Some business leaders think that creating a digital supply chain means automating a single task, such as forecasting demand or optimizing the production schedule. At BCG, we know that supply chain digitization requires a holistic transformation mindset.
We know that digital solutions in supply chain management perform best—and unlock the greatest value—when they’re integrated across the entire enterprise, when they involve both processes and people. This change management approach doesn’t just position companies to be more agile, reliable, and efficient; it also delivers higher margins and lower costs.
BCG’s digital supply chain consultants develop strategies and high-tech digital solutions for our clients, leveraging our deep expertise in digital supply chains and our hands-on digital experience in Industry 4.0 and other technologies. To maximize the value of their supply chains, leading companies adopt a bionic operating model, which intertwines the best of both man and machine—combining human know-how with the power of AI—to generate substantial improvements.
Armed with a bionic supply chain approach, leaders gain the guidance they need to capture real-time, end-to-end visibility over the supply chain. The combination of enhanced technologies for decision making (such as big data, advanced analytics, and AI) and human creativity and collaboration enables them to deploy advanced supply chain solutions and optimize operations.
AI in Forecasting and Scenario Planning. At BCG, our digital supply chain consultants enable our clients to achieve AI-powered planning. We position our clients to use AI to forecast demand, plan operations, and make volume allocation decisions across assets. These scenarios allow a company to build rigorous models—rather than relying on general guidelines—to optimize assets, such as maintenance plans and inventory buildups.
Cross-Functional Agile Team. When it comes to digital supply chain consulting, BCG believes that people are key enablers of any digital transformation. So, while developing digital supply chain solutions, we enable cross-functional collaboration within our clients’ teams and work with an agile mindset. This agility enables us to move faster, break down silos, deploy pilots and solutions quickly, and create value rapidly. It also enables us to focus the entire team on a single goal, such as optimized customer service—and to align all employees around standardized KPIs.
Control Towers. As supply chains become ever more complex and critical, visibility into their real-time operations emerges as a major competitive advantage. To manage their risks, sophisticated companies use a supply chain control tower, quickly shifting gears and priorities as conditions warrant.
We help our clients develop and deploy supply chain control tower solutions that provide a centralized view of their business’s operational status from end to end—allowing for quick diagnosis and prompt resolution of daily issues. And because a tower sends alerts in real time, it enables maximum transparency.
Digital Twins. Another core solution in digital supply chain transformation is the creation of a virtual replica of a complex supply chain system: a digital twin of a company’s entire supply chain.
Using advanced analytics and AI, a digital twin simulates supply chain performance. This model replicates all assets and interconnections, including those in production and supply, finishing and warehousing, and logistics. As a result, it pinpoints where volatility, uncertainty, and risk exist, as well as where optimization is possible. A digital twin can help reduce idle time by as much as 80% and delivery delays by 30%.
Clients collaborating with BCG’s supply chain digitization experts on digital twins have realized, for example, a 5% reduction in sustainable inventory, a 10% reduction in capital expenditures, and EBITDA growth of 1 to 3 percentage points.
Inside the Bionic Supply Chain
BCG’s Stefan Gstettner compares the “Bionic Supply Chain” – humans and machines using advanced technologies to collaborate far more effectively – with traditional supply chain approaches, in this excerpt from an interview with LokadTV. See the full episode here: The Bionic Supply Chain.
Digital Supply Chain Transformation
BCG's Pepe Rodriguez on our approach to digital supply chain transformations and the four aspects that we like to consider.
Digital Supply Chain of the Future
BCG's Rajesh Shetty explores three pillars necessary to build a digital supply chain of the future: acknowledge challenges; invest upfront; and lead with clear, unified vision.
We engage our clients in a thorough and comprehensive digitization process:
Deploying artificial intelligence at scale and digitizing supply chains aren't easy tasks. But pharmaceutical giant GlaxoSmithKline surmounted the challenges. How? It executed a disciplined data-and-analytics transformation program that unlocked maximum value--fast.
Our experts improved agility and efficiency with the use of advanced modeling and AI technology.
Creating End-to-End Visibility Through Predictive Analytics. BCG helped a European steel producer focus its production decisions on optimizing margins by building a data management infrastructure and developing advanced forecasting algorithms.
Improving a Network Through Linear Optimization. A global confectionary company turned to BCG to optimize its production and distribution network. Using advanced linear optimization algorithms, BCG assessed the situation and delivered a new digital supply chain strategy.
Using Demand Sensing and Machine Learning to Improve Forecasting. A global fashion retailer asked BCG to make its forecasts more accurate. BCG did so using advanced algorithms, based on demand sensing and machine learning.
Improving Planning and Scheduling. Using linear optimization and machine learning, BCG developed advanced algorithms that helped a European airline optimize its gate and crew schedules, thus minimizing the impact of disruptions.
Delivering End-to-End Visibility for Cost Modeling. A top ten biopharma company hired BCG to help it make smarter decisions about its digital supply chain management. To this end, BCG created an end-to-end visibility control tower and cost models that integrate operational and financial data. As a result, the client gained granular visibility about its end-to-end SKU-level costs and was able to prioritize areas and initiatives for optimization.
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