June 2016 | Commentary | IT Matters: Logistics & Supply Chain Technology

Goodbye, Linear Supply Chain. Hello, Digital Supply Network

Tags: Logistics, Technology , Supply Chain

Gary Hanifan is Managing Director, Accenture, 703-947-1838

Ready or not, the death of the linear supply chain is upon us. Supply chains built to deliver reliable, cost-effective results are no longer fit for purpose in today's digitally driven world. Enter the digital supply network (DSN).

DSNs intertwine, even harmonize, four supply chains—physical, information, talent, and financial—that businesses have operated separately for decades. The result: A cohesive network that makes sourcing, production, and product delivery more efficient and profitable as it delivers a customer-pleasing order fulfillment experience.

More than that, DSNs give management end-to-end visibility into the supply chain, with control towers that analyze supply, production, distribution, and sales data collected along the way. That valuable information can warn of a problem, or can offer insights about new ways of working and enable execution of a broader digital business strategy.

DSNs allow companies to shorten processes, potentially eliminate functions, and identify ways to be more competitive with new services and products. For instance, companies may not need purchase orders because sensors embedded in products could enable an auto-receipt function upon delivery, and trigger a transfer of funds for payments.

In fact, we know that the value of the DSN to your business is not to import or replicate your existing supply chain into new networks. Rather, it is to reimagine and redesign the value of your business through a DSN lens.

Digital technologies contributing to the Industrial Internet of Things are creating new vistas of opportunity, and companies need these DSNs to help them be more competitive.

Moving Together

Companies have traditionally created separate management structures for supply chain components such as human resources, information, products, and financial transactions. It is the physical supply chain that transports goods, which people equate with a supply chain. This narrow view is an anchor that can weigh down companies, and prevent them from making a paradigm shift.

A DSN connects the physical supply chain with the talent, financial, and information supply chains, creating visibility across the spectrum. So as companies begin to redesign operating footprints, they reimagine processes and consider how they can access different suppliers and markets. Done correctly, the DSN operates at the speed companies need to create value.

One Size Does Not Fit All

The DSN is a modern strategic approach that deconstructs and restructures supply chain strategies to deliver value. With it, a company can realize its strategic vision as it begins to see new business opportunities—new ways of working.

As such, a company's DSN adoption will be inherently fit for purpose, tailored to that company's needs and future proof. No two DSNs are the same, but they all should exhibit four key characteristics: connected, intelligent, scalable, and rapid. DSNs deliver real-time data, enable real-time decisions, and provide end-to-end supply chain visibility.

Built from modern digital technologies, and bringing all four supply chains into harmony, the DSN of tomorrow is ready to be deployed today. Companies holding on to the dying linear supply chain are closing themselves off from a strategy that operates at a lower price point while doing more to enable growth.






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