Analysis

The rise of the digital supply network

Industry 4.0 enables the digital transformation of supply chains

Supply chains traditionally are linear, with a discrete progression of design, plan, source, make, and deliver. Today, however, many supply chains are transforming from a staid sequence to a dynamic, interconnected system. This shift could lay the foundation for how companies compete in the future.

We call this interconnected, open system a digital supply network (DSN). DSNs integrate information from many different sources and locations to drive the physical act of production and distribution. By leveraging both the traditional and the new data sets, DSNs enable integrated views of the supply network and rapid use-case-appropriate latency responses to changing situations.

Many organizations already on the path to creating DSNs are shifting their focus away from managing and optimizing discrete functions, such as procurement and manufacturing. Instead, they often use DSNs to focus more holistically on how the full supply chain can better achieve business objectives, while informing corporate, business unit, and portfolio strategies. Indeed, DSNs increasingly allow supply chains to become an integral part of strategic planning and decision making. To this end, organizations can develop and leverage multiple DSNs to complement different facets of their strategy and more effectively target specific needs.

Digital disruption can change supply chains in any industry. In this report, we explore and analyze the next stage of growth for supply chains in DSNs by:

  • Tracing the technological evolutions that enable the rise of the DSN
  • Defining what the DSN is, along with its role within a wider business strategy
  • Examining the trade-offs inherent in a typical supply chain, and identifying the characteristics that can mitigate those trade-offs
  • Considering how to build a DSN
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