Part 2 in a 3-part series on “A Digital Supply Chain for a Digital Economy”
In my previous blog, we dove into the emerging technologies that support the digital supply chain at the core of the intelligent enterprise. These technologies – Internet of Things (IoT), analytics, machine learning, blockchain, and others – hold tremendous benefits for organizations that deploy them.
One of these benefits is better customer outcomes. But how do customers benefit from the digital supply chain? Let’s take a look.
Your coffee is always ready
Imagine a world in which you’re connected to a wide range of digital supply chains – all converging to meet your needs and make life better and easier. In the morning, you wake up to a hot cup of coffee, freshly brewed by your smart coffee machine. No big deal? True, you’ve been able auto-brew for years – but this coffee machine also makes sure you never run out of coffee beans.
Your smart coffee machine is connected to the Internet of Things (IoT) by sensors that detect the number of beans you’ve used. When your supply is running low, these sensors trigger a replenishment cycle and fresh beans are delivered to your door, thanks to the digital supply chain. These sensors also report on the operational health of the machine. If potential problems are detected, a notification is sent to service the machine before it breaks down so that you always get your morning coffee. It’s a true example of connected products.
Your coffee beans are fair-trade
You’re a socially conscious consumer – so let’s say you’ve committed to buying fair-trade coffee beans whenever possible. The beans that are delivered may be labeled fair-trade, but how can you be sure? With blockchain technology, your supplier can use a fraud-proof distributed ledger that all parties agree on to determine the provenance of your beans. This ledger also tracks and traces each and every hand-off, from source to delivery. When the beans arrive at your doorstep, they have a digital supply chain behind them that instills confidence and trust. This same digital supply chain can also ensure that your coffee is safe to drink and there is no contamination.
Your breakfast is nutritious
On your way to work, you often stop at your favorite restaurant for a nutritious breakfast. Now, an app on your phone enhances your customer experience by tracking your purchases and eating habits. It also links to your exercise and activity data to help you make more health-conscious meal decisions. Stored in the cloud, your activity data is depicted in a visually intuitive dashboard that shows the status of your health and fitness goals.
Suppose your goal is to lose five pounds this month. You choose to participate in a health program where your favorite restaurant analyzes this activity data and serves you a low-calorie breakfast designed to help you meet your goal. If you opt in, the app connects to facial recognition software that uses machine learning to distinguish you from other visitors and identify you as a program participant. All you need to do is walk into the restaurant and pick up a breakfast customized to your needs and goals. Because the app also tracks rewards accrued through loyalty points, your breakfast also happens to be free of charge.
Your shoes are delivered on time
To help meet your fitness goals, every day at lunchtime you go for a run. The running shoes you use are part of the growing category of “wearables” – IoT-connected apparel that connects customers to companies and communities. On yesterday’s run, you tore a seam on the upper. The shoe’s sensor alerted the seller, who sent you an inquiry: Should we send a new pair?
With Big Data analysis of trends and an understanding of the popularity of your shoes, the shoe seller was able to “forward position” your shoes at a local distribution center for fast last-mile delivery. But to ensure on-time delivery in your densely populated city, the seller also needs to overcome hurdles such as heavy traffic. So instead of arriving by truck, your shoes arrive by drone, well before your lunchtime run.
Your dinner is ready to cook
Back at home for the evening, you prepare a nutritious made-to-cook meal delivered by a meal service. This service provides food that helps you meet your weight-loss and fitness goals. And your meal – which comes with all the ingredients pre-measured and prepared – only takes 15 minutes to prepare.
The food service comes with an app that allows you to order the foods you enjoy. It also gives you social media access to a community of like-minded, health-conscious people who share tips and suggest recipes. The service provider monitors conversations and can make suggestions, thus reflecting the preferences of its customers in the product it delivers.
Cost, convenience, and choice
The digital supply chain has the power to positively impact customers everywhere. This is not only aspirational but in many cases already operational. Customers benefit from the three C’s: cost, convenience, and choice.
Costs, in many cases, are going down – which makes many conveniences possible – such as fast last-mile delivery and increased personalization. Many clothiers today, for example, can make a custom suit for about the same cost of an off-the-rack suit. And this, in the end, is the ultimate choice.
When it comes to manufacturing, many organizations find it cheaper to embed IoT tags into the products they produce. Always knowing where everything is, understanding how it’s performing, and using analytics to make better decisions that deliver better customer experiences – this is the kind of value that customers in the digital economy demand.
For more information on how analytics can unleash the business value of the digital supply chain, read the new IDC Analyst Connection paper with Simon Ellis, program VP of IDC Manufacturing Insights.