Digitizing your business will give you the data you need to sense, shape and respond to demand changes in real time. This will also allow you to apply scientific principles and derive more accurate demand forecasts.
Going digital doesn’t break down silos, but it does help to horizontally integrate your organization by linking vertical functional activities with horizontal processes.
Digitization also facilitates digitally “connected” collaboration and helps apply statistical process control techniques to manage and improve demand.
The traditional organizational structure is vertical and groups function in a way that creates the very silos that serve as a constraint to optimizing performance. Breaking down the silos is impossible; vertical silos are necessary for effective execution of horizontal processes that flow across organizational structures.
Companies must look to digital technologies to electronically connect the silos and functional plans to manage the organization vertically and horizontally simultaneously and foster intelligent “digital collaboration” among the silos.
We traditionally view the supply chain as a chain of sequential links each with behavioral attributes that act separately and together to cause demand variation from historical performance. This has been widely characterized as the bullwhip effect. As demand variations are communicated sequentially through the supply chain there are
time delays and amplification of the signal variations that cause error to propagate the network. As a result, planners are making million dollar working capital decisions largely based on custom spreadsheets and tribal knowledge.
This. Must. Change.