ASCM and Deloitte roll out Digital Capabilities Model for Supply Networks

A collaboration between business consultancy Deloitte and the Association for Supply Chain Management (ASCM) announced today is comprised of a new model geared towards providing logistics stakeholders with the tools needed to face various supply chain-related obstacles, such as market volatility, digital disruption, and shifting consumer expectations, among others.

Entitled the Digital Capabilities Model (DCM) for Supply Networks, Deloitte and ASCM explained that this offering is designed to help transform supply chain management for today’s increasingly interconnected and digital world, adding that DCM for Supply Networks is compatible with the Supply Chain Operations Reference (SCOR) Digital Standard, a supply chain framework, linking business processes, performance metrics, practices, and people skills into a unified structure, established by ASCM when it was still operating under the APICS moniker.

And they added that DCM for Supply Networks enables companies to advance capabilities from traditional linear supply chains to digital networks in the form of dynamic interconnected systems that simultaneously plan, execute, and enable digital supply chains. What’s more, they explained that this offering is geared for any company with a digital transformation focus on its supply chain roadmap, while helping them understand the complexity of digital supply networks and also assess its process maturity.

The impetus for DCM for Supply Networks kicked off about 18 months ago, when the ASCM board initiated a digital task force, according to Peter Bolstorff, ASCM executive vice president for corporate development, with a focus on how to start to think about digital transformation in the future.

“At that time we had created an idea for how we want to update the SCOR model to a digital standard, but then there was also a recognition that we needed to really think abut a different paradigm shift on digital capability,” said Bolstorff.  “Deloitte was part of the digital task force, which was the beginning of the collaboration around introducing this very large paradigm shift in thinking about supply chain from a capabilities standpoint…a relational model versus a traditional hierarchical linear supply chain. Our board addressed it in the digital task force, and we updated the SCOR digital standard, and we are excited about this next-gen capabilities model.”

Chris Richard, principal, high tech sector lead for supply chain and network operations, Deloitte Consulting LLP, said that what drove the need to dig into DCM for Supply Networks was the realization that where for hundreds or even thousands of years supply chain management has been under the paradigm of what processes people want to follow, in terms of planning, sourcing material, delivery and managing transportation.

“It starts with ‘what do I want to do?’ and then ‘let me find a technology to make that happen,’” he said. “The paradigm shift we started to realize a few years ago was that some of these technologies are becoming so powerful and innovative that they now transform how I do run my supply chain. Here is this new paradigm that has been enabled by technology.”

As an example, Richard noted how, for decades, companies were limited on computing power and memory, in terms of how accurate and granular it could be and was linear and sequential. But, now, with computing power so broad, a production plan for all factories can be developed at once and consider all those interdependencies through things like sensors in factories, artificial intelligence, and blockchain, as examples.

“That got us thinking about what we were going to do differently in parallel with what was going on with ASCM,” said Richard. “We had developed our own internal digital supply networks (DSN) model and started to talk with ASCM about if there was a way to help collaborate there…in taking our starting point and working it into a sort of publicly-accessible open model for digital capabilities.”

As for how the DCM for Supply Networks functions, ASCM’s Bolstorff said it provided models for its members, with three reasons for using them.

One is an investment strategy, with a company thinking about digital transformation but unsure about where it is on a maturity scale or what process approach to take and a need to understand what relationships and capabilities a company needs to be thinking about. The second reason is for a company currently in a transformation plan and how to effectively engineer a successful transformation and ensure success. The third reason is for a company looking for an “outside-in” point of view, which Bolstorff said takes a non-biased approach.

The DCM for Supply Networks model is based on what it calls level one capabilities, which Deloitte’s Richard said serve as a rough equivalent to the SCOR plan, with the addition of connected customer and product development pieces, referred to as dynamic fulfillment.

“For a transportation or logistics professional that wants to understand how to build more of a digital supply capability, when he or she clicks on Dynamic Fulfillment [in DCM], it takes them to level two capabilities like efficient transportation operations and efficient warehouse operations, which are pretty conventional. There is another capability for omni-channel order fulfillment for users to be able to order from anywhere and deliver anywhere, which is sort of a meeting in advance. It is not really addressed explicitly in SCOR, but it is a need.”    

Another offering in DCM focuses on abilities that Richard said are more “pushing the edge,” citing interconnected signal transmission as an example, in which DCM is looking at demand and status signals, what truck is a user’s load on, or if an order needs to be replenished, among others.

“What we are trying to do here is provide a range of capabilities that meet very specific needs like trying to take a transportation or warehouse operation to make it more digitally at one end,” said Richard. “And at the other end, what are some different concepts where I can really push the envelope here and function more productively in how I meet my goal.”   

Each level capability shows definitions for different objectives as well as drivers for change, what the maturity looks like from early stages to very mature, and a look at a typical day in the life of a person before and after leveraging digital capabilities. These types of things are viewed as digital building blocks for building a supply network, and also how these capabilities relate to each other, noted Richard.

When asked how DCM for Supply Management serves as an extension of the SCOR model, ASCM’s Bolstorff explained that going back to 1996, when SCOR was launched, that over that time there have been three or four major innovation shifts of the model that really sparked engagement in the community.

“We believe the introduction of these [DCM] capabilities will be at that same level, in terms of a shift,” he said. “It is not a change that it introducing something absolutely different but compatible. And it really answers the need of our corporate members around what we need to be thinking about from a capability standpoint down to a visualization of how the processes work together. It has really carefully crafted and addressed in a dynamic and synchronous way the way people have to think about the supply chain of the future.”