Struggles with the Digital Supply Chain

We’ve heard the promises of a digital industrial era for several years now. Artificially intelligent computers predicting when machine parts need to be repaired. Advanced analytics improving inventory management. Automated systems creating new, cheaper ways of manufacturing.

But while few doubt that a digitized supply chain can provide a huge amount of value to both company and customers, in many cases, a lack of digital strategy and available digital talent is keeping firms from achieving a game changing impact. “None of the senior executives surveyed indicated that their supply chain was fully digitized, suggesting that their businesses are not well enough prepared for the challenges to come,” says Bernard Raschke, a Korn Ferry senior client partner and author of the new report, “The Supply Chain Digital Disruption.”

In the report, Raschke and colleagues Paul Lambert and Tessa Waterman surveyed 100 senior supply chain executives to get a sense of how far firms have come along. Every executive said a digital supply chain had the potential to revolutionize the business. However, 74 percent said their firms have a long way to go before that happens.

Supply chains have gone through transformations before, of course. What was once a purely operational logistics function that reported to sales or manufacturing has shifted to an advanced planning processes going across corporate functions. Now, thanks to technical innovations such as the Internet of Things, a firm’s supply chain could become a driver of better, cheaper products and services.

But the executives Korn Ferry surveyed say that a lack of a clear digital strategy has been a major obstacle. “I hope in the future we will have a mindset that every function in the supply chain is primarily focused on digital,” Mark Tusveld, Nike’s senior director, global supply chain for digital, says in the report.

There are issues on the talent side as well. Only 53 of the 100 executives surveyed said their firm had formal role to lead the supply chain digitization movement. The next generation of Chief Supply Chain Officer has to be learning agile, Raschke says, an executive that is not only highly analytical but also a trend spotter and resource provider. Plus, that executive has to be able to influence the CEO. “A supply chain leader who cannot get the CEO’s ear, however technically savvy, has little chance to meet the challenges ahead,” he says.

At lower levels, many firms haven’t assessed the digital readiness of their own workforce. Raschke says firms can develop profiles identifying what are the traits and competencies supply chain leaders should have. That will make it easier for firms to go out and recruit new talent.