The vast majority of the supply chain environment is uncaptured by supply chain decision makers’ current digital models, according to Gartner, Inc.
This incomplete view of the supply chain results in digital trade-off analysis failing to improve decision makers’ outcomes, despite the potentially transformative capabilities of these new tools. Digital trade-off analysis includes things such as what-if analysis, scenario modeling, or simulations. Digital trade-off analysis offers improvements in analytical power and clarity when processes are adhered to and enabled with high-quality data.
“The ‘digital-to-reality gap’ will continue to hamper supply chain performance objectives unless technology investments are complemented by enabling decision support for local, cross-functional decision makers, who have better visibility into the hidden and often undigitized elements of the supply chain,” said Suzie Petrusic, Senior Director Analyst in Gartner’s Supply Chain Practice.
Gartner’s research, based on an analysis of 600 survey responses of supply chain decision makers received in December 2022, found that current use of digital models to analyze trade-offs made no meaningful impact on the rate of good decision outcomes.
Slightly more bad decisions were made with the use of digital tradeoff analysis than without and marginally increased the percentage of bad decision outcomes. The research defined a “good” decision as one that led to and met the decision maker’s expected supply chain performance and cost outcomes with low decision maker regret (See Figure 1).