Project Website https://digitalsc.mit.edu/
Project Start Date January 2021
Digital transformation is now a keystone of operational, organizational, and technological structures for companies who desire to be competitive in the vision of the future business environment. Work aims to support organizationally adaptable, technologically compatible, and economically viable transformation for improved value creation through quantitative methodologies.
Digital Supply Chain Transformation is the analysis of digital technology and data to the transition towards value-driven supply chains. Digital technology is accelerating the pace of business and transforming supply chains. Transforming the supply chain digitally can lead up to a 50% reduction in process costs and an increase in revenue by 20%. One of the challenges: inter-organizational collaboration changes during digital transformations.
The Initiative carefully selects a research methodology tailored to each particular research question.
The What Question -- Longitudinal scorecard data analysis based on defined supply chain data from company ERP, TMS, or WMS systems, among others, provides us with insight as to what is happening during a digital transformation.
The How Question -- Experimental design and cluster allow us to quantitatively identify patterns in complex data. Depending on the digital offering, patterns emerge about how supply chain relationships perform and what their key drivers are. Cluster analysis often reveals insights and scenarios that might not yet have been apparent to participants in the collaboration.
The Who Question -- We use game theory to understand the roles, motivations, contributions, and expectations of the supply chain stakeholders within the digital transformation. This supports the development of sustainable, fair and efficient rules for implementation and value sharing. Consequently, this methodology identifies key drivers and reveals how they influence a digital transformation.
Collaboration can take multiple forms when companies jointly implement new technologies. While vertical collaboration is widely implemented, in the digital era, horizontal collaboration is recognized as a key driver of competitive advantage. It can take place anywhere along the supply chain: between suppliers, between customers, between logistics service providers.
Digital SC has worked with global retailers, FMCGs, and LSPs who have attributed up to 30% in logistics cost savings to horizontally collaborative practices. Current research seeks to understand how digital practices enhance vertical and horizontal collaboration approaches to unlock hidden benefits.