Supply Chain

Digital business means big changes for Supply Chains

Chief supply chain officers have an opportunity to lead business transformation by influencing three changes in the digital world.

Opening the Gartner Supply Chain Executive Conference, Peter Sondergaard, senior vice president and global head of research at Gartner, told the audience of supply chain strategists, that there are three things that will change in the digital era:

  • The way power is distributed among and within businesses
  • The way technology impacts the supply chain
  • The way to establish leadership

CSCOs must react to these changes and learn to control and influence all three.

Peter Sondergaard, global head of research at Gartner, highlights three things that will change in the digital era during the Gartner Supply Chain Conference.

“Simply stated, every business unit is a technology start up. There is a shift of demand and control toward digital business units closer to the customer, where business units, such as the supply chain organization, are taking on more technology spending,” said Mr. Sondergaard. “In leading organizations, one quarter of enterprise costs will be devoted to the digital transformation. About 20 percent of that will be allocated directly to supply chain transformation. Digital spending by business functions is directly impacting the ability of the CSCO to achieve a higher level of demand-driven value network maturity. This is the power shift.”

The second area to change is technology. Digital technology is reshaping the supply chain. The CSCO of the past was most concerned with enterprise resource planning (ERP) implementations and master data management. Now, supply design and supply chain analytics are in the top five priorities for leading enterprises.

But technologies are not just for incremental improvement. They can be disruptive too. Take, for example, a drone. The drone will not only do last-mile package delivery, but will monitor disruptions upstream in the supply chain. There are enormous applications for these devices – from agricultural and geographical survey to oil and gas pipeline inspections to disaster response and recovery.

The third area of change is leadership. Talent is the key to digital leadership, and leaders must focus on talent and organizational strategy. Focus on talent that understand sales and operations planning, analytics and the emerging world of smart machines.

“The best leadership advice is to make your bosses’ priorities your priorities,” said Mr. Sondergaard. “Gartner’s 2015 CEO Survey showed that CEO’s top priorities are information technology and talent. Make those your top priorities.”

Video replays from the Gartner Supply Chain Executive Conference will be available on Gartner Events On Demand.

Source: Gartner

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