Digitalization of Supply Chains : A case study of value adds by digitalizing the supply chain

• Main Authors: HERMANSSON, AXEL, SYLVÉN MÖLLER, PETER
• Format: Others
• Language: English
• Published: KTH, Industriell Management 2016
• Subjects: Digitalization; supply chain; information and communication technology; drivers; value adds; automatization; information flow; reliability
• Online Access: http://urn.kb.se/resolve?urn=urn:nbn:se:kth:diva-189757

Technology has been developing over the last decades and the phenomenon of digitalization is becoming a reality for all industries. For supply chain managers, it is becoming a necessity to use the new technology to create interoperable systems that can increase responsiveness, transparency and cost efficiency of their supply chains, in order to meet the more demanding customer expectations and business environments. Changing business environments force companies to enter new markets where margins might be lower, which requires more cost efficient supply chains. Company X, the commissioning company for this research is an example of a company struggling with this. They are starting to develop Information and Communication Technology (ICT) products, which have lower margins than previous products. Company X, who is about to start the journey of digitalizing their supply chains, would therefore benefit from knowing what value adds that digitalization can bring. There is currently a gap within the field of supply chain management regarding evaluation of digitalization projects. Therefore, this study investigates the main drivers, factors that enable changes and affect value adds, of digitalization of supply chains, the changes these drivers result in and the value adds of these. The study also contributes with a framework for future evaluation of digitalization projects.The study was conducted with case studies at three companies, which are all comparable to Company X in both size and business. The investigated companies are all global producers of ICT-products who have conducted a digitalization of their supply chains.The main finding of this study is that the overall driver for digitalization according to the case companies is Standardization and Simplification, and all case companies state that this is the main goal for digitalizing the supply chain. Furthermore, automatization from tender to invoice is one of the major changes that standardization and simplification of the Supply Chain Information Technology (SCIT) enables. This improves the information flow between all silos within the supply chain and also helps increase order reliability, responsiveness and scalability as well as improve integration and collaboration with partners and suppliers, and it increases the overall process and cost efficiency. This all helps to increase the customer experience and satisfaction, which is stated as the major value add from digitalization of the supply chain according to the case companies.