The digital transformation of consumer goods supply chains is being held back by legacy infrastructure, according to a recent survey from IoT start-up, Evrythng.
In a poll conducted at the Internet of Supply Chain conference held in Amsterdam in May of this year, more than half (56 percent) of the consumer product manufacturers that Evrythng spoke to identified the challenge of integrating complex legacy systems across their supply chain network as “highly significant”, the company claims.
The net result of this difficulty is that businesses increasingly struggle to bring together data from across their fragmented supply networks, meaning opportunities are missed to optimize supply chain efficiency.
Lack of maturity means lack of visibility
Of those who responded, 44 percent said that legacy infrastructure made it difficult to get timely access to data, and 39 percent suggested it led to poor visibility throughout the product’s lifecycle.
It is increased or real-time visibility that represents the most important opportunity for consumer goods companies, according to Evrythng.
Writing in a company blog post, Evrythng CEO Niall Murphy suggests that “real-time visibility is most useful for gaining valuable consumer insights,” which is backed up by respondents, who indicated that “the most important benefit of a digital supply chain is the ability to get closer connections with their customers, ranking this higher than enabling new business models, driving new revenue and cost savings, which are often enabled once a business has established closer connections with its customers.”
Yet, despite its potential, the survey revealed that “real-time visibility from the factory to the consumer” is the poorest rated of all current supply chain capabilities among consumer goods companies, scoring just 2 out of 5 on Evrythng’s scale, followed closely by “item-level provenance for everything you manufacture”, which scored just under 3 out of 5.
At present, the problem comes down to maturity. Just 6 percent of consumer goods companies describe their digital supply chain efforts as “ecosystem-connected”, while a significantly higher 39 percent say that they are at the lowest stage of maturity, with most (if any) of their digital transformation efforts taking place no higher up than the departmental level.
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Reasons for optimism
For Murphy, however, there is cause to be optimistic. He believes consumer goods companies can see the value in their digital transformation efforts. That important, he says, because “product manufacturers and brands are now competing on a global basis with digitally-native, insights-led businesses such as Amazon and Apple. Real-time data is everything, with full instrumentation of the supply chain end to end. Achieving this capability is a survival issue.”
“Siloed legacy systems are a barrier to achieving the kind of end-to-end visibility that enables companies to understand their supply chain and product lifecycles inside-out and compete at the top table.”
“Smart products and smart packaging with data management in the cloud is the game-changer,” Murphy suggests. “From shoes to jackets, champagne bottles to shaving foam canisters, physical products can now be part of interconnected ecosystems enabled by the web through active digital identities in the cloud.
It’s these “digital product identities”, which, when combined with “open standards and the ubiquity of smartphones,” will “make vital data available at all times, outside of IT systems and enterprise walls,” he concludes.
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Internet of Supply Chain is the only event bringing together Supply Chain executives representing the retailers, manufacturers and logistics operators to share best practices and inspire new revenue opportunities.
The two-day forum will offer as yet unheard case studies on how the total lifecycle of a product can be monitored in real-time and be delivered on time without any compromise in quality.
Key themes will include using IoT to improve end-to-end visibility, modernizing a legacy supply chain process and marrying manufacturing and supply chain.