What is stated by Scott Sopher from Deloitte Consulting in the report “Next-Generation Supply Chain” expresses the same we were analyzing in the previous article, which I recommend you read before moving on, regarding the future of textile supply chain. This is the previous post: “Eight disruptive technologies impacting the textile supply chain”.
“As digital capability fuels customer expectations to unprecedented heights, the Next-Generation Supply Chain must be proactive and predictive, with all of its links interconnected and synchronized to the same drum beat of consumer demand.”
The Next-Generation Supply Chain is evolving from the more traditional model of a series of linear, individual, dis-synchronized links into a more connected, harmonized network of trading partners. This Next-Generation Supply Chain has three distinct characteristics: Digital, On-Demand and Always-on.
1. Emergence of the Digital Supply Chain.
The digital revolution is upon us, driven by exponential advancements in computing power and memory. More data was created in the past two years than all previous years in history combined. It is now possible to access comprehensive data from every link of the supply chain.
Next-Generation Supply Chains will take advantage of this trend and develop new digital capabilities including the strategic placement and use of sensors and artificial intelligence.
This newly available data provides the foundation for real-time visibility and sharing of information, filtered through a layer of analytics, and communicated across the entire supply chain for proactive and full-sighted operations.
The physical and digital worlds.
The physical and digital worlds are converging, transforming traditional, linear supply chains into connected, learning, scalable and nimble supply networks. The exponential rise of the technologies covered in this report creates a decision tipping point for supply chain leaders: disrupt or be disrupted. A significant majority, 80%, of survey respondents believes the digital supply chain will be the predominant model within the next 5 years; 16% of these supply chain leaders recognize it is already here. Disruption from this digital era is already evident in how it is transforming industries and changing consumer expectations.
Robotics and automation.
At the same time, machines are augmenting human performance; traditional, linear supply chain nodes are evolving into a set of dynamic networks; and the “AlwaysOn” and on-demand networks can now be more effectively tied to the broader business strategy to become a source of competitive advantage. With an integrated network, companies can compete on differentiating factors, such as speed or service, and stay ahead of the business competition by applying this differentiator across all the traditional channels of the supply chain.
Digitizing the supply chain involves a continuous ﬂow of information between the physical and digital worlds. The creation and collection of these digital transactions can be the key to unlocking innovative solutions to the most complex challenges, creating competitive advantage.
The BIG DATA analyses creates the predictive supply chain.
A company’s first step into this arena is establishing the IT infrastructure to make sure the data is collected in an automated and organized fashion, stored with proper amounts of capacity and cleansed to ensure reliability.
Thanks to the analyses of the BIG DATA –we have deeply explained this aspect on “Data analysis is fashion”- the commercial information and the prints being left by the digital costumer, fashion brands have changed the fashion cycle and started conceiving styles from the prospective design to the current analysis of predictive data and from a “offer and demand” model to a “demand and offer” model, because they know what the client wants, they design it and they immediately place it in front of the client’s eyes in physical and online stores.
Escalating On-Demand Customer Requirements.
The digital revolution is also fundamentally changing the way that consumers behave. According to a report published by Deloitte University Press, customers have an increased comfort with technology, and more specifically the technology used to facilitate online transactions, fuelled by high usage of online channels. Users have shorter attention spans, are becoming more demanding and expect more from businesses in terms of short service cycles, lower costs, transparency and corporate responsibility.
Indeed, an astounding array of information regarding their purchases is now at a consumer’s fingertips at instantaneous speeds, leading them to expect more from the brand they choose and the supply chains. Customer expectations for faster, better service are rapidly escalating. Next-day is no longer considered a premium service for which customers are willing to pay. Same day is becoming more prevalent.
2. On-demand supply chain.
The next frontier of supply chain development is on-demand, a level of service that will require next-generation supply chains to provide anywhere, anytime delivery to customers at the time the customer orders and specifies it, 100% omni-channel!
Leading firms are increasingly demanding speed, visibility and transparency from their supply chain partners to meet customer expectations, and it is creating pressure down the supply chain. B2B vendors must evolve as retailers have to provide more and more ﬂexibility and efficiency to support the on-demand model of reducing costs and increased service. This means “on-demand” is not just a challenge for retailers and customer-facing industries, but it is impacting firms regardless of size, industry or position in the value chain.
Customer demands for faster response times (55%), and rising customer demands for lower delivered costs (53%) are two of the top 5 issues supply chain leaders and professionals find the most challenging.
For supply chain professionals, these trends are pushing against them from all sides as they are asked to deliver product faster, cheaper and in a customized way.
3. “Always-on” supply chains.
An astounding array of information on purchases is now at the fingertips of consumers at nearly instantaneous speeds, leading them to expect more. Digital order confirmations, status updates, in-route shipment and delivery vehicle tracking information, on-demand order fulfillment and proof of delivery are a few examples.
The net implication for supply chains is a challenge to perform ﬂawlessly, efficiently and transparently if they are to meet these escalating service expectations.
The current innovations make it possible for supply chains to operate around the clock to outpace the challenges. In essence, they must be “always-on.
Always-On supply chains are defined as:
“An integrated set of supply networks characterized by a continuous and high-velocity ﬂow of information and analytics, creating predictive actionable decisions that better serve the customer.”
You may find more information about fashion and Industry 4.0 in the Modaes.es blog.
See you in the next post!