Why should A&D look at supply chain digitization? ROI.

Huge shifts are happening in the way organizations handle supply chain management. Recent studies reveal that supply chain digitization is not only a hot topic, but it’s also a trend that is gaining ground because of the huge ROI potential. And because of advances in security and compliance capabilities, supply chain digitization is increasingly important for the A&D industry.

Some of this major shift shows up in the “Industry 4.0: Building the digital enterprise” report from PwC. The report documents key findings from their 2016 Global Industry 4.0 Survey.  The evidence is compelling: Now that supply chain digitization is an option for the A&D industry, they are going for it.

• 76% of A&D companies expect to have achieved advanced digitization in their operations within the next 5 years.
• 54% say they have already reached advanced levels of digitization in their product development & engineering functions.
• A&D organizations plan to spend 5% of annual revenue in digital operations solutions over the next five years.

Of course, these organizations aren’t jumping on the supply chain digitization bandwagon because it is cool. They are looking forward to concrete ROI. PwC also reports that 37% of A&D organizations in the Americas expect to reduce costs by over 20% over the next five years—and 39% expect to reduce costs by more than 20% over that same time frame. This demonstrates the ROI potential of supply chain digitization.

According to SCM World’s Future of Supply Chain survey, digital supply chain and cloud solutions are trends that will define the “fulfillment systems of the future.” So we see that there are strong arguments for investing in supply chain digitization—but what does this mean?

Ideally, it means moving away from inefficient, disjointed, manual activities including emails and spreadsheets. Digital supply chain solutions improve operational efficiency. They keep data organized and readily available. They also provide easy analysis for streamlining future development. And, if organizations choose the right vendor, they enforce a standard level of security and compliance.

Supply chain digitization also introduces the possibility of automated, one-stop solutions. An end-to-end digital supply chain solution can improve cash flow, provide supply chain visibility, standardize processes, and streamline document management. It can also reduce purchase order cycle times, and lets organizations manage the purchase order lifecycle from end to end. Resources that were dedicated toward supply chain management can be used for mission-critical activities instead.

The supply chain digitization trend is already here. Digital solutions are making manual processes obsolete, and allowing A&D organizations to modernize sourcing, invoicing, and supplier relationship and contract management. The ROI benefits are clear, and the industry is moving fast. Don’t miss out.

If you are ready to learn about Exostar’s supply chain solutions, read our Solution Overview here.