It is a Network, Not a Chain

In the digital world the supply chain is not a chain, it’s a network.

The network is made up of connections between businesses, suppliers, partners, and customers. The customer sits at the hub of this network, driving the supply chain, assembling goods and services from a variety of vendors. Participation is plug-and-play, with suppliers filling in gaps to deliver satisfying customer experiences.

The customer experience is really only as good as the supply network that supports it.

The “value chain” of the past has been replaced by the consumer’s “whole-life platform”. As part of this platform, consumers expect mass customization, same-day delivery, dynamic pricing, and real-time visibility.

All of these expectations are impacting today’s supply chain (which is really a network).

The full potential of Digital cannot be realized without reinventing the supply chain.

In the digital world, supply networks are flexible, with fully integrated end-to-end processes and commerce. Low-cost suppliers and digital manufacturers have agility built into their production lines. Operations can scale rapidly—at a global level—so they are digitalized and run in the Cloud. New channels are used to serve new markets.

The entire network is enriched through analytics and the Internet of Things (IoT). There is visibility at all nodes in the graph. Analytics move beyond contributing to supply chain optimization, revealing customer preferences and new paths to value. Better decisions can be made, so that better products and services can be delivered, faster.

The IoT will streamline the exchange of data and commerce across the network, with Business-to-Business (B2B) integration operating as the collaborative platform for managing global business transactions, securely and compliantly.

Every high-performing supply chain is essentially a dynamic digital network. Over the next few years, more than half of the Global 2,000s will re-design their supply chains into networks to support digital business. The IoT will play a central role not only in creating wired, intelligent, and instrumented supply networks, but also a global, connected network. I’ll examine how in more detail in my next post in this series.

For more thoughts ON DIGITAL, download the book.