Digitalization and the Supply Chain

Digitalization in the supply chain is happening so fast and on so many fronts, it’s difficult to keep pace. Disruptive technologies in the physical world – e.g., next-generation robotics and autonomous vehicles – now integrate with big data analytics, sensors, blockchain and other virtual applications.

This integration is disrupting the traditional, linear supply chain model, “transforming [supply chains] into connected, intelligent, scalable, customizable, and nimble digital supply networks,” says consulting firm Deloitte. “Digital supply chain management now includes gathering insights from distributed data, sensors, and connected assets to drive actionable improvements via advanced analytical and digital solutions.”

Companies that successfully deploy supply chain digitalization stand to reap tremendous benefits. For example, Accenture estimates for a pharmaceutical manufacturer with $10 billion in annual sales revenue, a partial digitalization strategy that leverages the end-to-end capabilities of a digital supply network would save it upwards of $387 million in its manufacturing and supply processes.

According to McKinsey research, companies that aggressively digitalize their supply chains can expect to boost annual growth of earnings before interest and taxes (EBIT) by 3.2 percent and annual revenue growth by 2.3 percent.

So, where are companies on their supply chain digitalization journey? What kinds of technologies are they adopting today? Where will they invest tomorrow? And what benefits do they expect to reap from their investments?

To answer these questions, DHL Supply Chain surveyed nearly 350 supply chain and operations professionals in the five major regions of the world. The survey asked respondents about two types of supply chain digitalization – physical/ mechanical and information/analytical. This report summarizes the key findings.