Companies want to digitize their logistics chains … but they can not do it. This is the conclusion of a Capgemini study.
According to the ESN, half of the organizations surveyed consider the digitization of supply chain management as a priority, but “only 14% of them have managed to implement at least one of these initiatives at several sites or at the same time. ‘company wide “.
For this study, the Capgemini Research Institute surveyed logistics managers from 1001 companies on their current projects in the consumer goods, retail and manufacturing sectors.
A strong ROI
Concretely, the digitization of the Supply Chain passes, most often, by the RPA (Robotic Process Automation) and the Internet of Things ( IoT ). “RPA and IoT often come back in use cases like order processing, smart sensors to monitor product packaging , as well as updating and maintaining connected products,” says ESN. .
On average, companies would have about thirty projects to digitize their Supply Chains – whether in the design phase, PoC or pilot.
This high number is due to their high potential ROIs – an average of 18% (compared to an estimated ROI of 15% for HR projects or 13% for the digitization of customer services). Their depreciation would be done in one year.
The most cited benefit is, unsurprisingly, lower costs (at 77%).
But this high number of ongoing projects, internally, would also be paradoxically one of the reasons for the high rate of failure of their achievements.
“It seems that companies tend to disperse too much, without focusing enough on strategic priorities,” says Capgemini. “Organizations that have successfully digitized their large-scale supply chain managed an average of 6 proof-of-concept projects, compared to 11 projects that failed.”
Another differentiating point, these virtuous companies had a clearly defined procedure to evaluate the success of their drivers (at 87%) and precise criteria to rank them in order of investment priority (at 75%).
Companies that are dispersing
This finding, detailed in the study , leads the ESN to formulate some advice.
“Most large companies have understood the importance of supply chain digitization, but few have put in place the mechanisms and procedures necessary to make it a reality,” said Dharmendra Patwardhan, in charge of the practice. Digital Supply Chain of Capgemini’s Business Services activities. “They are running too many projects at the same time, [without] adopting the kind of targeted, long-term approach that has made the market leaders successful in this field.”
Common elements of success
Capgemini notes that successful projects share three common points.
The first is that the project has been supported by leaders at the highest level. “[They] need to promote this transformation and give strategic direction to setting goals and priorities [as this is a complex process that involves planning, purchasing, IT and HR . It can not be controlled by a single division.
The ESN also recommends not focusing on the sole objective of reducing costs but instilling greater ambition (for example increasing customer satisfaction or more transparent product traceability).
Secondly, these projects have involved actors upstream and downstream of the chain – suppliers, distributors and logistics providers – and are not confined to the walls of the company.
Thirdly, these projects are designed for the long term. They perpetuate know-how with the implementation of “strategies to attract, retain and train employees” and thus constitute a “pool of talent for its maintenance”.
It should be noted that of the nine countries surveyed, France ranks last in the priority given by its companies to digital transformation projects in the logistics chain.