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Redefining the Supply Chain in Manufacturing through Digitization
Arindam Sen Director, Manufacturing Solutions | February 14, 2017
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Today, all organizations want a digitized and contextualized manufacturing environment to enable the digital supply chain where the stakeholders can quickly extract relevant information and make decisions. A digital supply chain has visibility across the supply chain where the goods and materials are physically located and the supply chain and financial achievement can be measured against targets.  And all these things can be achieved through various digital levers like Big Data and Predictive Analytics, Internet of the Things, Cloud Services, Robotic Automation, Omni-Channel E-Commerce, Machine Learning, and Blockchain.

A digital supply chain is a supply chain enabled by digital technologies to provide new revenue, value-producing opportunities. A true digital supply chain fully capitalizes on connectivity, system integration and the information-producing capabilities of "smart" components. In the diagram below few digitization levers have been mentioned which are used for various value chain components for manufacturing very frequently.

Product Development Marketing & Sales Planning Procurement Manufacturing Fulfillment & Logistics After sales & Service
Social Media Listening Tools Digital marketing Integrated Business Planning Automated procurement 3D printing and additive manufacturing IOT – GPS and GSM sensors Remote Diagnostics
3D Printing – Design as a Service Big Data Analytics Supply Chain Control Tower Advanced procurement with collaborative optimization Robots and autonomous vehicles App based solutions Telematics
Collaborative design with supplier   Supply Chain Collaboration Predictive Spend Analytics Augmented Reality Paperless Logistics Customer Experience Management
IoT and Big Data Analytics   Demand Sensing Integrated supplier platforms IoT and predictive maintenance Robotics & Unmanned aerial vehicles (UAVs) or ‘drones’ On Field Service
    Analytics as a Service Managing Supplier related risks Smart factories Logistics Control Tower  
      Contract Management   IT interface with supplier  

Another big benefit that manufacturing companies get is partner enablement. Digital channels enable companies to penetrate in new market regions without any big investments. From traditional liner relation among partners, manufacturing companies transition itself to a network of a partner to ecosystem of partners, using various digitalization platforms enabled by IoT, Omni-Channel, Cloud, API Management etc. This enables even level 2 partners of a manufacturing company to join the ecosystem and actively participate in co-creation and co-innovation. Manufacturing companies benefit from Digital levers led transformation to extend their value chain across borders and thereby comprehensively exploiting global growth opportunities

Running and managing partnership becomes comparatively easier with digital levers and through ‘Outside In’ approach value is injected to OEM’s performance by bringing a new partner very smoothly. Also, the following manufacturing KPIs get positively impacted by usage of digital levers, thus increasing the efficiency of the supply chain.

KPI name

Type of KPI

UOM

SCOR Attribute

Forecast Accuracy

Parent

Percentage

Supply Chain reliability

Fill Rate

Parent

Percentage

Supply Chain Responsiveness

Perfect Order Fulfilment

Parent

Percentage

Supply Chain reliability

-%On Time Delivery

Child

Percentage

Supply Chain reliability

-%Ship complete

Child

Percentage

Supply Chain reliability

-%Invoice Accuracy

Child

Percentage

Supply Chain reliability

-%Damage Free

Child

Percentage

Supply Chain reliability

Inventory Turn

Parent

Days

Supply Chain Agility

Cash to cash Cycle Time

Parent

Days

Supply Chain Management

-Inventory days of Supply

Child

Days

Supply Chain Management

-Days of Sales outstanding

Child

Days

Supply Chain Management

-Days of Payable Outstanding

Child

Days

Supply Chain Management

Order Management Cycle Time

Parent

Days

Supply Chain Responsiveness

Return on Asset

Parent

Percentage

Supply Chain Asset Management

Procurement Cycle Time

Parent

Days

Supply Chain Responsiveness

COGS as a % of Revenue

Parent

Percentage

Supply Chain Cost