What is supply chain transformation?

1. Understanding supply chain transformation

You might assume supply chain transformation refers wholly to digitizing and streamlining operations. That it’s simply a technological upgrade, be that through cloud migration, the adoption of automation or the use of AI tools like predictive analytics.

But in fact, this type of transformation requires a fundamental reimagining of traditional supply chains and how they function.

The shift from reactive to proactive

Supply chains have existed for centuries — and in decades past, supply chain operations have been fragmented and reactive by nature. Whether caused by siloed organizational structures, legacy systems, or limited integrations, many corners of this particular sector have been slow to modernize.

But by embracing a shift towards intelligent, data-driven processes, organizations can achieve end-to-end supply chain optimization for the first time.

Supply chain disruption is prolific, and evolving…

Global supply chains are facing a diverse and complex threat landscape, grappling with disruption caused by factors like:

• Frequent extreme weather events
• Geopolitical conflict and unrest
• Inflation and wider economic upheaval
• Strikes and labor/skills shortages
• Increasingly sophisticated forms of cargo crime
• Regulatory shifts and policy updates
• Unexpected tariff changes

The wide-ranging impacts of these disruptions are revealing the true cost of rigid, outdated supply chains, and the hidden inefficiencies hindering their transformation. The resilience and agility delivered by successful transformation can prevent reputational damage, keep insurance rates low, and help to minimize the costs associated with expediting or replacing cargo.

• Read our article on ‘How hidden business process inefficiencies could affect your supply chain’

2. What are the key drivers of supply chain transformation?

As well as the types of disruption we’ve just mentioned — there are several other concerns motivating supply chain transformation across the globe. Here are some of the key drivers:

Speed, cost & convenience expectations

The bar for speed, convenience, and affordability is constantly getting higher. A recent McKinsey survey found that 90% of consumers abandon shopping carts that feature high shipping costs, while many place importance on flexible delivery options. To meet these customer expectations, supply chain organizations need to identify new time and cost-saving efficiencies.

Increasing pressures to go green

Freight is on track to become the highest carbon-emitting sector by 2050, and businesses across every part of the supply chain are under pressure to ramp up sustainability efforts. New regs like the EU’s Corporate Sustainability Due Diligence Directive (CSDDD) are being implemented to encourage more transparency and accountability around environmental and social impact. However, archaic systems can’t deliver ready access to the data that transparency requires.

A growing need for agility and resilience

From the pandemic and tariff wars to actual wars, the past five years have shown us how vital it is for supply chains to insulate themselves against the impact of world events. Modernized supply chains, with the tech and strategies in place to absorb and adapt to economic turbulence that’ll continue to thrive.

Benefits of real-time visibility and orchestration

Real-time visibility and orchestration of processes give supply chain functions and businesses a competitive advantage, enabling faster, data-driven decision-making, reducing risk and driving down operational costs by minimizing bottlenecks and delays.

• Read our article ‘How to build a resilient supply chain in 2025.’

3. What does supply chain transformation look like in practice?

Supply chain transformation looks different in every organization, but as well as the digitization of systems and processes — there’s a handful of components that apply pretty universally.

Strategic realignment

A disconnect exists at the core of many enterprises, with different departments and systems speaking different languages. Being so complex and multifaceted, spanning multiple functions, supply chain management is especially prone to this. Successful supply chain transformation requires the break down of these functional silos between operations like procurement, logistics, and sales. With a fully integrated, holistic supply chain strategy, you can be sure all areas of the business are aligned with (and contributing to) business goals.

Data-driven decision-making

In the past, decisions around inventory management and demand planning were made based on historical trend data, plus the experience and instincts of business experts. Today, AI-powered tools like predictive supply chain analytics and trend forecasting deliver real-time visibility, empowering enterprises to make data-driven decisions that reduce risk and bolster resilience.

Customer-centric design

As customer expectations shift while margins get tighter, customer-centric design has become a central pillar of supply chain digital transformation. The one-size-fits-all approach is outdated and unsustainable. Instead, organizations need segmented service strategies and variable pricing models, based on customer value.

How is process-led supply chain transformation different?

Too often, organizations tackle individual supply chain challenges on an ad-hoc basis, instead of addressing the underlying processes. This approach only ever delivers partial, temporary benefits — results that are sure to be eroded as the supply chain landscape evolves.

The process-led method is the antithesis of this ad-hoc approach to modernization.

With process-led supply chain transformation, enterprises use process intelligence (a combination of system data, process knowledge, and AI that knows how the business works) optimize the individual processes that make up their entire supply chain, making it work cohesively.

• Download our supply chain datasheet to learn more about how process intelligence can get your supply chain working as one.

5. How does process intelligence transform supply chains?

Without complete visibility, it’s impossible for businesses to see how their supply chain processes actually work. Efforts to transform a single component of the supply chain have a knock-on effect which unbalances the rest. In fact, 76% of transformation initiatives in logistics fail to meet critical performance metrics, according to Gartner.

The Celonis Process Intelligence Platform develops a common business language, enabling you to see, understand, and enhance your supply chain processes — connecting individual elements so they work together effectively. Our platform functions as the command center for your supply chain. Powered by Celonis’ process mining technology, the platform allows for 360-degree visibility, so you can identify any sticking points in your supply chains, like finding patterns in delayed supplier deliveries, and rooting out the cause.

• See how the Process Intelligence Platform works in practice with our supply chain transformation demo series.

This visibility also gives you the agility to be proactive when supply chain disruption strikes, taking measures to mitigate risk and insulate your organization against the impact — from adjusting inventory to finding alternative suppliers, or even trade routes.

These quick wins help to build internal buy-in around change management, combating hesitancy about transformation initiatives. Showcasing the technology’s ability to bolster resilience and improve performance, goes a long way to settling any new process jitters.

Here’s a few of the other core benefits our platform provides:

• Boost service levels — by reducing stockouts, improving OTIF rates and operating with realistic lead times.
• Optimize working capital — by eradicating inventory bottlenecks, reducing and reallocating excess inventory.
• Closely manage costs — by eliminating unnecessary touchpoints, reducing spot purchasing and optimizing load consolidation.

But as well as delivering this game-changing level of visibility, our Process Intelligence Platform gives you access to interrogable process insights, as well as a whole gamut of AI-powered apps. Purpose-built to solve specific supply chain management challenges, these include the likes of the Material Allocation app, a number of inventory management apps, and a selection of order management apps too.

Put simply, taking a process-led approach to supply chain transformation drives cost efficiency, bolsters agility, and improves customer satisfaction. All by giving enterprises the insights, understanding, and tools they need to optimize their processes, end-to-end.

• Read our ‘Process-led supply chain transformation’ infographic to learn more.

6. Supply chain transformation success stories

Still not sure how Celonis Process Intelligence could expedite your supply chain transformation journey? Take a look at a few of our case studies to see the Celonis Process Intelligence Platform in action.

Celonis + AstraZeneca: Driving efficiency, innovation and measurable results

What started as a proof of concept now delivers optimised inventory levels, accelerated medicine delivery and streamlined data collection — all through the adoption of Object Centric Process Mining with Celonis.

[Read more]

Celonis + MAHLE: Boosted agility and smarter inventory management

The leading automotive supplier was grappling with excess inventory and an opaque supply chain. Alongside Celonis, MAHLE co-innovated the Inventory Control Center; a single source of truth that links all inventory-relevant factors, leading to the successful reduction of inventory group-wide.

[Read more]

Celonis + thyssenkrupp Rasselstein: Full transparency and tighter supply chain control

The premium-grade packaging steel provider wanted to reduce manual effort, raise productivity, and optimize working capital. With Celonis Process Intelligence Platform, they have predicted working capital improvements in double-digit millions.

[Read more]

Celonis + Stora Enso: Digitally transforming the order fulfillment process

Stora Enso — leaders in renewable packaging, biomaterials, and wooden construction — knew their order fulfillment process wasn’t keeping up with customer expectations. Using the Celonis platform, the business was able to reduce manual handling time and achieve a 20% increase in OTIF performance.

[Read more]

7. Ready to transform your supply chain?

The process-led approach to transformation is shaping a new era for traditional supply chain operations, but choosing the right partner is vital.

Celonis has more than a decade’s knowledge and experience of enhancing supply-chain-specific processes. With our Process Intelligence Platform, you can get the maximum value from your process data, peeling back the layers that obscure how your business actually runs, to reveal opportunities for new efficiencies and improvements.

Take the next step on your supply chain transformation journey today, and get in touch with one of Celonis’ experts to find out how our Process Intelligence Platform can help.

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