The Digital Transformation of Supply Chain Management

While what supply chain managers had learnt during the coronavirus pandemic was becoming the ‘new normal’ and we were moving toward a humanitarian and economic crisis, a new mindset had emerged. Global supply chains had been strained, which made it urgent for policies that would lessen disruptions and intensify resilience. In the economic literature, new expressions have been used more and more frequently, such as reshoring vs. onshoring, inshoring vs. outsourcing, resilience vs. robustness, preparing for ‘just-in-case’ vs. ‘just-in-time’ delivery, and new words such as deglobalization have appeared. Companies have had to rethink most of their businesses and to develop new competencies. Old rules are not completely obsolete, but used on their own they are inappropriate for surviving and prospering in a fast-changing environment.The purpose of this book is to review the foundation of SCM and discuss how it can deal with the recent waves of change by using digital technologies for more efficiency, profitability, and resilience. The book providesan understanding of the breathtaking shift in traditional industries and the resulting significant implications for SCM. The basic message is that the new social and economic environment requires a totally new strategic management mindset. Front Cover THE DIGITAL TRANSFORMATION OF SUPPLY CHAIN MANAGEMENT THE DIGITAL TRANSFORMATION OF SUPPLY CHAIN MANAGEMENT Copyright Contents Introduction Why this book now What this book is about? Key definitions and events The structure of the book References ONE - Drivers and effects of digital transformation on the supply chain one - Toward a new way of thinking 1.1 Platforms and network effects 1.1.1 Definition of platform 1.1.2 What is the network effect? 1.1.3 How platforms change competition 1.2 The evolution of digital transformation 1.2.1 A three-stage process 1.2.2 The four tiers of digital transformation 1.2.3 Drivers of digital value 1.3 Digital transformation is an everlasting changing strategy 1.3.1 Five domains of strategy 1.3.2 How Netflix's original DVD service defeated the leading position of blockbuster 1.3.3 Less complex, less costly, less time wasting than first imagined 1.3.4 Defenses against threats. Adjusting to the new reality 1.3.5 Success factors in digital transformation 1.4 The definition of “supply chain” 1.4.1 The drive toward shorter supply chains 1.5 Supply Chain Management 1.5.1 The evolution of SCM 1.5.2 SCM on a global scale 1.5.3 The bullwhip effect 1.5.4 Giving efficiency and flexibility to the supply chain References TWO - Digital technology solutions for managing the supply chain Two - A long road to maximizing efficiency 2.1 The Digital Supply Network (DSN) 2.2 A digital thread 2.3 The rise of industry 4.0 and the DSN 2.4 Impacts of technology disruption 2.5 The DSN capabilities 2.6 Industry 4.0 or The Fourth Industrial Revolution 2.6.1 A radical shift 2.7 Industry 4.0 technologies: the main categorizations in the literature 2.8 Progress made possible by Industry 4.0 2.8.1 What is blockchain? How does it help the supply chain? 2.8.2 Governance, quality, and transparency 2.9 The road ahead 2.10 Industry 4.0 technologies during the COVID-19 pandemic crisis References Three - Supply chain 4.0. rewriting the rules 3.1 Enabling technologies 3.2 Supply chain 4.0 and market-driven strategies 3.3 How the supply chain has been transformed 3.4 Key benefits of supply chain 4.0 3.5 Toward Smart manufacturing and Smart factory 3.5.1 Smart factory References Four - The need for a different approach 4.1 Transportation evolution 4.2 Warehouse transformation 4.3 Warehouse robotics 4.4 Logistics 4.5 Procurement 4.0 4.6 The sourcing process 4.6.1 Outsourcing 4.6.2 Reshoring 4.7 The purchasing process 4.8 Toward a new model of procurement References Five - Managing the supply chain: technologies for digitalization solutions 5.1 The irresistible march of technological disruption 5.1.1 The role of risk and uncertainty 5.2 Digital technologies are reshaping supply chains 5.3 Cloud computing 5.4 Big Data 5.5 Internet of Things (IoT) 5.5.1 The Internet of Things: potential areas of use 5.5.2 Internet of Services 5.5.3 Definitions and salient features of the Internet of Things 5.6 Blockchain 5.6.1 Cryptocurrencies and Bitcoin 5.6.2 Definitions and salient features of Blockchain 5.7 Robotics 5.8 Additive Manufacturing and 3D printing 5.9 Autonomous Vehicles (AV) and Intelligent Transport Systems (ITS) 5.10 Artificial Intelligence (AI) 5.10.1 The bases of Artificial Intelligence 5.10.2 The Turing Test: the imitation game 5.10.3 Definitions and salient features of Artificial Intelligence 5.10.4 Machine Learning (ML) and Deep Learning (DL) 5.11 Co-creation 5.11.1 Power to customers in designing a product 5.12 Digital Value Chain (DVC) References THREE - Global supply chain and global strategies Six - Waves of disruption have undermined but not defeated globalization 6.1 The first waves of globalization: 1980's and 1990's 6.1.1 The tide of changes 6.1.2 New and old reinforced drivers 6.1.3 New economic models 6.1.4 The doctrine of ‘comparative advantage' revisited 6.1.5 Win-win or lose-win? 6.2 Offshoring has become a vital part of global strategies 6.2.1 The need for a constant review of core competences 6.3 The great variety of models 6.3.1 Types of the outsourcing agreement 6.3.2 Asymmetry of power in the global supply chain 6.4 ‘Old' providers emerging as new competitors 6.4.1 Performance evolution 6.4.2 The advantages of the ‘new champions' 6.5 The main technological disruptors 6.5.1 The experience in car industry 6.5.1.1 The shift of the center of gravity 6.5.1.2 Need to change the business model 6.5.1.3 Inroads from unexpected competitors 6.5.1.4 Product modularity has big implications 6.5.1.5 Modularity gives suppliers a great advantage 6.5.1.6 The embattled uncertainty: where is the tipping point? 6.6 Managing a supply chain under uncertainty 6.6.1 Identifying risks and estimating the probability that an event takes place 6.6.1.1 Flexibility needed for fast times 6.6.1.2 Industries' fear of disruption 6.7 Has COVID-19 and Russia's invasion of Ukraine brought down globalization? 6.8 Russia's invasion: a tipping point in globalization References FOUR - The Effects on the Supply Chains of COVID-19 and the Russia's Invasion of Ukraine Seven - Never so much attention to the digital transformation of supply chains 7.1 Unexpected speed 7.2 COVID-19 rolls the dice again 7.2.1 The supply-demand mismatch 7.2.2 The disruptive influence of governments 7.3 Unprecedented in history 7.4 Running out of steam 7.4.1 Factory closures 7.4.2 Bottlenecks 7.4.3 Shortages 7.4.4 The increase in shipping costs References Eight - War in Europe: another blow to the global supply chains 8.1 Russia's invasion of Ukraine: another blow to the global supply chains 8.2 Lessons for business leaders 8.3 How to respond to war disruptions 8.4 Take a step back to go further on global supply chain rebound References FIVE - How businesses reacted to disruptions of supply chains Nine - Business models at a crossroads: the post-crisis cleanup 9.1 The risks of supply chain disruptions 9.1.1 Identify the vulnerability 9.2 Be more ‘resilient’ 9.2.1 “It's quicker to build inventories than factories” 9.2.2 Reshore or onshore. Back to the country of final assembly 9.2.3 Diversification of supply bases 9.2.4 A new business model 9.2.5 Beyond traditional business intelligence. The need to accelerate technological innovation 9.2.6 Rethinking the trade-off between product variety and the capacity for flexible production 9.3 Refitting the business 9.3.1 ‘Resilience’ versus ‘robustness’ 9.3.2 Types of ‘resilience’ 9.3.3 Three steps to prevent supply chain disruption 9.3.4 The case of the pharma industry 9.3.5 ‘Just in time’ versus ‘just in case’ 9.3.6 Why do disasters often find MNCs unprepared? References Index A B C D E F G H I J L M N O P R S T V W Back Cover The Digital Transformation of Supply Chain Management offers a roadmap to all areas of supply chain management, with the idea of ecosystem as a center of gravity. The book describes the impact of Internet-driven global information and communication systems in enhancing supply chain management processes. It analyzes six building blocks of supply chain management, including consumer focus and demand, resource and capacity management, procurement and purchasing, inventory management, operation management, and distribution management. The book concludes by presenting the principal innovative solutions available now, or in the future, for managing and increasing the efficiency of supply chains. As supply chains are evolving toward an ecosystem that incorporates a wide range of digital technologies such as the cloud, big data, the Industrial Internet of Services, 3D printing, augmented and virtual reality, blockchain, artificial intelligence, machine learning, and many more, this book is an ideal resource. Provides balanced, state-of-the-art coverage on emerging technological innovations and their applications Includes numerous case studies that offer different perspectives on the integration of technologies in the supply chain Describes the impact of Internet-driven global information and communication systems in enhancing supply chain management processes The Digital Supply Chain is a thorough investigation of the underpinning technologies, systems, platforms and models that enable the design, management, and control of digitally connected supply chains. The book examines the origin, emergence and building blocks of the Digital Supply Chain, showing how and where the virtual and physical supply chain worlds interact. It reviews the enabling technologies that underpin digitally controlled supply chains and examines how the discipline of supply chain management is affected by enhanced digital connectivity, discussing purchasing and procurement, supply chain traceability, performance management, and supply chain cyber security. The book provides a rich set of cases on current digital practices and challenges across a range of industrial and business sectors including the retail, textiles and clothing, the automotive industry, food, shipping and international logistics, and SMEs. It concludes with research frontiers, discussing network science for supply chain analysis, challenges in Blockchain applications and in digital supply chain surveillance, as well as the need to re-conceptualize supply chain strategies for digitally transformed supply chains