Ebook: Putting customers at the centre of the OEM supply chain

Around the world, original equipment manufacturers (OEMs) have earmarked their supply-chain operations for digital transformation. The reasons for this technological undertaking are clear: manufacturers are on a mission to improve customer service and build stronger, closer links with the end-users of their products.

A vital part of this picture is the emergence of so-called smart products, enabled
by the Internet of Things (IoT). These products, which transmit data back to
an OEM about their condition and usage, present an opportunity for OEMs to
communicate directly with end-customers and offer them add-on products and
new services. At the same time, these smart products vastly extend the scope of
the OEM supply chain.

New technologies that support data-driven decision-making are key to addressing
the challenges posed by today’s extended supply chains. But how willing are OEMs
to deploy them, and how prepared are they to identify and act on the valuable
insights new technologies will deliver? What are OEMs’ aspirations for intelligent
supply chains? And how can supply-chain transformation improve customer

These questions are the focus of this report by The Economist Intelligence Unit,
which was sponsored by Microsoft. The research is based on a survey of more than
250 senior business executives at OEMs in North America, Europe and Asia-Pacific.

Key findings include:

  • Ninety-nine percent of OEMs believe that the digital transformation of
    their supply chain is important to meeting their organisations’ strategic
  • OEMs identify many emerging technologies as important to the
    collection, analysis and use of supply-chain data. These include robotics
    (83%), IoT (71%), AI (63%) and blockchain (53%).
  • According to the survey results, AI, IoT and blockchain are the least
    widely used technologies. Fewer than half (47%) of all respondents surveyed
    have either widely used or used at least one for specific projects. However,
    early adopters of these emerging technologies more frequently identify their
    organisations as better performers in terms of financial success relative to those that are still piloting and evaluating or have yet to implement at all. This trend suggests early adopters are already successfully integrating new technologies into the organisational strategy and deriving business value.
  • The stakeholders that OEMs most frequently partner with for collecting,
    analysing and using supply-chain data are B2B customers. Forty-nine
    percent of respondents say they partner with them “a great deal”. Contact with
    direct customers, however, lags behind, with 43% of OEMs saying they partner with downstream B2B2C customers a great deal.
  • However, only half (51%) say that they use metrics relating to customer
    or stakeholder satisfaction to measure the success of digitisation in
    their supply chain, suggesting significant room for improvement when it
    comes to accurately identifying and meeting customer needs.
  • OEMs are optimistic they can achieve meaningful business benefits from
    supply-chain transformation, including an improved ability to compete.
    Eighty-seven percent agree that five years from now it will be easier for their
    organisation to collect, analyse and use supply-chain data to meet their strategic objectives.

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