The path to a digitally integrated supply chain

Transformation into a digital supply chain

Digi­ta­li­za­ti­on is taking place in all busi­ness are­as. The sup­ply chain can also ful­fill its tasks bet­ter, more effi­ci­ent­ly and fas­ter using digi­tal app­li­ca­ti­ons and pro­ces­ses. h&z uses its expe­ri­ence from nume­rous pro­jects to pro­vi­de sup­port during the trans­for­ma­ti­on.

Accord­ing to a recent stu­dy, more than one third of all Ger­man com­pa­nies con­si­der them­sel­ves to be lag­ging behind in digi­ta­li­za­ti­on. But is the situa­ti­on in Ger­ma­ny real­ly that dra­ma­tic? Read here how we worked with a custo­mer to imple­ment an AI-sup­por­ted digi­tal sup­ply chain.

Shorter deli­very times with intel­li­gent logistics

Busi­ness was boo­m­ing at a pro­spe­ring mecha­ni­cal engi­nee­ring com­pa­ny, the order books were full; but the board also wan­ted to ensu­re suc­cess for the future and deci­ded to reor­ga­ni­ze their sup­ply chain manage­ment to make it future-pro­of. While the focus in the past has been on opti­mi­zing sup­ply chain ele­ments such as con­ti­nuous impro­ve­ment and auto­ma­ti­on of order-ori­en­ted tran­sac­tion pro­ces­ses, in the future the ent­i­re sup­ply chain was sup­po­sed to be mana­ged in an inte­gra­ted and custo­mer-ori­en­ted man­ner.

The pro­ject team defi­ned the objec­tive: The pro­ject should redu­ce the lead time to the custo­mer from mon­ths to a few weeks, while at the same time increa­se the abi­li­ty to deli­ver – without addi­tio­nal costs.

Sup­ply Chain Manage­ment with custo­mer inter­faces

The goal was to find a digi­tal­ly inte­gra­ted SCM approach that would com­ple­te­ly rede­fi­ne sup­ply chain con­trol. In the future, the sup­ply chain should be in a posi­ti­on to eva­lua­te and deci­de rapidly chan­ging ope­ra­tio­nal topics based on sce­n­a­ri­os and with the sup­port of AI.

The requi­re­ments were high: The new SCM tool was to access all rele­vant data of the com­pa­ny, from per­son­nel deploy­ment plans to sup­plier data and pro­duc­tion costs – sup­por­ted by data about effects and costs, in order to map valid sce­n­a­ri­os for deci­si­on making using arti­fi­ci­al intel­li­gence.

Addi­tio­nal­ly, a con­nec­tion to the sup­ply chains of the custo­mers was desi­red. A user-fri­end­ly, cross-inter­face con­trol of all data and para­me­ters and the custo­mer-spe­ci­fic opti­mi­zed design on the basis of data ana­ly­tics was expec­ted.

Digi­ta­li­za­ti­on of the sup­ply chain – test with live data

In view of the many inter­nal and exter­nal inter­faces and the hete­ro­gen­ei­ty of the exis­ting app­li­ca­ti­on land­s­cape, some pro­ject par­ti­ci­pants were initi­al­ly skep­ti­cal.

The core of the digi­tal trans­for­ma­ti­on was to sketch the goal first in a manu­al pro­cess and to show dif­fe­rent sce­n­a­ri­os. The expe­ri­ence gai­ned in the pro­cess hel­ped the team to spe­ci­fy the requi­re­ments for the soft­ware solu­ti­on more pre­cise­ly.

The new sup­ply chain manage­ment approach had to ful­fil three main aspects:

1. 1. Speed – to make fas­ter and more rea­listic deci­si­ons in the sup­ply chain
   2. Sce­n­a­rio Simu­la­ti­on – sup­por­ted by AI as a basis for deci­si­on making
   3. Buy-in – to the digi­tal approach, becau­se AI-sup­por­ted deci­si­ons only find the necessa­ry accep­tan­ce if tho­se invol­ved are con­vin­ced

Demo chal­len­ge with live data

The requi­re­ments for the digi­tal SCM solu­ti­on were spe­ci­fied on the basis of the preli­mi­na­ry work, and four pro­vi­ders were invi­ted to demo chal­len­ges with live data. Using ope­ra­tio­nal ques­ti­ons, we were able to iden­ti­fy which con­cre­te solu­ti­ons the indi­vi­du­al pro­vi­ders offer for the cor­re­spon­ding requi­re­ments.

The digi­tal­ly inte­gra­ted sup­ply chain emer­ges

The trans­pa­r­en­cy and deci­si­on-making relia­bi­li­ty gai­ned in the sup­ply chain have yiel­ded the desi­red suc­cess. With the new SCM con­cept of digi­tal solu­ti­on and trans­for­ma­ti­on, the com­pa­ny will make bet­ter qua­li­ty deci­si­ons much fas­ter and more effi­ci­ent­ly in the future.

The pro­ject has con­fir­med that mere digi­ta­li­za­ti­on of the sup­ply chain is not enough. Even if many are­as are alre­ady digi­ti­zed and auto­ma­ted, inte­gra­ted busi­ness ana­ly­tics solu­ti­ons gene­ra­te a clear value add. In com­bi­na­ti­on with the right trans­for­ma­ti­on approach, they allow for cross-func­tio­nal net­wor­king of dis­pa­ra­te units and make it pos­si­ble to cope with the enor­mous data volu­mes of the digi­tal „eco-sys­tem“.