DIGITAL SUPPLY CHAINS –
THE NEXT LEVEL BEYOND DEMAND DRIVEN SCM


Being essential part of Industry 4.0 the Digital Supply Chain describes the potentials of new technology such as internet of things, cyber-physical systems and cloud computing for managing the supply chain. 

It responds to the question how to design global supply chains in a world that has become more complex. 

While referring to relevant theories of complexity management as well as principles of nature, many years of practical experience in supply chain management provide the basis for developing a guiding framework. 

Many use cases illustrate the framework.


 


„The publication of Götz Wehberg provides a guiding framework for the Digital Supply Chain and thus orientation for both executives as well as scientists.“


Prof. Dr. Ulrich W. Thonemann
,
Universität zu Köln



10 THESES ABOUT DIGITAL SUPPLY CHAINS


In the following, selected statements with respect to digital supply chains are summarized. This is not to resume the book publications comprehensively, but to inspire reading and thinking about digital supply chains:

1. Digital supply chains manage complexity. It responds to mega trends and increasing complexity which require more flexible supply chains.

2.  Digital supply chains are more than CPS (cyber physical systems). They are not limited to selected technologies, however, to be understood as an integrated management concept.

3.  Digital supply chains determine efficiency. They lower transaction cost and enable flexibility within networks while realizing small batch sizes and scalable infrastructure.

4. Digital supply chains mean innovation. E.g., the internet of services provides value added for clients as well as differentiation potential against competitors.

5. Digital supply chains need a concept. A guiding framework supports decision making in terms of understanding and managing system complexity as well as closing the integration gap within the supply chain.

6.  Digital supply chains are self organization. I.e. leadership determines the rules for developing, designing and coordinating the supply chain and provides guidance through shared values.

7. Digital supply chains are based on pattern recognition, in order to anticipate complex system behavior and identify the appropriate (meta) algorithms with means of big data.

8. Digital supply chains are not only for professionals. Many companies do have the opportunity to leverage on the potential by developing towards digital supply chains, including its pre-mature stages.

9. Digital supply chains have to be specific. Both the target operating model as well as implementation roadmap have to be developed individually for a specific corporate.

10.  Digital supply chains stands right at the beginning. We will still have to do a lot of trial-and-error and develop new solutions while learning becomes a key success factor.


(Source: Wehberg 2015)


10 COMMON MISTAKES AS TO DIGITAL SUPPLY CHAINS


Sometimes it is helpful to describe what something is not rather than saying what it is. Accordingly, the ten most common mistakes are being listed as follows:

Mistake no. 1: Digital supply chains become important, but will not revolutionize our life.
Wrong, digital supply chains and its pre-stages do have the potential to design and operate value chains in a totally different way as well as to develop new business models. The Internet of things will also revolutionize logistics among others.

Mistake no. 2: Digital supply chains help to reduce complexity.
Wrong, Complexity can only be handled with complexity. The response to increasing requirements of markets and the environment (customer expectation, resource scarcity, regulation, etc.) thus is flexibility and connectivity.

Mistake no. 3: Digital supply chains mean maximum self organization.
Wrong, delegation of responsibility as well as de-centralizing of decision making do not mean that there is no space for designing and developing the system any more. It is all about the right degree of self organization and appropriate rules, accordingly.

Mistake no. 4: Digital supply chains are an efficiency rather than growth engine.
Wrong, bringing the IoS (internet of services) to logistics can offer a number of new value added services as well as business models. It provides companies with additional growth opportunities and Germany with the chance to ensure global competitiveness as a site.

Mistake no. 5: Digital supply chains mean using some cyber-physical systems.
Wrong, Digital supply chains are more than a new technology. Cyber-physical systems are a key enabler, however, digital supply chains need an integrated management concept which has to be designed and implemented individually for each corporate, including all areas of leadership.

Mistake no. 6: Digital supply chains are to forecast by using the right algorithm.
Wrong, relevant methods of statistics typically provide a broad range of algorithms for a specific problem or use case.  There is no "one-fits-all" algorithm.

Mistake no. 7: Digital supply chains have to collect as much data as possible in order to leverage.
Wrong. It is not about collecting as much data as possible, however, it is about about getting the relevant data. Relevant is what potentially can be used as underlying driver in order to determine a key performance indicator or logistics target.

Mistake no. 8: Digital supply chains need competencies in big data and CPS, but not logistics.
Wrong. Analyzing and managing complex logistics systems requires a deep logistics understanding, in addition to competencies in IT and analytics. This is because good judgment and business know how are key for making logistics 4.0 a success.

Mistake no. 9: Digital supply chains are covered sufficiently by the current Industry 4.0 initiative.
Wrong. The maturity level of supply chain management 
within industry is quite diverse. Conclusively, a lot of companies have to implement basic requirements of logistics before initiating Industry 4.0. Industry 4.0 without a proper logistics does not work.

Mistake no. 10: Digital supply chains do not belong on the CXO agenda.
Wrong. Digital supply chains are a topic for the executive team. The design of the value added system as well as business model of a company is strategic and key for success.

(Source: Wehberg 2015)


DOWNLOADS




Logistics 4.0 (foreword)

By Götz G. Wehberg
Logistics 4 0_Foreword_150915.pdf (62.69KB)
By Götz G. Wehberg
Logistics 4 0_Foreword_150915.pdf (62.69KB)


Supply Chain Start ups

Integrated Business Planning


Here is the Springer website where you can order the publication in German language:

(http://www.springer.com/us/book/9783662472095)