doesn’t offer the company the best capabilities. As a consequence, the company should choose another TMS to obtain the strategic goal to implement a cohesive supply chain execution ecosystem. Of course this comes with a cost. 

Competitive advantages

The secondary but nevertheless critical step of building a robust and integrated supply chain solution, is to enrich your supply chain ecosystem by opening up to innovative solutions that offer competitive advantages towards your competitors.
One way of doing this is to integrate you core supply chain suite to potential third party software that could complement your WMS, TMC, etc.

Some examples:

• Some new technology players in the field of cognitive analytics or machine learning are offering cloud based applications built on data lakes, where data is synchronised. As a consequence, these systems are offering dashboards and reporting capabilities that allow you to have an unprecedented insight about your supply chain
• Another example in the domain of WMS concerns a software company that specialises in cognitive analytics that created a cloud based application with the functionality to analyse and predict disfunctions across the full supply chain cycle. By raising alerts on time, the supply chain management has a very powerful tool to anticipate and avoid stock outages.

Key take-aways:

• The first step to an integrated end-to-end supply chain is an integrated supply chain landscape.
• Prioritise in acquiring a natively integrated suite and avoid the risk, cost and time required to do the integration yourself.
• Once you have your core capabilities covered, it is time to look at the competitive advantage capabilities offered by cloud based third party applications.
• Explore the opportunities and pick what fits your company and goals.

Our advice

Every executive agrees an end-to-end process integration is a desirable outcome. The debate is more towards how you get there?
Deloitte’s point of view is clear:

• Leverage an off-the-shelf integrated supply chain suites for your core foundational processes and bank on the cost efficiency and standardisation that this could drive.
• Invest on the strategic and differentiating processes by integrating innovative solutions that will blend very nicely with your core supply chain suite.