The world of supply chain management is currently facing a significant challenge: an ‘80% gap’ in digital decision models, according to Gartner Inc.
While digital models have promised transformative capabilities for supply chain management, the reality is that most of the supply chain environment remains unaccounted for in these models. This incomplete view hampers the effectiveness of digital trade-off analysis, including what-if scenarios and simulations.
Suzie Petrusic, a senior director analyst at Gartner’s Supply Chain Practice, highlights this issue, stating that the “digital-to-reality gap” is impeding supply chain performance. Technology investments alone won’t bridge this gap; decision support is needed for local, cross-functional decision-makers who possess better visibility into the hidden aspects of the supply chain that remain undigitised.
Gartner’s research, based on 600 survey responses from supply chain decision-makers, discovered that current digital models for trade-off analysis haven’t significantly improved decision outcomes. In fact, slightly more bad decisions were made with the use of digital trade-off analysis compared to without it. The problem lies in the incomplete picture of the supply chain captured by these digital tools, with up to 80% of actual on-the-ground processes not reflected in current digital models.
To address this challenge, Chief Supply Chain Officers (CSCOs) have two primary strategies. One approach involves full digitalisation and process adherence to create a complete end-to-end digital model of the supply chain. The other strategy empowers localised and cross-functional decision-makers who have access to on-the-ground visibility and existing technology. These local decision-makers are more likely to make good decisions, especially when supported by digital trade-off analysis technology.
Gartner’s Suzie Petrusic recommends three key steps for improving strategic decision-making and digital return on investment:
- Localise more strategic decisions to a cross-functional level.
- Digitise the human element of local, cross-functional decision models.
- Accelerate the digitisation of end-to-end supply chain processes.
In essence, the solution involves not just relying on technology but also leveraging the expertise and visibility of local decision-makers to bridge the digital-to-reality gap in supply chain management. This approach offers a more realistic view of on-the-ground processes and a stronger basis for digital optimisation. It’s a shift towards a more balanced and effective supply chain management strategy in the digital age.
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