Simon D. Ellis, Program Vice President, IDC
Digital disruption is happening at different speeds across different industries – but it is happening in all industries to one degree or another and the manufacturing industry is not to be spared.
Organizations that don’t transform digitally will struggle to grow in the future and may even find themselves out of business. Recent IDC research data about digital transformation (DX) shows that organizations are aware of this peril and recognize the need to both adopt and adapt to digitally native technology.
As the world goes digital, manufacturers, retailers, and wholesalers are experiencing massive changes in how they run and manage their supply chains. Many changes are driven by new capabilities enabled by cloud and other digital technologies. In IDC’s 2018 Supply Chain Survey, 75% of companies felt that the cloud was a critical element to delivering supply chain excellence both today and into the future.
Most manufacturers we spoke with see dual goals for their supply chain transformation programs. While disruption may hover in the background of supply chain executives’ minds, the opportunities for digital transformation (DX) to drive productivity gains are very much in the foreground. Disruption mitigation and/or enablement is a critical part of DX in the supply chain, but the current focus appears to be more on efficiency and waste reduction. In IDC’s 2018 Supply Chain Survey, 60% of companies also noted that meeting customer/consumer needs was the driving force behind their supply chain transformation efforts
Supply chain management (SCM) is the key to unlocking this business value, and IDC’s spending data supports the contention that cloud is the future of SCM. While we see year-on-year growth rates of on-premise SCM in the 2–3% range (depending upon application area), comparable growth rates for cloud are 15–18%. IDC projects that by 2021 at the latest, the overall value of implementations of cloud SCM will surpass that of on-premise SCM implementations.
IDC’s 2018 Supply Chain Survey found that new technologies like cloud SCM are now viewed as top drivers of supply chain change and can help organizations to:
- Increase the productivity of employees responsible for producing and distributing goods
- Win more business by delivering more products on time and at higher quality
- Identify operational cost reductions across their supply chains
- Enable efficiencies for teams whose work supports or is adjacent to supply chain operations, such as supply chain-related customer support, development, and regulatory compliance
For an in-depth look at a cloud SCM and the business value of a successful deployment, we invite you to sign up for the IDC webinar, Just the Facts Ma’am: The Quantitative Benefits of Oracle’s Supply Chain Management Cloud, brought to you by Oracle.