The digital economy is presenting businesses with myriad opportunities. But to capitalize on these prospects, companies must be willing to adapt, particularly in regard to how they manage their existing supply chain operations.
While people are finally beginning to recognize the potential benefits that come with the digital economy, too few companies are digitizing their operations in an effort to thrive in this dynamic environment. In fact, according to SAP research, 71% of organizations consider their digital maturity levels to be in the “early” or “developing” stages.
Given that fact, it’s entirely possible that people still don’t fully grasp the importance of transforming their existing business models and processes to succeed in today’s digital economy.
Below are five statements related to the digital economy and supply chain that many people believe to be true – and an explanation on why they are, indeed, false.
Myth #1: Your existing supply chain is sufficient to help you thrive in the digital economy
“To win in the digital economy,” says Hans Thalbauer, senior vice president of extended supply chain at SAP, “we have to reimagine how we design, plan, make, deliver, and operate our products and assets.”
Companies must put themselves in a position to develop environments in which they can access and manage data and processes in real time. This requires transforming your traditional supply chain into a digitized, extended supply chain, one that enables your business to be more connected, intelligent, responsive, and predictive.
By reimagining your existing supply chain, you can deliver superior customer experiences and increase revenue. In fact, companies that adapt to the digital world are 26% more profitable than their industry peers, according to MIT Sloan research.
Myth #2: Customers aren’t willing to pay for better experiences
Today’s customers crave a new type of experience. Omnichannel solutions can provide this, enabling buyers to discover a product online, research it on a mobile device, and purchase it in a retail store.
Given that these capabilities exist, your company needs to ensure it can deliver on the omnichannel fulfillment promise. To achieve this, the different channels must be able to support the development and/or delivery of goods, based on each individual customer’s preferences.
Customers are so eager for a better purchasing experience, 86% of them are willing to pay more money to get it, according to a 2014 American Express and Ebiquity survey.
By reimagining your existing supply chain and transforming it into a digitized, extended supply chain, you can gain the real-time insight you need to enable customer-centric processes and truly satisfy your buyers.
Myth #3: Customers love mass-produced products
Each and every one of your customers is wholly unique. So it’s no surprise that buyers are increasingly seeking out products that are customized to their individual preferences and needs.
Forty-two percent of consumers are interested in technology to customize and personalize products, and 19% are willing to pay a 10% price premium to individualize products, according to a Deloitte research study.
This growing demand for product customization is challenging companies considerably. Traditionally, supply chain organizations merely had to manufacture and/or ship full pallets of identical goods. Now, they’re tasked with delivering a lot size of one.
To support your customers’ growing desire for individualized products, your business must transform how it designs, produces, and delivers goods and services. It must embrace the latest technologies, harnessing the power of the Internet of Things (IoT), 3D printing, and other cutting-edge innovations.
By adopting a digital supply chain and smart manufacturing techniques, you can enable greater connectivity, responsiveness, agility, and reliability, empowering you to better meet your customers’ demands for individualized products.
Myth #4: Businesses can’t benefit from the sharing economy
The sharing economy revolves around the sharing of human and physical resources. Generally, consumers love it. Businesses, on the other hand, view it with great skepticism, wondering how it can actually benefit their companies.
At the heart of the sharing economy lies connectivity. When everything is connected, you can collaborate like never before.
Through the sharing economy, you can better link your organization with manufacturers, logistics service providers, and other partners. This larger business network enables companies to capitalize on their partners’ resources, expand their reach, innovate, and improve customer service.
Taking full advantage of a connected enterprise of companies requires putting an extended supply chain at the core of your operations. This allows you to have greater visibility into various customer, supplier, manufacturer, and other insights, ensuring you can improve decision making and respond to in-the-moment changes and demands.
Networked businesses, according to McKinsey & Company, are 50% more likely than their peers to be market leaders.
Myth #5: You simply cannot overcome resource scarcity
This blog was originally published on SCW Magazine.