Introduction

Digital Supply Chains are evolving rapidly, and larger enterprises have the resources and expertise to assess the opportunities, whether through in-house teams or being able to pay for external consultants. SMEs don’t have that luxury – the day-to-day is often all-consuming, and many of the case studies focus on the larger organisations who’ve been able to lead the way. 

The Digital Supply Chain Hub’s Future of Supply Chain Labs are designed to inspire SMEs to explore the state-of-the-art and to roadmap their own digital journeys to greater supply chain productivity, resilience and sustainability.

Six companies were selected for the first online SME Future of Supply Chain Labs held in July 2022. They varied in size from micro to small to medium, and represented a wide range of industries including footwear, industrial equipment, cosmetics, FMCG, automotive and pharmaceuticals.

Their wide-ranging motivations included:

• “meeting potential collaborators and to expand our network”
• “reduction of wasted resources, food, power”
• “building a circular economy to maximise value creation and minimise environmental impact”
• “find better ways to fulfil supply needs”
• “looking to understand more about additive manufacture and how it will help to restore manufacturing”
• “understand what ‘digital supply chain’ means, benefits [achievable], where to start”
• “real time data, tracking and traceability”
• “compelling need to improve competitiveness, sustainability, customer service”

Each company has its own supply chain challenges

• “messy and obscure sourcing chains”
• “customer desire for greener alternatives”
• “dealing with materials shortages – especially computer chips”
• “managing unpredictable order volumes”
• “customers imposing penalties for late delivery of short orders”
• “visibility and reliability of supplier capacity”
• “risk of supplier non-compliance”
• “disruptions like the Suez canal blockage and Channel Tunnel restrictions”

The Future of Supply Chain Labs programme for SMEs is held regularly, including online sessions for all as well as face-to-face regional and sector-specific events.

The challenge

What are the main obstacles to manufacturing success? SMEs can find themselves left behind larger companies with reduced access to digital skills, limited cashflow and lower bargaining power with suppliers and customers. Some are starting from a low level of digital readiness or maturity in using data and digital across the business, and all need to build confidence to integrate digital into the supply chain.

Because SMEs are such an important part of UK industry, in numbers and in their specialisms and agility, the UK economy as a whole needs SMEs to digitalise along with their suppliers and customers.

The Future of Supply Chain Labs raise awareness of what can be achieved, develop digital supply chain roadmaps tailored to SME company needs, and foster collaboration with suppliers and customers for productivity, resilience and sustainability.

The Digital Supply Chain Hub aims to develop and empower a globally competitive digital supply chain ecosystem, working together to unlock the opportunities facing UK manufacturing, and delivering:

• Over 1000 people developing digital skills
• 100 digital technology solutions, involving 200 companies
• Increased visibility leading to 20% greater resilience within supply chains
• 10% reduction in waste, 5% reduction in CO2

Approach to the solution

The Future of Supply Chain Labs provide SMEs with:

• Opportunities to engage and collaborate with other companies
• Showcases of data and digital technology projects and the benefits achieved, such as “Digital Sandwich”
• Benchmarking of Supply Chain Digital Readiness to adopt technologies across all business dimensions including leadership, workforce, operations, partner collaboration and technology integration/ support
• A Digital Supply Chain Roadmap prioritising investments and setting out an achievable journey to greater productivity, resilience and sustainability
• Access to wider resources of the Digital Supply Chain Hub
• Opportunities to apply for relevant funding, in collaboration with supply chain partners

The fullest range of data and digital technologies for supply chain are open for exploration with help from DSCH experts. The first Future of Supply Chain Lab focused on data and digital technologies for supply chain performance including:

• End-to-end data management through inter-operable ERP, MRP and MES
• Blockchain for traceability of materials and product quality
• Artificial Intelligence and data analysis to improve warning of supply issues

 Many SMEs attending the first Future of Supply Chain Lab noted the complexity of challenges that are holding them back from digitalising their supply chains, for example data sharing and an overwhelming range of potential solutions available. Although many have already begun the process of digitalising their data and implementing core IT systems (e.g. ERP, MRP, MES) the next step is proving much harder.

A new framework for Digital Supply Chain Readiness is being used to help companies to benchmark and to chart their progress across all the important attributes of digital supply chain, from leadership to workforce development to operations to external partnerships, all underpinned by technology integration and systems support. You can apply to test this tool here. 

Next steps

The first steps of the digital supply chain journey enabled by the SME Future of Supply Chain Labs are to Think Big about the potential for improved productivity, resilience and sustainability; then to Start Small, with each company making progress with key enablers of digital success in their particular worlds. The third step is rapid scale-up in collaboration with supplier and customer partners, powered by digital, through the wider support available from the Digital Supply Chain Hub.

Anonymised feedback from each Open Lab will be made available to all participants for collective learning and for continuous improvement of the programme.

SMEs will have the opportunity to collaborate with other companies and receive support throughout the three-year Digital Supply Chain Hub programme.