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Digital-First Fridays: The Digital Supply Network

Digital makes it possible for the smallest company to participate in the global economy. Disruption is lowering barriers to entry, which results in higher levels of competition. Based on stiffer competition, businesses are shifting from a vertically integrated supply chain model to a highly specialized, outsourced network model. In the digital world, these networks will be made up of low-cost suppliers and virtual manufacturers, and will serve niche industries that span the globe.

Many products in the future will be built-to-order. Organizations are already realizing the value of customization: you can design your own Goldfish crackers thanks to Pepperidge Farm, NIKEiD invites you to customize Nike running shoes for optimized performance—even Coke bottle labels can be personalized.

While this new environment of hyper-differentiation provides exciting ways of engaging customers, it is also requiring companies to radically overhaul their supply chain processes. As companies specialize and outsource, operations need to scale, shift, and contract depending on business and market requirements. New channels need to be leveraged and new markets serviced.

To be able to differentiate, organizations need to have agility and flexibility built into their production lines. This calls for the digitalization of end-to-end processes across the supply network. The benefits of digitalizing processes are many: costs can be reduced, turnaround times improved by several orders of magnitude, errors minimized, and new channels and new routes to the customer can be explored.

The Digital Supply Network with Customer at the Hub

The Digital Supply Network with Customer at the Hub

Increased flexibility and agility are the keys to success. Digital leaders are achieving this by digitizing core business processes and adopting emerging technologies. They are automating processes and delivering 24/7 engagement with self-service capabilities. B2B integration is providing the sophisticated synchronization of data and transactions for the automated exchange of goods, commerce, and information. Analytics are giving the enterprise incredible insights for supply chain optimization and end-to-end supply chain visibility. The Internet of Things (IoT) promises to further enhance the richness of supply chain information, creating networks that are intelligent and instrumented. Managing all of this information across a collaborative platform is the key to optimization and B2B integration in efficient, secure, and compliant ways.

To meet the challenges of the evolving supply chain, the digital enterprise will depend on digital technology for increased global collaboration, seamless communication, real-time insights, and execution. The digital workplace will have to accommodate these shifts in the market and the technical expertise required to manage disruptive innovations. Supply networks will have to be optimized to satisfy customers and drive competitive advantage. The transformational Digital Workplace is the topic of the next post in this series.

Find out how you can capitalize on digital disruption.

To learn more, read my book, Digital: Disrupt or Die.

Mark Barrenechea

Mark J. Barrenechea is OpenText's CEO & CTO. A prominent thought leader, he has extensive experience in information technology and his vision is to enable the digital world to help transform organizations.

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