Conglomerate Supply Chain Digitization: Top-down, bottom-up, or both…?

3 min read
Oct 1, 2023 9:01:24 PM

You probably know them, or you might even work for one, these giant companies, often referred to as conglomerates. Multi-nationals with 30.000 employees and more that form an umbrella over a huge amount of sub-companies, resulting in a complex legal entity structure and a mega diverse IT-landscape to support all these different businesses and activities.

From a supply chain perspective, the scale is also massive. The combined number of external business partners reaches tens of thousands companies and more. Even hundreds of thousands in the more extreme cases. So next to taking your own people on a digitization journey, you also need to make sure that all these external partners join such an initiative to conclude a successful transition.

At Quyntess, we are used to scale and complexity. Over the years, we have specialized in helping large companies, with production and distribution sites on different continents, to digitize their global supply chains, and at an impressive pace. Typically, the partnership starts through an isolated improvement project, resulting in additional opportunities to grow the solution in a 3-dimensional way: more processes, more business partners and more internal users that adopt the solution. In that sense, not a corporate decision, but gradual and bottom-up transition that follows the positive words spread. This will however not easily lead to large scale adoption. On the opposite side, we have started partnerships through top-down digitization projects, resulting in equally good transformations through a profound and corporate led evaluation process, backed by one business case and a board level decision to start such a strategic project.

Typical downsides of bottom-up initiatives are speed and cost, but the overall involvement and enthusiasm is really good. On the IT-side however, it is difficult to standardize on technology if all entities have a free choice to choose different partners and solutions. Reducing IT-complexity typically is a continuous ambition these companies have.

What if you would be able to combine the best of both worlds? A corporate initiative to implement a foundation for digital initiatives, already hooked into the different back-end systems. But once this foundational platform is implemented, each sub-company can manage their own SC digitization agenda driven by their specific business priorities and improvement plans. This can be offered if that platform offers a marketplace of apps that sub-companies can easily activate to gradually digitize data and document exchange with external business partners over multiple processes. This would mean that each sub-company could optimize and digitize their ‘micro supply chain’ based on their own needs and priorities, while they unconsciously contribute to the digitization of the conglomerate’s ‘macro supply chain’.

The digital ambitions of each conglomerate can be defined as a target followed by individual sub-companies. For instance, the current and future targets per sub-process in the overall Procure-to-Pay process can be monitored as follows:
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The percentages are derived from aggregating the digitization results from separate sub-companies, as you can see in the below graphs (compared to corporate target and to the top runner)
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We believe our implementation framework enables digitization, including feedback loops, and systematically learning and improving each round of scaling up. In such a modern business network & app store setup, each business unit can prioritize digitizing a specific process without being bound to any other unit.

The overall corporate effect remains gradual digitization over all processes, resulting in more corporate and sub-company SC visibility, performance and excellence. Obtained through a cost-effective top-down platform choice, but flexible and modular apps to be consumed by the businesses in a bottom-up manner. 

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