“A need for increased profitability in a low growth domestic economy and increased global uncertainty are pushing chief procurement officers (CPO) to add more value to their organisations,” says Karoly Kramli, associate director, Digital Architecture Technology at Deloitte South Africa.
Defensive strategies being implemented by CPOs are demanding rapid, sustained cost reduction, digital technology in parallel to a greater focus on risk from procurement. Traditional procurement operating models are therefore changing, driven by a lack of talent and an increase in digital innovation with focus on the waves of digital innovation in financial services. CPOs are becoming more reliant on implementing supply chains that are connected, intelligent, scalable, and nimble supply networks which require conversion between the physical and digital worlds.
Deloitte’s annual Chief Procurement Officer Survey released in April showed how South Africa’s political instability and economic uncertainty required a new work stream to alleviate systemic pressures in driving cost containment and employing predictive analytics.
Kramli believes that dramatic advances in computing memory and processing are spurring entrepreneurs and businesses to develop innovative new digital technologies and capabilities. The Digital Supply Networks (DSN) is one strategy that offers services to companies and business leaders looking to capitalise on this opportunity and create competitive advantage.
“Adding an efficient model, in this case, DSN, has been paramount to increasing customer and consumer requirements and preferences for industry stakeholders, in so far as, Deloitte’s alliance with General Electric (GE) and Singularity University, we are helping business leaders prepare for what’s coming next – the drive to digital industrial transformation,” Kramli adds.
How DSN aids development
Kramli says that, “the most forward-thinking perspectives on the future of supply chain, including artificial intelligence, advanced robotics, additive manufacturing, and the Internet of Things (IoT) relies on business leaders who can build and reconfigure digital supply networks as competitive differentiators.”
He points to a recent Deloitte survey, which compared the traditional supply model, that showcases how traditional supply nodes are collapsing into a set of dynamic networks, allowing dramatically increased differentiation. The industry lends itself to a “digital thread” - signals and data from the physical world to create a digital record. Exchange and enrich information using artificial intelligence, and machine learning to drive meaningful insights that is created for companies employing automation to economically tackle a variety of finance needs, an increasing number of which can be handled by automated processes.
These include areas of disruption that will affect key implications for businesses. Namely, cyber security risk, new work forces, reliance on ecosystem of supply chain and technology partners as powerful competitive inhibitors adding value across the entire enterprise.
The other category is affiliated to digital immersion in how DSN can, “help reduce costs and improve asset efficiency, enabling growth in new markets, help capture new audiences, and create a focus on ‘smart products’ that are connected and always-on”, Kramli states.
Kramli advises senior executives, including CEOs, CIOs, and supply chain leaders, that identifying and realising new supply network opportunities while managing their inherent complexities requires adaptability to changing landscapes. “Those considering implementing advancing technologies need to invest time and effort in understanding how DSN can create enterprise value and increased revenue in shortened time frame.”