Intangible Benefits of a Digital Supply Chain
The digital age has thoroughly reshaped the average value of any large corporation now. The average company’s value today is largely the sum of its ideas and solutions. And those solutions increasingly come from harnessing digital technology to do things better and faster along every link of the value chain—delivering more convenience, shortening cycle times, providing supply chain transparency, and other intangibles that build stronger, more enduring customer relationships.
For many traditional company executives, digital technology can become overwhelming. Amid a massive proliferation of ‘must-have’ digital solutions, just knowing where to start can often be the biggest hurdle. Two useful ways to answer this dilemma is:
- Which digital solutions enable you to either reinforce or expand the value you offer your customers?
- Where can you invest in capabilities that enable you to create a defensible moat against competition?
Applying digital solutions across the supply chain is a powerful way for businesses to deliver results along both these dimensions. Every company faces a different set of needs and challenges. But when defining a digital supply chain strategy, it is critical to start with the customer and work backwards. For a business-to-business (B2B) company, the key opportunity might be to mimic the smooth and efficient business-to-consumer (B2C) customer experience.
Digital technology, of course, has given some companies the opportunity to make monumental disruptive bets. But not every digital investment needs to be monumental. Where most companies stumble is the assumption that they need to reinvent themselves entirely or invest heavily in technology just because everybody says they should. Often, the right answer is simpler and less expensive than it might seem.
Leadership teams recognize that their customers are demanding digital supply chain solutions sooner rather than later. And they know that the market for digital technology will only get more complex and confusing as more digital products emerge looking for a problem to solve. But that doesn’t mean devising and choreographing the right digital strategy needs to tie companies in knots or cause them to overinvest in the wrong solutions.
The critical set of tests for any digital investment is the same as you already use for more conventional investments: Does it serve your strategy, add value for existing customers or open the door to new ones? In other words, will it improve what you do best and add to your company’s intangible value? With those questions forming the funnel, the list of solutions at the narrow end will become a lot more manageable.