Embracing Digital Supply Chain Tools

EACT Breakout Session

This session emphasised the importance of digitalisation, and the need to overcome any fears of adopting new technologies. It was stated that the primary objective of implementing technologies in this context is to enhance efficiency, optimise supply chains, and expedite cash conversion cycles. Practical case studies were used to demonstrate the value of a gradual approach to digitalisation.

In seeking to counter the fear of digitalisation, the speakers explained that while there have been some unsuccessful industry initiatives, often based on isolating ‘digital islands’, there are also numerous success stories from which inspiration may be drawn.

The primary session focus was on the benefits of digitalising supply chains, explaining the potential for improved operational efficiency and stronger supplier relationships. But it also addressed the challenges and barriers, including legal and regulatory complexities. Here, it was stressed that governments and organisations such as the International Chamber of Commerce (ICC) are actively working towards removing these hurdles. The ICC, it was said, is able to help resolve specific issues preventing digitalisation when brought to its attention.

Among the case studies presented during the session, it was revealed that a large retailer, executing a high volume of transactions with Bangladesh, had implemented digital solutions to enhance operational efficiency by reducing its reliance on paper documentation. This resulted in significant cost reductions, and a higher return on investment, in its supplier-related processes.

Another case study demonstrated how a leading manufacturing business is allocating €250m of working capital to conduct a commercial pilot scheme with a select group of its suppliers. By implementing dynamic discounting, it could expedite payments to suppliers and secure more substantial discounts. Additionally, the firm is now using electronic promissory notes for post-maturity finance, further reducing paperwork and improving financial efficiency.

The importance of keeping digital solutions simple was a key takeaway. Companies that have over complicated the process have not made progress, it was stated. The advice was to focus on one workflow and build progressively.

With the need to embrace the digitalisation of supply chains to the fore, the panel warned that the timing of any project must be right, and suggested paying heed to the lessons learnt from many successful examples. From these it was clear that the best way forward was to approach digitalisation with an open mind, identify areas for improvement, and take small steps towards implementation. By doing so, it was suggested that businesses would be able to enhance efficiency, strengthen supplier relationships, and optimise their cash conversion cycles.