Why Supply Chain Synchronization is Key to a Digital Future
Sourcing Journal publishes an article with Mark Burstein for their Thought Leadership Technology series.
Digital supply chains are one of the hottest topics for supply chain executives right now, and with good reason. According to a recent McKinsey report on apparel sourcing, “more than two-thirds of sourcing executives expect to have digital portals up and running to foster transparency and collaboration both with external suppliers and internal colleagues.” The report notes that companies expect digitization to help them reduce lead times by two to eight weeks, with a cost reduction of at least 2.5%.
But how do you turn the promise of digital supply chains into reality? To realize the benefits touted above, companies must be able to continually rebalance supply and demand to react with speed and agility to constantly changing demand signals. They must also improve supply chain execution in order to optimize sales, profit and inventory positions.
Barriers to supply chain digitization
There are barriers to getting there with today’s analog supply chains. The critical stages of the supply chain–planning, product development, sourcing, assortment, production, distribution and replenishment–all too often act as separate business units. Information is disconnected, siloed, and slow-moving; it typically stays within the department and doesn’t readily flow over to other areas of the business. There are significant time lags as information is handed off, and the amount of data is overwhelming and ever-changing, which limits a company’s ability to make critical, timely decisions.
As a result, companies struggle to keep supply and demand in alignment. The results include overstocks, which lead to bloated inventory and profit-eating markdowns, and out-of-stocks, which result in missed sales and customer attrition.
There is a better way, however, and that’s where the concept of supply chain synchronization comes in.
Synchronization is the key
To deliver on the benefits of digital supply chains, companies must synchronize every aspect of supply chain optimization, planning and execution throughout their supply chain network–bringing together previously disparate disciplines, departments, vendors and technologies into a single ecosystem that ties everyone and everything together. Information and departments that were previously siloed and disconnected become part of a synchronized digital supply chain, where all activities are orchestrated, information flows freely, and companies can easily adjust to changing demand signals.
A synchronized supply chain has four distinct capabilities that can help drive increased sales and profits. Read more here>>