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True supply chain excellence will only come from making a digital business transformation. It's a transformation that exploits all that technology has to offer, facilitates supply chain collaboration, and leads to new levels of operational excellence. More than a one-time project, the transformation is a journey - and the time to start that journey is now.
The model for creating business value has changed. Companies today participate in extended supply chains, where real operational efficiency and revenue enhancement come from greater visibility, integration, and synchronization among connected partners. In short, collaboration among the partners in the extended supply chain-collaboration beyond the physical walls of the enterprise-is the new arena for value creation.
Collaboration occurs when companies work together for mutual benefit. It happens when supply chain partners leverage each other's operational capabilities so that in combination they perform better than they could possibly do alone. Collaboration can occur at all points along the supply chain-from design through procurement to final distribution. When done effectively, it enables companies to share information that can dramatically shorten processing time, eliminate value-depleting activities, and improve quality, accuracy, and assetproductivity-all of which are fundamental to long-term success.
Supply chain collaboration can produce dramatic improvements in operational and financial performance. But there is no silver bullet to achieving real collaboration and the associated benefits. It requires hard work and some radical changes in thinking and behavior. It demands business-process integration and customer focus as well as a mindset that views supply chain relationships as strategic differentiators. It short, for a firm to achieve true collaboration, it must go through what we call a digital business transformation (DBT). DBT is the journey of reinventing how daily business is conducted to fully exploit information technology and to facilitate supply chain collaboration to achieve unprecedented levels of operational excellence.
And DBT clearly is a "journey," not a consulting project or a one-time improvement initiative. It's the process of reinventing a business to digitize operations and formulate extended supply chain relationships. The DBT leadership challenge is about re-energizing businesses that may already be successful to capture the full potential of information technology across the total supply chain.1 In essence, DBT is the conversion of business operations from Industrial-Age to Information-Age technology. It's about reinventing...