For the longest time, procurement and supply management teams have focused on cost-savings and providing accurate supply for their businesses.
More specifically, their value was primarily limited to efficiency (the minimization of cost for procurement services) and effectiveness (the maximization of business value).
In recent years, there is an increased focus beyond price reduction, with concentration towards contribution to total cost of ownership (TCO), and the management of overall value and demand.
Today, it’s about the value experience: the optimization of procurement relationships, engagement and collaboration for employees, customers and suppliers.
In doing so, start to consider ways procurement and supply management teams provide value to the rest of the organization, outside of cost cutting.
In order to understand the value of your process, you need top-level visibility into your supply and procurement processes with advanced data analytics capabilities.
At a larger scale, there needs to be more alignment and transparency between customer metrics and the use of market intelligence.
The most efficient way to take advantage of the varying sources of data currently available, is to put them on a cloud-based, digital network that incorporates a scalable platform.
Here are three ways a digital supply chain network will add value to your organization:
1. Gather better market intelligence in the world of constant change
Big data has never been more vital to a company’s success than it is today. We’ve officially entered the world where there is more than enough data. We need to better evaluate the data that we have, in a single place, across multiple enterprises to make decisions quickly and accurately.
A digital supply chain network digitalizes your end-to-end supply chain processes, gains real-time visibility of all supply chain events, and takes advantage of data-driven insights across both internal systems and your network partners. With data changing at a rate of 50x per second in a typical supply chain, your organization will be more productive and your supply chain more efficient by expanding your network to receive real-time updates.
2. Take advantage of better insight and predictive capabilities
Flash forward: Your organization has made the decision to better align data across your entire network. All information is in a single place and perhaps you access it across multiple devices, even globally. This will make your organization much more productive and capable of making better decisions. However, does this make you capable of keeping up with the speed of business? Not necessarily.
In order to be faster, you need to be smarter, with advanced visualization and AI capabilities within the network. Traditional supply chains are not only seeking end-to-end visibility, but accurate, descriptive and predictive intelligence. Imagine a world where you can optimize your service levels, costs and inventory faster, pre-emptively, to gain better insight for minimizing operational risk. Digital supply chain networks that leverage artificial intelligence can process massive and diverse data sets from across all functions to provide better visibility with a path to the autonomous supply chain.
3. Define customer metrics that are measurable
The most effective way to show value in an organization is to provide measures that combine both strategy and process and in doing so, creates an accelerated speed to value and return on investment (ROI). With a digital supply chain network that creates visibility into inbound and outbound supply chain processes, you can start to not only report on but measure against value-add data, such as production cycle times, on-time delivery, and order processing accuracy. These types of metrics steer the conversation towards benefits, and away from cost savings.
While cost reduction and maximizing business value remains a critical aspect for an organization’s procurement and supply management team, strengthening supplier relationships with real-time visibility allows for a better customer experience across the entire supply chain. Putting the data on a single platform where all parties share the same crucial information needed to execute, enables everyone involved to experience the benefits orchestrated through data alignment and collaboration.