Over the years, I’ve participated in so many meetings about supply chain transformation that share one common denominator: when the technical jargon begins, eyes glaze over. What’s the surest way to lose the room when talking to business executives about transforming their supply chain? Mention words like “digital architecture,” “Application Programming Interfaces,” or “digital decoupling.” It’s not that they don’t want the fruits of those technologies—growth, a better customer experience, innovation—but they are having a hard time understanding and connecting very complex technologies to those results.
I promise I won’t go there in the wonky way consultants can sometimes. But I do want to talk to you about something I’m sure is on your mind if you’re a supply chain executive with an eye on the future: How can you use these technologies to transform how you do what you do in a way that leads to positive business results.
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Business needs drive new digital needs
First, though, let’s talk about how business has changed, because that’s what is driving much of this technology. My clients would say that they have a lot more business partners than they used to—in my line of work, we call these ecosystems. Ecosystems are just the nature of business today. For those partnerships to work to everyone’s best advantage, you need to be able to share data insights about your customer, your product, your systems and more. And that’s where digital architectures and APIs come in—they’re an admission ticket to more successful business partnering, scale, and speed. Companies need infrastructures and applications that can “talk” to each other. Digital architectures make that happen every day— think Netflix, Salesforce or any other recent tech star up, which are built on them.
Put simply: digital architectures allow companies to access and share data at a volume we have never seen before. They enable connected solutions and platforms (e.g. AWS, Azure) so they can build a better product and experience for their customers. They allow access to the right information at the right time, while protecting information that is proprietary or not to be shared. But most importantly, technology like APIs allows quick, standard connections and rapid adjustments as needed for each of your supply chain segments. It’s no surprise that Accenture’s latest supply chain research report shows more successful supply chains invest in digital architectures and related technologies. And those supply chains are showing a 13% revenue growth rate, with 3X higher contribution to their company’s total revenue.
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For example, during the coronavirus crisis, a global consumer goods company used artificial intelligence (AI) to comb through millions of deliveries and thousands of suppliers to spot potential risks or shortages—so it could quickly innovate on alternatives. Its systems had to be linked to those suppliers to give the company that bird’s eye view.
Accenture also worked with a global high-tech firm that wanted visibility across its supply chain. We built a control tower to manage their $2B fulfillment operations. It leveraged a platform (which is a key element of digital architecture) that provides near real-time visibility to global shipments, predicts delivery dates, and identifies exceptions to customer commitments.
Legacy technology won’t get you there
To get to that kind of competitive advantage, you need digital architectures. Can you do it with legacy technology? Yes, but not to the same extent and you’ll spend triple the dollars and the time to get to a result that brings you less value. If you want to reach your business results and customer experience goals faster and—frankly—better, you need to use digital technologies in an integrated, strategic way.
Approximately 10% of supply chains—just one in 10—are what we call a Master. Why do we call them this? Their results. Masters’ topline growth sails above peer companies. And one of the four key things they’re doing differently is investing in digital architectures so they can turn data insights into innovation—innovation that helps fuel the results you see below.
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Digital is now
When executives talk about digital as “the future,” I have to gently tell them leaders like this VP are making it happen right now. Digital is not a future state. It’s what could help your company become part of the elite 10%--our Masters—right now.
So in your next supply chain strategy meeting, rather than eyes glazing over, instead ask people like me to better tie the digital technology aspects of your supply chain to business benefits—and to leave the technical jargon at the door. Our Masters have shown it’s possible to leapfrog ahead—and your company could be doing so right now.