53
54 they start receiving requests by most of their big buyers to switch to industry 4.0 they will be forced to adhere to their digitalized system or might soon become obsolete and lose shares of their businesses.
Smart supply chain enablers — success factors
Firstly, it is crucial for companies to develop a strategy that is totally receptive and responsible to opportunities on offer in a fully digitalized medium. Indeed, this task is considered to be the most difficult task for companies that are starting to incorporate smart supply chain, yet it is of extreme importance. If disregarded, the digitalized supply chain system will likely be proved impossible. This system must be based on new
business models and not on just on the company’s current business model and
operations. New business models that include leapfrogging levels in the value chain as well as creating sales channels must be taken as reference in model once digitalization has been implemented.
When the strategy is set, companies must refer to a couple of key capabilities in order to implement it correctly. They must also refer to the supply chain applications deliberated previously. The key capabilities necessarily are as follows:
• Processes. It is the process of establishing a new end-to-end connection clinking consumer to buyers or customers to suppliers. The new digitalization technology makes such connection possible due to cloud-based platforms that make these collaborations possible.
• Organization and skills. This process engenders an end-to-end comprehension of the value chain mechanics. This results in altering the mindset; from firefighter mentality -solving problems instantly as they pop up – to transforming into a supply chain orchestrator. One that is able to optimize, see and manage the whole chain. This level of digitalization requires a high level of adaptability since it will necessitate a shift towards a fast learning digital culture that endorses global multimedia communication across different users and medias. Also, it
55 necessitates updating users to the new level of expertise required to adapt and build the necessary technology to carry out digitalized supply chain operations.
• Performance management. It is the process of setting rules for the management of the supply chain and implementing key indicators to assess and measure the performance outcome.
• Partnering. It is important to focus on making connections and partnering up with other companies because a fully digitalized supply chain system cannot be implemented nor built without collaborating with other supplies and a variety of other technology providers.
• Technology. The last key capability is to plan a road map for the variety of old and new technologies that will reinforce the digitalized supply chain system. That includes the databases, the analytics the information integration layer and finally the cloud.
Supply chain maturity
Only a few companies were able to reach something close to a fully mature digital supply chain system. In order to ensure that efforts are coherently being exerted, it is crucial for companies to be aware of their starting point and starting position. There are four stages of maturity in this process:
1. Digital novice. At the first stage the firms are still starting their digitalization journey. Their supply chain procedures are discrete and they are still supported by business units and individual departments.
2. Vertical integrator. At the second stage, the company should have managed to incorporate internally the digitalized supply chain processes among all
departments.
3. Horizontal collaborator. At the third companies should have started to adapt to work with supply chain partners and should be able to set defined goals and carry out mutual processes in order to attain a good level of fairness and honesty in the chain.
56 4. Digital champion. At the last stage, companies should be at their peak level of
collaboration with several partners and all their operations must be mutually transparent, while taking into consideration mutual benefits in the process as well as opting together to optimize the whole supply chain.
57
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Table of figures
Figure 1-1 Size of manufacturing industry in Europe 1191 vs 2011 ... 12
Figure 2-1 Industrial Revolutions Timeline Source: Industrial Revolution Research ... 16
Figure 3-1 Sources of forecast error Source:End to end analytics Demand Planning &Forecasting ... 22
Figure 3-2 Supply Chain Ecosystem ... 22
Figure 3-3 Effect of push technolgies and pull demand on the digital supply chain. Source PWC: Strategy & analysis Industry 4.0 and connected supply chain ... 23
Figure 4.1 Traditional System of Data Interchange Source: EDI Basics ... 24
Figure 4.2 Electronic Data Interchange Source:EDI Basics ... 25
Figure 4-3 Maturity and Penetration of Industries to B2B eCommerce Source: Accenture ... 27
Figure 4-4 EDI Usage by Size of Company Source: Accenture ... 27
Figure 4-5 EDI Usage By Region Source: Accenture ... 28
Figure 5-1 Business Relationship vs Partner Dimension and its Influence on Method ... 32
Figure 5-2Data Flow EDI vs Web Portal ... 33
Figure 5-3 WBS of the project ... 34
Figure 5-4 Shows Phases of Implementation for Web Portal and EDI ... 35
Figure 5-5 Steps during the adhesion phase, it ends when suppliers are onboarded. ... 37