Digital transformation is one topic that is dominating our industry—and rightfully so, considering the significant competitive advantages and opportunities it brings to global supply chains. It’s rare to come across an industry article or conference that doesn’t reference how supply chains are being disrupted, automated, and optimized through digitalization. We recently participated in two conferences that both focused on this topic: Transparency 18, a freight visibility summit hosted by FreightWaves, and the Gartner Supply Chain Executive Conference—Move to Mastery: Innovate, Disrupt, and Scale the Digital Supply Chain.
At both of these events, we had the opportunity to share a case study on our work with Microsoft to transform their global supply chain and improve predictability and customer experience through our supply chain visibility platform, Navisphere Vision.
You can watch a full demo of this technology below. But first, what’s behind this industry-wide transformation? We see three mega trends that are driving both growth and interest in the industry.
- Customer Experience
One big reason that companies are so focused in this area is that a poor customer experience can easily end up as a high-profile media story or full-blown organizational crisis. Whether it’s unprotected data or late deliveries, poor customer service can have devastating effects on your bottom line.
According to CMO Council and SAP research, 47% of customers will leave a brand over a poor customer experience. That’s a very powerful finding: you could potentially lose half of your business if you don’t focus on customer experience. In addition, your prospective customers are looking at this information as they evaluate your company. Today’s customers have increased access to information that makes competition tougher, so positive customer experience can act as a powerful differentiator.
- Supply Chain Complexity
One of the main drivers behind increased supply chain complexity is that the line between manufacturing and retail is blurring. Today, we see both manufacturers and retailers making it easier for customers to order products and have them delivered directly to their homes. Research from Gartner tells us that by 2020, 50% of all manufacturing supply chains will have the ability to enable direct-to-consumer shipments.
The push to go direct-to-consumer is having a major global impact. In fact, according to Statistica’s research, ecommerce sales are expected to increase 246% by 2021, to $4.5 trillion.
So why does this matter? All of this creates increased supply chain complexity through localized inventory variety, location complexity, legal and regulatory concerns, longer and shorter shipping distances, more modes, and tighter windows for on-time delivery.
- Digital Transformation
Our definition of the digital transformation is not specific to certain IT projects. Rather, we see it as a series of projects and technologies that transform the supply chain end to end. When done correctly, it is about strategy, and then plugging in technology to support that predefined business strategy. Given our definition and focus on improving customer experience, when we are working with shippers on digital transformation, we are typically pairing the following technologies with cloud based platforms:
- Predictive analytics and machine learning
- Advanced analytics
- API connectivity
Case Study: Microsoft’s Digital Transformation
The beginning of Microsoft’s supply chain transformation has pain points that many global shippers can relate to. They had multiple, regionally-focused TMS systems, all with their own associated—and at times, contradictory—processes. This led to disparate, poor quality of data and a lack of visibility to disruptions.
Now, with a single, global TMS and cloud-based visibility, the Microsoft team gained real time metrics and KPIs with data that can be ingested live through machine learning models to predict potential impacts and disruptions. Their customer-centric supply chain is now supported through proactive disruption monitoring with push notifications, real-time visibility in all modes and regions, performance metrics, and on-demand reverse logistics capabilities.
Today, Microsoft has moved beyond a digital transformation into what the team calls supply chain “orchestration,” where all of their systems and modules operate in unison.
See for yourself how Microsoft uses Navisphere Vision to see more, know more, and do more with their global supply chain.