Emily Newton

As manufacturers seek creative and impactful ways to stay competitive, they often develop initiatives that require suppliers to become part of the digital supply chain. Although this transition takes time, it enables better visibility between all involved parties and gives manufacturing professionals information they can apply to improve proactiveness and flexibility. How can supply chain executives get started?

Use a Framework to Shape Partners’ Expectations

As supply chain leaders pursue digital strategies, they should strongly consider letting guiding principles inform their actions. One example comes from Micron Technology, one of the world’s largest semiconductor manufacturers. Since the company has approximately 48,000 employees and 11 internal production sites, the digital supply chain strengthened a sprawling business.

Micron has a vertically integrated supply chain and works with several contract manufacturers. Those partners assist the company in making thousands of individual products across its four business groups.

Executives began creating their digital supply chain in 2018, pinpointing several necessary strategies to achieve organizational goals. For example, they determined it was time to increase multi-source procurement to improve resilience. The company also invested in an enterprise supply planning platform. Moreover, improvements in Micron’s longer-term sales and operations planning enabled better alignment of supplier capabilities and customer demands.

While employees participated in an extensive training and education program to learn about the science behind demand-driven supply chains, Micron’s partners got details about how they contributed to the company’s success by making it more competitive.

For example, its framework expected Micron workers and external partners to be:

• Accountable for sustainable decisions affecting others.
• Able to align objectives across all value-chain partners.
• Adaptable to outside factors affecting the supply chain.
• Agile when making strategic business decisions.

Those foundational principles encourage partners to think about their individual digital supply chain impacts and how they could make internal changes to uphold the values. Stating them clearly — as Micron’s leadership did — gives everyone focal points and keeps them motivated on things that will drive meaningful progress.

Develop Detailed Technology Plans

Manufacturing leaders interested in moving to digital supply chains with their suppliers should develop thorough information about which technologies to use. They should also specify how soon participants must adopt them. Keeping everyone well-informed and aware of their responsibilities will help the relevant transitions go more smoothly.

As executives evaluate the possibilities, they should strongly consider opportunities allowing supply chain partners to access shared information. For example, integrated manufacturing databases collect and organize content from various sources, making it more actionable for users. Such resources can pull information from supply chain management systems, showing supplier metrics, material availability and logistical details.

One notable benefit of bringing factory data into a single repository is that all employees and partners can see the real-time impacts of their supply chain optimization efforts. Additionally, seeing what works well and which aspects need further improvement makes it easier for people to put their resources in the most effective places to cause positive changes.

All tech-driven investments should start with the involved parties defining their goals and requirements. Those specifics will clarify how partners will use the technology and whether it will necessitate making internal updates. It is also best to start small and scale up as resources allow. Establishing appropriate data-based practices is also essential to protect the information from unauthorized access and ensure its integrity as numerous parties access and use it.

Telling partners the benefits they could expect by taking part should also increase their enthusiasm. Estimates suggest supply chain digitalization efforts may cut costs by up to 50% while causing revenue boosts of 10%. Such outcomes will undoubtedly spark interest and involvement.

Set Shared Goals

Supply chain digitization allows for greater transparency and accountability, with some products allowing users to trace goods through every step of their journeys. Requiring suppliers to participate in a digital ecosystem also makes it easier for manufacturers to verify that those parties meet minimum standards.

Partners will be more willing to uphold digital supply chains when recognizing the associated overarching and mutually beneficial outcomes. For example, when manufacturers and partners practice shared accountability in a pharmaceutical supply chain, costly and potentially dangerous product recalls should become less likely — a win-win situation for everyone.

In March 2023, an EU-funded project was launched to create more robust digital supply chains between the agricultural and food sectors. The ambitious €11 million (US$1.11 million) effort involves 44 participants from 19 countries. They will collaborate on digitalization strategies to increase supply chain transparency and authenticity.

The participants’ primary goal is to create a holistic framework of digital and intelligence-based technologies to identify and mitigate fraud within the food supply chain. Although it is a three-year project, the team expects their progress will have much longer-lasting impacts.

Additionally, since everyone knows the project’s purpose, the partners can confidently apply their skills to cause the desired improvements. Once they develop working solutions, real-world testing will occur. The proposed use cases include improving the traceability of high-value cereal and dairy products in Finland, identifying potential meat manipulation cases within all parts of the German supply chain and enabling the rapid traceability of Italian virgin olive oil.

Begin Creating a Digital Supply Chain

Each digital supply chain will look slightly different depending on the companies’ needs, the number of participating partners and other variables. However, the above tips and real-life examples will help executives design and implement digital strategies that support their short and long-term goals.

About the author:

Emily Newton reports on how technology disrupts industrial sectors. She’s also the editor-in-chief of Revolutionized, covering innovations in industry, construction, and more.

Sign up

Sign up for a complimentary subscription to Digital Commerce 360 B2B News, published 4x/week. It covers technology and business trends in the growing B2B ecommerce industry. Contact Mark Brohan, senior vice president of B2B and Market Research, at [email protected]. Follow him on Twitter @markbrohan. Follow us on LinkedIn and be the first to know when we publish Digital Commerce 360 B2B News content.