Digitalisation key for quality supply chain performance

20th November 2020 By: Tasneem Bulbulia - Creamer Media Reporter

Digitalisation key for quality supply chain performance

Pieter Theron

Some companies have been able to achieve supply chain excellence through the adoption of customer-centric and autonomous supply chains using smart technologies and solutions, PwC South Africa digital operations lead Pieter Theron noted during the Manufacturing Enterprise Solutions Association’s webinar on November 20.

He said leading companies go beyond functional efficiency, towards an end-to-end orchestrated supply chain ecosystem, with data showing South African businesses are also looking for greater external collaboration.

He explained that end-to-end orchestration is autonomous, data driven and highly automated.

Moreover, external collaboration extends beyond company walls and includes both suppliers and customer networks.

Theron said internal integration would overcome functional silos within the company and contribute to cross functional collaboration.

Moreover, functional efficiency focuses on the improvement of each function and their related key performance indicators.

He acclaimed that advanced supply chain capabilities cumulate to significant qualitative and quantitative benefits.

Theron explained that, as companies achieve higher supply chain maturity, multiple benefits add up to a higher level of cost efficiency, supply chain performance and increased product and service revenue.

Therefore, those that are championing digital are focusing on optimising their assets, managing supply chain risks effectively and increasing revenue by realising new business models.

Theron posited that investments into advanced supply chain capabilities pay off and that the supply chain becomes a significant value contributor.

He noted that South African businesses could also achieve benefits in this area.

For example, he noted that digital champions had achieved considerable savings of about 6.8%, on average, on supply chain costs in the last financial year.

Theron explained that investments into the supply chain resulted in new business models, new customer channels with higher customer centricity and faster delivery capabilities. This, he said, engendered additional product and service revenues.

Theron indicated that digital champions had achieved considerably greater cost reduction relative to their overall supply chain costs in the last financial year owing to their investments.

He mentioned that compared with digital novices, the cost benefits achieved by digital champions were twice as high.

Theron noted that the average payback period of investment into supply chain capabilities was less than two years, therefore, companies would see a return on their investment relatively quickly.

Moreover, he acclaimed that investments into advanced supply chain capacities also boosted supply chain performance.