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Transforming traditional supply chains into digitalized supply chain networks

The traditional approach to supply chain is relatively simple and straightforward. Suppliers supply, producers produce, distributors distribute, retailers sell and, finally, customers utilize goods. On many occasions, this model is just fine and actually very effective. However, in our modern, digitalized world we must take a different approach and widen our vision.

The change

As we speak, things are getting more complex. The producers are not only building physical items but also providing services, enabling lifecycle support and providing various digital solutions for their customer base. Simultaneously, machines are becoming more intelligent and aware of their own conditions. They may even order spare parts and services autonomously. This leads to a more complex supply chain and a situation where value streams must be reconsidered from both business model and system points of view.

In these circumstances, we need to change our approach to supply chain. The keyword is network. We should approach it as one, plus take into account the complexity it brings. The traditional core will surely be there in the future and PLM & ERP systems are the foundation for a well-functioning supply chain network. However, the need for additional tools and supporting systems is real, in order to handle the multidimensional environment. The good news is that a big part of the necessary actions can be automated using i.e. RPA and emerging technologies. For example AI and digital twins are already providing new opportunities, and even more so in the future.

Stakeholders and value streams

A more complex network also means more complexity in value streams and stakeholders. Part of the success factors in Supply Chain Digitalization are comprehensive Stakeholder and Value Stream analysis. This means that instead of a single step-by-step analysis, we must carry out analysis on all levels and in all phases, taking into account all counterparts and their interests all the way from the factory floor to top management.

I have personally spent my 20+ years career within the Finnish manufacturing industry working on these value streams and stakeholders. My colleagues here at Midagon also possess strong knowledge of this area, and we are here to support you on the way.

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