Video
Most supply chain executives face the challenge of selecting technologies today that will meet the company's needs in the future. Sam Israelit, a partner in Bain's Performance Improvement practice, outlines how leading companies develop a balanced roadmap for short- and long-term digital investments.
Read the Bain Brief: Build a Digital Supply Chain Ready for the Future
Read the transcript below.
SAM ISRAELIT: It's very common to hear in the media these days about companies who are using digital technologies to reduce their costs by as much as 30% or increase their service levels by 80% to 100%, or even identify a new business model that allows them to compete more effectively. The challenge for most supply chain executives is, which technology should they be investing in for the long term? They could be doing anything from looking at drones for a last-mile delivery or, you know, putting robots in their distribution centers, or using neural networks to help them with planning.
What supply chain leaders are doing is they're really investing the time up front to understand what the needs of the business are. They work with their stakeholders to really understand those capabilities that are going to be needed three to five years from now. Then, once they understand the requirements, they start to assess their own current capabilities to figure out where they have gaps. Only then do they actually start to look at the different technologies and think about how they can help them close those gaps.
So once they understand these gaps, they can then start to identify those technologies that can help them close the gaps, and which investments they may need to make over some time frame, going forward. Once they have these opportunities identified, then they can actually figure out the roadmap, having a roadmap of investments, both for the short term and over the long term. It's especially important for them to think about quick wins. Quick wins are very important, because they help build momentum in the organization with early success, and they also provide savings opportunities to fund longer-term investments. So the companies that are taking this approach are the ones that are going to be successful in developing a supply chain that's fit for purpose.
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First published in Juli 2018