More focused approach needed to digitise supply chains

17 December 2018

The vast majority of companies are failing to digitise their supply chains, despite it being a top priority for many firms, according to a report.

One in two companies described having a digital supply chain as one of their top three priorities. For most organisations (77%) cutting costs is the main driver for investing in digital supply chain initiatives.  

But just one in seven (14%) organisations are able to bring at least one of their supply chain digital initiatives to fruition, with 86% “stuck at either PoC [proof of concept] or pilot stage,” according to Digital Supply Chain’s Missing Link: Focus by Capgemini.

It highlights the results of a global survey of supply chain executives at more than 1,000 organisations ranging from consumer products and manufacturing, involving nine countries (France, Germany, India, Italy, Netherlands, Spain, Sweden, UK and the US).

The report found that those companies trying to digitise their supply chain have an average of 29 projects at the pre-deployment stage.

It warns: “By stretching themselves too thinly across multiple initiatives, organisations are unable to see programmes to completion or gain the benefits of scaled adoption.”

Another obstacle to progress is getting backing from the top, it said. “We found that 57% of executives in our research feel that leadership’s lack of commitment is a key challenge.”

Having a digital supply chain is not something that can be done in isolation, and involves other business functions such as IT, HR and procurement.
“The programme, therefore, cannot be a true success with just one business unit driving it, and needs championing by senior leadership.”

The report added: “Successful organisations will have clear frameworks to identify the right digital initiatives that are aligned with their goals, learn fast from their pilot implementations, and be determined and able to reach scale.”

Commenting on the findings, Dharmendra Patwardhan, head of the digital supply chain practice for business services at Capgemini, said: “While most large organisations clearly grasp the importance of supply chain digitisation, few appear to have implemented the necessary mechanisms and procedures to turn it into a reality.”

Companies are running too many projects and need to have a more focused approach, he said.

“Digitisation of the supply chain will only be achieved by rationalising current investments, progressing on those that can be shown to drive returns, and involving suppliers and distributors in the process of change.”

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