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Digital operations transform the physical

How real-time insights can revolutionize value chains

Digital operations requires real-time optimization across the end-to-end value chain so organizations can instantly respond to their “always on” customers and business partners. Turning supply chain data into information in real time is a critical component in making business decisions and managing core objectives. Today, senior operations executives, no matter what their titles (CSCO, COO, Senior Vice President of Operations and the like) can be responsible for managing three major types of operations: manufacturing and overall supply chain; service delivery, including field service and customer service; and related functions that may include sales and information technology.

With today’s new technologies, the senior operations executive must also determine the digital operations strategy that encompasses instrumented value chains – integrated with the IoT, cloud applications, advanced analytics and real-time insights – all of which require a different set of skills than in the past.

The window for competitive differentiation in all industries continues to shrink. In the current marketplace, executive leaders must race to convert data-driven insights into meaningful results. So, how are today’s leaders of the pack integrating end–to-end processes and creating fluid value chains?

In 2010, Chief Supply Chain Officers (CSCOs) predicted that their supply chain flows would be optimized within five years.1 But as we approach that five-year mark, only a handful of CSCOs can claim success.

In fact, the CSCO role is increasingly changing in scope. Today, senior operations executives, no matter what their titles (CSCO, COO, Senior Vice President of Operations and the like) can be responsible for managing three major types of operations: manufacturing and overall supply chain; service delivery, including field service and customer service; and related functions that may include sales and information technology.

With today’s new technologies, the senior operations executive must also determine the digital operations strategy that encompasses instrumented value chains – integrated with the IoT, cloud applications, advanced analytics and real-time insights – all of which require a different set of skills than in the past.

Senior operations executives in some leading companies are implementing a digital operations strategy that includes real-time information and reaction. They are using perpetual planning, optimal orders and dynamic distribution. By applying analytics and real-time optimization to predict outcomes, these leaders are able to prescribe actions and propel operational performance as digital transforms the physical world.

Digitization is moving fast – really fast. In our 2014 Chief Supply Chain Officer executive report, we learned through direct interviews that operations executives are working hard to integrate their entire value chain ecosystems and sharpen visibility.2 Only 22 percent stated that they have effective integration and visibility across the supply chain today, but 74 percent expect to have integrated the end-to-end process for real-time visibility in the next two to five years.


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Meet the authors

Julie Scanio

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, Global Business Advisor for Watson Internet of Things Consulting Solutions, IBM Consulting


Karen Butner

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, Global Research Leader, AI Automation, Supply Chain, Virtual Enterprise, IBM Institute for Business Value

Originally published 14 July 2015