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Digitalization of operations and Digitalization

of operations
supply chains: Insights from and supply
chains
survey and case studies
N. Orkun Baycik
Questrom School of Business, Boston University, Boston, Massachusetts, USA, and
Received 28 September 2023
Shimon Gowda Revised 20 November 2023
Introlligent LLC, Folsom, California, USA Accepted 25 November 2023

Abstract
Purpose – This article aims to understand where industry is in terms of digitalizing their operations, what features
of this transformation are essential for practitioners, and what barriers they are facing during their journey.
In addition, the authors aim to provide recommendations for organization to start their digital transformation.
Design/methodology/approach – Through literature review, the authors summarize the emerging tools
and technologies in operations and supply chains to inform the practitioners. Then, the authors use surveys
conducted on 183 operations and supply chain professionals, and use statistical tools to examine the
association between variables of the data set. The authors present real-life case studies to explain important
steps of a digital transformation project.
Findings – The survey results indicate that real-time monitoring and data analytics are viewed as the most
important and needed tools for organizations. High cost, lack of stakeholder buy-in and lack of successful
business use cases are major barriers for companies when starting a digital transformation.
Practical implications – The authors provide recommendations for practitioners based on the survey
responses, and outline that starting small, focusing on stakeholder buy-in and implementation of software are
the three key steps for a successful transformation journey.
Originality/value – Main contributions of this article are to understand practitioner perspectives in
digitalization and provide guidelines for organizations to follow when transforming their operations. This
research closes the gap between academic research and practice by collaborating with operations and supply
chain professionals.
Keywords Digitalization, Operations management, Supply chain management, Visibility,
Real-time monitoring, Data analytics
Paper type Research paper

1. Introduction
Supply chain management (SCM) has been a familiar term for practitioners and academics
who have been working in the field. It has become more widely known after the beginning of a
global pandemic in 2020, COVID-19. With essential home goods slowly disappearing from the
shelves of grocery stores, news channels started reaching out to supply chain experts to
inform the citizens about why these disruptions occurred and whether there are strategies
that can minimize the impact of them.
The main objective for supply chains is to provide their customers with the best value
(Lambert & Cooper, 2000; Stock, Boyer, & Harmon, 2010). However, supply chains are

© N. Orkun Baycik and Shimon Gowda. Published in Digital Transformation and Society. Published by
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commercial and non-commercial purposes), subject to full attribution to the original publication and Digital Transformation and
Society
authors. The full terms of this licence may be seen at http://creativecommons.org/licences/by/4.0/legalcode Emerald Publishing Limited
The authors thank the anonymous referees whose comments and feedback led to a significantly e-ISSN: 2755-077X
p-ISSN: 2755-0761
improved article. DOI 10.1108/DTS-09-2023-0087
DTS becoming more and more complex as companies have multiple suppliers and multiple
customers at different locations, which cause challenges for the decision makers (Mentzer
et al., 2001). This high level of complexity makes supply chains vulnerable to disruptions (Wu,
Blackhurst, & O’grady, 2007), which impact delivery times and eventually leading to a
negative customer experience.
In addition to disruptions, without knowing where the raw material is along the supply
chain, what the inventory level is within the company and within the suppliers, and what the
customer demand is, it is inevitable that the organizations will deviate from the goals they set
for their supply chains. More importantly, the growth of e-commerce, having been accelerated
by the COVID-19 pandemic, forced more customers to shop online (Kannan & Hongshuang
“Alice” Li, 2017; Al Mashalah, Hassini, Gunasekaran, Angappa, & Bhatt, 2022). Customers
expect their orders to be delivered right at their doors within a day, and sometimes, on the
same day. Therefore, it is safe to conclude that supply chains cannot be managed in the same
way as they used to be in the past (Lyall, Mercier, & Stefan, 2018). Faster, more flexible, more
granular, more accurate and more efficient supply chains are necessary to meet the customer
demand, and digitalization (or digital transformation) is a solution to achieve these (Alicke,
Rachor, & Seyfert, 2016). Those that transform their operations will grow and have the ability
to survive in the competition. A prime example of this is a large global fashion retailer, which
increased its market share by over 28% through major investments in supply chain
digitalization. They also doubled their operating profit, and were able to accomplish all of
these in only three years (Simchi-Levi & Timmermans, 2021).
Digital transformation is a big undertake, requiring advanced technology, collaboration
and infrastructure. According to Olsen and Tomlin (2019) and Min, Zacharia, and Smith
(2019), the tools and technologies that are used in digitalization include blockchain, three-
dimensional (3D) manufacturing, data science and analytics, Internet of Things (IoT) and
automation. Some other technologies such as augmented reality (AR) (Rejeb, Keogh, Wamba,
Fosso, & Treiblmaier, 2020) and generative artificial intelligence (GenAI) (Hendriksen, 2023)
are also available, although their applications in operations and supply chains are currently
limited. Rejeb et al. (2020) explain that the reason for the limited number of industry
applications of AR can be the lack of awareness and knowledge about this technology. This is
a valid argument for GenAI tools as well since their launch has been relatively new (e.g.
ChatGPT was launched in December of 2022). Hence, in this study, we follow the footsteps of
Olsen and Tomlin (2019) and add real-time monitoring and visibility as emphasized in Lyall
et al. (2018) in our survey and analyses.
Digital transformation of operations and supply chain management has received attention
in the recent literature. Although there are studies in the literature that focus on digital
transformation, the number of articles that shed light on the current status of the industry is
scarce as we present in the next section. In this research, we aim to close the gap between
academia and practice, and conduct a survey on 183 practitioners to draw insights. We use
Cramer’s V values and hypothesis testing to understand the association between the survey
responses. The research questions we aim to answer are:
RQ1. Which of the emerging tools and technologies are viewed as the most important by
practitioners?
RQ2. What associations exist between the practitioners’ characteristics and responses?
RQ3. What are the critical barriers for organizations when starting transforming their
operations?
The remainder of this paper is organized as follows: Section 2 reviews the literature and
provides real-life examples demonstrating the use of advanced tools and technologies in
operations and supply chain management (SCM); Section 3 presents the methodology;
Section 4 discusses the empirical survey results; Section 5 provides recommendations to Digitalization
practitioners and Section 6 concludes this article. of operations
As a product of collaboration between authors from both academia and industry, our
research has implications for both academic community and operations/supply chain
and supply
practitioners. chains

2. Literature review
2.1 Digitalization of operations and supply chains
Digital transformation of operations and supply chain management has received the
attention of researchers in the recent years. Lyall et al. (2018) argue that companies need to
digitalize their operations to stay competitive and emphasize that real-time monitoring,
visibility and automation are essential in this transformation. Olsen and Tomlin (2019)
provide an overview of the Industry 4.0 technologies and discuss future research
opportunities for operations management (OM) researchers. Studies such as Cole,
Stevenson, and Aitken (2019), Asokan, Anisul, Smith, and Stevenson (2022), Son, Kim,
Hur, and Subramanian (2021), Maghazei, Lewis, and Netland (2022) review aspects of digital
transformation in the literature, however, our contribution is that we close the gap between
academia and practice by conducting a survey on industry practitioners, presenting insights
and providing a framework for a successful digitization journey.

2.2 Emerging technologies and capabilities

As outlined in Olsen and Tomlin (2019) and Lyall et al. (2018), digitalization of OM and SCM
requires advanced technology and capabilities. In this section, we review the benefits they offer
to organizations along with successful real-life use cases. While doing so, our goal is to inform
the readers from both academia and industry about the benefits they offer for organizations.
Blockchain is a decentralized digital system that allows companies to record and track
transactions that take place between multiple parties (Gaur & Gaiha, 2020). Its major
advantages are improved traceability, more efficient delivery of products, enhanced
coordination between the companies, increased product safety and security, enhanced
quality control and management practices, and reduced illegal counterfeiting (Cole et al., 2019;
Gaur & Gaiha, 2020). Companies such as Napolina (an olive oil producer), Anchor (milk
producer), Raw Seafoods (seafood producer), Walmart (U.S. based grocery store) and
Carrefour (European grocery store) have implemented blockchain technology by partnering
with providers such as International Business Machines Corporation (IBM) and Provence
(Ji, Zhou, Lai, Tan, & Kumar, 2022). This way, consumers can see the history of the goods they
are purchasing as they move from farm to shelves (Ji et al., 2022), which is essential to ease and
eliminate food safety concerns.
3D manufacturing is a technology that transforms an abstract digital design file into a
physical object using a 3D printer (Chan et al., 2018). It reduces transportation requirements
and carbon emissions, increases product customization, energy savings and efficiency in
production processes (Manyika et al., 2013; Halassi, Semeijn, & Kiratli, 2019). Airline
companies Air New Zealand, Emirates and Etihad started using 3D printing for cabin parts
either through partnerships with additive manufacturing companies or in-house capabilities;
allowing them to reduced lead times and inventory costs (Friedrich, Lange, & Elbert, 2022).
General Electric (GE) engineered a new nozzle tip design for their LEAP aircraft engine,
which is essential to improve fuel efficiency. This new design was complex-shaped and could
not be made easily (actually, it was thought to be almost impossible to make!). However, GE is
now able to manufacture these products using additive manufacturing at a manufacturing
plant in the United States (Kellner, 2017; Olsen & Tomlin, 2019).
DTS Data Analytics is an essential figure in operations and supply chain management. When
the operations are digitalized in an organization, they gain access to a significant amount of
data. Through the use of analytics, organizations can improve their forecasting, inventory
management, marketing and transportation planning (Choi, Wallace, & Wang, 2018). Blue
Diamond Growers, an agricultural cooperative and marketing organization, partnered
with System Analysis Program Development (SAP) to forecast demand more accurately
and manage supply and demand more effectively (SAP, n.d.a). Motor Oil Group was able to
identify root-causes of abnormal events with up to 77% accuracy in 20 hours using
historical data, which would take 120 hours without the aid of an analytics tool.
Furthermore, they achieved up to 70% accuracy for predicting future sensor
measurements using root-case analysis and time-series analysis, respectively (SAP, n.d.b).
IoT is a technology that allows communication between digitally connected devices.
According to Ni
zetic et al. (2020), the use of IoT technologies in industrial applications leads to
more efficient production processes, efficient communication between operators and
machines, and efficient quality control with reduced losses. IoT technology can improve
tracking and visibility in supply chains, for example, GAP, Inc. (a clothing store) used radio-
frequency identification (RFID) technology to establish an item level tracking for their denim
apparel in their Atlanta store. With this, they reached to an almost complete on-shelf
availability and increased sales by about 12% (Wilding & Delgardo, 2004).
Automation involves robots and/or automated guided vehicles (AGVs) that can take part
in manufacturing and/or transportation. As summarized in Bechtsis, Tsolakis, Vlachos, and
Iakovou (2017), its benefits include increased productivity, labor cost savings, reduced energy
consumption and enhanced safety. British Petroleum (BP) invested in an automation
technology (namely, Fairmarkit) and was able to actively source $100M via automated
processes with no human intervention. Furthermore, they reduced their cycle time by half
(Fairmarkit, n.d.).
Real-time monitoring opens doors to better managing volatility, increased asset utilization
and providing customer convenience at an optimized cost (Lyall et al., 2018). It may include
tracking orders, production or delivery status; inventory level at the supplier(s), and demand
amounts of the customer(s). Allbirds Inc., a shoemaker, for example, labels every product with
their carbon footprint to inform consumers on the environmental impact of the supply chain.
Furthermore, they can track the inventory level in real time and seek new opportunities to
minimize waste (SAP, 2021). Real-time monitoring can help mitigate disruption risks, as well.
For instance, the Suez Canal was blocked in March 2021 as the Evergreen Ship became stuck.
This Canal is home to about 12% of the global shipping, and the disruption caused by this
blockage led to more than $10M loss per day for the Canal and more than $7B loss per day in
trade (Fan, Yang, Wang, & Marsland, 2022; Michaelson & Safi, 2021). For disruptions of this
magnitude, companies with real-time tracking capabilities are much ahead in risk mitigation
as not only could they reroute their shipment well ahead of time, but also prepare the
associated parties of the impact and delays, reducing the risk and providing ample time to
make way for alternatives.
In addition to improving operations through advanced technologies, visibility between
supply chain partners is essential for offering the best value to the customers. Lamming,
Caldwell, Harrison, and Phillips (2001) define visibility as “the two-way exchange of
information and knowledge between customer and supplier”. Kalaiarasan, Ravi, Jan, Kumar,
and Wiktorsson (2022) summarize the benefits of visibility as improved agility and flexibility,
enhanced decision-making, increased planning capabilities, better risk management, higher
profit levels, reduced inventory cost and sustainability. Scottish Courage, a brewing company
in the United Kingdom (UK) implemented RFID technology and was able to reduce the
number of kegs losses by half; and container cycle time by four days, which led to reduced
inventory levels (Wilding & Delgardo, 2004).
 In our survey, we ask questions to participants to learn how important they view these Digitalization
technology and capabilities, and use analytical and empirical tools to draw insights into their of operations
responses. Ultimately, our goal is to shed light on where industry is in terms of digitalization.
and supply
chains
2.3 Methods for examining the association between survey responses
Based on the survey responses, to understand the associations between the variables, we
calculate Cramer’s V values and perform hypothesis testing. Cramer’s V values represent the
relationship between categorical variables. Similar to the correlation coefficient, it takes
values between 0 and 1, and the closer it is to 1, the stronger the relationship is.
In terms of hypothesis testing, we use Whitney-Mann u-test, which is suitable for ordinal
or count scale (Weathington, Cunningham, & Pittenger, 2012). Naghshpour (2016) provides
characteristics of this test as follows: It does not require the distribution functions of the
populations to be normal unlike the t-test. Another advantage of this test compared to the
t-test is that it can be used when the sample size is small. The null hypothesis of the test states
that the two populations have the same distribution. Since our data set includes variables that
are ordinal or categorical, Whitney-Mann u-test is appropriate. Furthermore, we use the z-test
for proportions as additional analysis to confirm the results.

3. Methodology
In this section, we present our survey design, administration process and a number of
hypotheses to analyze. Then, we provide a descriptive summary of the sample data, which
provides details about the participant background and characteristics.

3.1 Survey development and administration

To share the views of operations and supply chain practitioners about the emerging
technology and capabilities we summarize in Section 2, and identify the biggest barriers that
the organizations are facing in a digital transformation process, we conducted an online
survey of 183 professionals between the last quarter of 2022 and third quarter of 2023. The
sample size is consistent with the other similar survey studies such as Wang and Wei (2007),
Son et al. (2021), Mubarik et al. (2021). To collect responses, we reached out to the participants
individually. The participants are employed at various scales of organizations that are
located in North America, Europe and Asia, and we did so to ensure a diverse set of responses.
As mentioned before, we picked the technology and capabilities in our survey questions
based on the emphasis on them in the literature as listed in studies such as Olsen and Tomlin
(2019) and Lyall et al. (2018).

3.2 Measurement
To hear the professional’s voice and provide insights into the current status of operations and
supply chains, we directed questions to the participants about which emerging technology
and capabilities that we present in Section 2 are most important from their perspective.
Although some of these are interconnected (e.g. IoT can allow traceability, visibility, real-time
monitoring capabilities) and the list includes both technologies (e.g. blockchain) and
capabilities (e.g. visibility), we included them together to examine the practitioners’ reactions.
This is because, for example, leadership may want to invest in real-time monitoring
capabilities and may not be familiar with the details that enable it. A consultant, information
technology (IT) or OM team member may be familiar with what type of IoT tools are a best fit
for their organization to create real-time monitoring capabilities. From an organizational
standpoint, we asked whether their organizations started digitalization and if so, how much
progress they have made.
DTS Most of the survey questions are in the form of multiple-choice or follow a Likert scale. For
multiple-choice questions, we also gave an option to enter a new answer if none of the choices
are a good fit for the participant. In addition, we directed open-ended questions to use in our
text analysis. For example, we asked what barriers the companies face when it comes to
digitalization projects, and what type of data and information would be the most crucial to
have access to in real-time. Finally, we asked questions to identify the experience level,
current role and functional area of the participants as well as the company profile (e.g. digital
maturity, annual revenue) at which they are employed.

3.3 Sample
Our sample mostly consists of executives, managers, consultants, analysts, engineers, and
research scientists. About 8% of the participants have more than 20 years of experience; 17%
of them have 11 to 20 years; 30% of them have 5 to 10 years; and 45% have less than five
years of experience. In addition, about 62% of the participants are employed at organizations
that have some level of digitalization within their operations, and the others are either
exploring possibilities or in the process of implementing (about 34% of the participants are
employed at organizations that started transforming their operations and are in the
continuous improvement phase, about 28% work at organizations that are in the
implementation and deployment stages, and about 23% of the respondents indicate that
their organizations are in exploring and evaluation stages). About 70% of the professionals
we surveyed responded that they are very familiar with the benefits of digitalization. While
about 12% indicated that their familiarity is limited, the remaining 18% said that they are
somewhat familiar. We find this encouraging in terms of the audience we picked for our study
who can give us insightful responses towards the current status of the industry, and
importance of digitalization.

3.4 Hypotheses
To understand how participants with different characteristics view the importance of the
technology and capabilities we present in Section 2 and answer Research Question 2, we
develop hypothesis tests. Specifically, we test if responses vary based on the experience level
of the participant, whether the participant holds a leadership role and the financial position
(e.g. annual revenue) of the organization they are employed at. We picked the experience level
because we wanted to examine if there is a difference in responses between less experienced
and more experienced professionals. More experienced participants might have been
employed at a larger number of organizations in the past and have faced different challenges
of various scales. Less experienced ones may not have had as much time in practice, but may
have more familiarity with technology and digitalization. To explore this question, we
develop the following hypothesis:
H1. Ratings for a given option (visibility, analytics, blockchain, monitoring, automation,
3D, IoT) differ based on the experience level of the professionals.
The role or position of the participants can impact the response they provide for the survey
questions, as well. Specifically, at the leadership level, priorities can be different compared to
other roles. For example, an operations manager may have different priorities or problems to
solve than a consultant. An executive may be interested in larger scale outcomes, whereas an
engineer may be working to improve the production processes. To test if there is a difference
in ratings between leadership and other roles, our hypothesis is:
H2. Ratings for a given option (visibility, analytics, blockchain, monitoring, automation,
3D, IoT) differ based on whether the professional is in a leadership role.
Finally, participants who are employed at organizations with more (financial) resources may Digitalization
have more experience using technological advances in OM and SCM, which may impact their of operations
responses. For example, because blockchain applications in supply chains is still fairly new, it
is possible that only organizations with more financial resources might have made
and supply
investments in it. If a participant’s organization has invested in a blockchain technology, they chains
may have experienced its benefits and can comment on it accordingly. On the other hand, if
their organization has not used blockchain, they may not rate it highly due to the lack of
successful use cases. To test whether this is the case, our hypothesis is:
H3. Ratings for a given option (visibility, analytics, blockchain, monitoring, automation,
3D, IoT) differ based on the annual revenue of the organization in which the
professional is employed.
We analyze and discuss these results of these hypotheses in Section 4.4.

4. Empirical results and insights

In this section, we answer the research questions and test the hypotheses from Section 3,
understand which technology and capabilities are viewed as most important, and examine
the association between the ratings using Cramer’s V values and hypothesis testing.

4.1 Identifying the most important technology and capabilities based on survey responses
When answering Research Question 1, we provide descriptive analysis on the ratings that
participants provided on the survey questions. As mentioned previously, we followed a five
point Likert scale, and for the purposes of descriptive analysis, we converted responses into a
more condensed form as follows: We categorized responses “4” and “5” (out of 5) as “strongly
agree”, “2” and “3” as “somewhat agree”, and “1” as “strongly disagree”. Similarly, for
questions that ask the participant to rate the importance of a given option, a “4” or “5” would
then correspond to “very important”. Table 1 summarizes the percentage of responses that
rate the given option as very important. Based on this table, data analytics and real-time
monitoring are regarded as the most important aspects of digitalization: Approximately 89%
of the respondents rate data analytics and 84% rate real-time monitoring very important for
their organizations. Following these, supply chain visibility and automation were rated as
very important by 78% and 76% of the professionals we surveyed, respectively. On the other
hand, we find it surprising that blockchain technology and 3D manufacturing are not rated as
one of the most important technologies in our survey (34% and 25% of the participants rating
them very important) although they offer many benefits for organizations. For both 3D
manufacturing and blockchain, the reason for low preference can be the lack of information
about these technologies. While we acknowledge that these terms are becoming more and

Item Percentage of “very important”

Data analytics 89%

Real-time monitoring 84%
Supply chain visibility 78%
Automation 76% Table 1.
IoT 60% Summary of responses
Blockchain 34% about the importance
3D manufacturing 25% of emerging tools and
Source(s): Table by author technologies
DTS more popular, it is possible that their business use cases are not clear to professionals. We
believe that as there is more awareness about these topics as well as their contributions for
organizations (as we aim in Section 2.2), supply chain leaders will start investing in them and
take advantage of the benefits they offer.
To further investigate the the top two results from Table 1, we look into the characteristics
of the participants who rated them as very important. Within the group of participants who
picked data analytics as very important, about 29.45% are managers, 22.09% are
consultants, 17.79% are analysts and 17.18% are in an executive position. For these
participants, the next highest rated options are real-time monitoring (average of 4.39 out of 5)
and supply chain visibility (average of 4.32 out of 5). On the other hand, about 33.33% of those
who picked real-time monitoring as very important are managers, 22.92% are consultants,
20.83% are analysts, and 15.97% are in an executive position. These practitioners also value
data analytics very highly with a mean of 4.48 out of 5, and the average rating for supply
chain visibility is 4.33. The next highest rating is for automation, which is about 4.29 within
this group of participants. These results indicate that having access to real-time data and
being able analyze it are the top priorities for those who are actively involved in the decision-
making process.

4.2 Identifying the association between participant characteristics and responses

To answer Research Question 2, one of the methods we implement is a correlation analysis
using Cramer’s V values. As mentioned in Section 2, Cramer’s V provides a range of values
between 0 and 1 similar to the correlation coefficient, but it is for categorical variables.
Figure 1 summarizes the results in which lighter colors represent stronger relationships. For
example, the strongest association exists between responses for blockchain and 3D
manufacturing. Relationships between visibility and data analytics, real-time monitoring and
data analytics, visibility and real-time monitoring, and automation and analytics come next.

Figure 1.
Cramer’s V matrix
representing the
correlation between the
variables of the data set
4.3 Hypothesis tests Digitalization
In this section, we examine the relationship between the variables of our data set by using of operations
hypothesis testing at a significance level (i.e., α) of 0.05. More specifically, we analyze if there
is a change in responses based on (1) the experience level of the participant (Hypothesis 1), (2)
and supply
whether the participant holds a leadership role or not (Hypothesis 2) and the financial position chains
(e.g., annual revenue) of the organization they are employed at (Hypothesis 3).
For Hypothesis 1, the Whitney-Mann u-test results are in Table 2. Based on this table, we
find that visibility ratings can vary depending on the experience level of the professionals,
and more specifically, the proportion of those who view visibility very important is higher
within the group of participants with more than 10 years of experience. For Hypothesis 2, we
can observe that there is no evidence to conclude that responses vary between leadership and
other roles at an α level of 0.05. Finally, analyzing Hypothesis 3, the same conclusion can
be drawn.
For the analyses that Tables 2 through 4 present, we also perform a z-test for proportions.
Before doing so, we calculate the required sample sizes for effect size values of 0.2 and 0.5 with
power 5 0.8, where effect size represents the magnitude of the effect relative to the total
variation in a data set, and statistical power is the probability of rejecting the null hypothesis
when it is indeed false. Although our sample size is not sufficiently large for an effect size of
0.2, it is for an effect size of 0.5, which is considered a medium effect size. The test results are
consistent with the ones that Whitney-Mann u-tests produce.

4.4 Barriers to digitalization and most needed information

To answer Research Question 3, we perform text analysis on the participants’ responses to
understand the possible reasons for not digitalizing operations, or not achieving a desired
level of digital maturity. Toward this end, in our survey, we asked the participants what
barriers their organizations are facing in terms of starting their digital transformation or

Variable p-value

Visibility 0.031
Data analytics 0.541
Blockchain 0.298
Table 2.
Real-time monitoring 0.051
Whitney-Mann u-test
Automation 0.504 results for response
3D 0.482 differences based on
IoT 0.170 experience levels of the
Source(s): Table by author participants

Variable p-value

Visibility 0.152
Data analytics 0.818
Blockchain 0.163
Table 3.
Real-time monitoring 0.276 Whitney-Mann u-test
Automation 0.473 results for response
3D 0.769 differences between
IoT 0.251 leadership and
Source(s): Table by author nonleadership roles
DTS increasing its scale if they have already started the process. Table 5 summarizes the top five
reasons the respondents shared.
Based on the responses, cost and failing to obtain stakeholder buy-in due to lack of
business case objective are the top two reasons. While we find the concern about cost
expected, we believe that there is evidence in practice that proves otherwise as we discuss in
Section 5. Lack of evidence to provide its benefits for the organization, and not knowing
where to start are also significant reasons for not pursuing digitalization. In the next section,
we share our recommendations based on industry experience to guide organizations in
overcoming these difficulties and presenting business use cases demonstrating the benefits
of digitalization.
In terms of what type of information is the most important that the participants wish to
have access to, our text analyses lead to results aligned with the summaries we provide in
Table 1. We look for groups (specifically, composed of two words), and the ones with the
highest frequencies are “real-time” and “inventory levels”. When analyzing text with three
words, “real-time visibility” and “real-time data” have the highest frequency “inventory
levels”, and ”demand amounts” are the information that are listed by most participants. As
Table 1 identifies real-time monitoring as one of the most important capabilities for the
participants, we believe that these results are not surprising.

5. Recommendations to practitioners
In this section, we provide guidelines to practitioners to (1) start digitalization in their
organizations and (2) make progress in the transformation process if they already started.
Digitalization requires various steps and projects for organizations to successfully
complete. First, all departments and stakeholders should be on board. If there are
departments or team members that question the need for transformation, this can cause

Variable p-value

Visibility 0.882
Data analytics 0.200
Blockchain 0.576
Table 4.
Real-time monitoring 0.441
Whitney-Mann u-test
results for response Automation 0.115
differences between 3D 0.137
companies of different IoT 0.625
annual revenues Source(s): Table by author

Percentage of the participants who listed the factor

Factor as a barrier

High cost 44.81%

Unable to get stakeholder buy-in due to lack of business 30.60%
case objective
Lack of evidence to provide its benefits for the 25.14%
Table 5. organization
Top five reasons for Not knowing where to start 15.85%
not starting Lack of infrastructure 10.38%
digitalization Source(s): Table by author
delays and possibly lead to a failed project at the end. This argument is also supported by the Digitalization
study of Lai, Sun, and Ren (2018). Second, the organizations should start small. Undertaking of operations
big projects without much digital maturity does not promise success. Furthermore, as our
survey indicates (see Table 5), cost is a big barrier that stops organizations from transforming
and supply
their operations. The first and second steps combined can help address these concerns and chains
convince the stakeholders about the benefits that could be gained through this investment.
Third, necessary tools and software should be implemented. This may include purchasing
products from leading providers, or building in-house systems. Again, as cost is a factor that
can raise concerns, we provide examples about how there can be solutions that can be
obtained by smaller budgets. In the next subsections, we detail these three steps.

5.1 Stakeholders must be fully on board

As Table 5 of our survey results demonstrates, one of the reasons for failing to start
digitalization for organizations is the lack of stakeholder buy-in. Organizations must invest
time in ensuring that all stakeholders are fully on board and understand the purpose of the
transformation. This is the most crucial step, as the digital transformation journey is not a
one department task; it requires a holistic and collaborative approach. Outlining the
benefits such as additional profit and/or savings that each department can make, along
with case studies and success stories of those that transformed their operations can be
some approaches to convince the stakeholders. Clearly defining the business challenges
that the organization is facing, identifying key performance indicators (KPIs) and
measuring the progress through data and software output are also important steps. For
example, having answers to questions such as “How does the inventory management
software implementation help the organization reduce slow-moving stock keeping unit
(SKU) safety-stock levels?”, or “Will this transformation allow the organization to use
available capacity to stock higher levels of fast-moving SKUs and better serve customers?”
can be a way to achieve this.

5.2 Starting small is key in digitalization

As an organization considers transforming their operations, starting small is the way to
success. For example, it could be as small as automating a dashboard that shows the up-to-
date inventory level, or generating a report to view defective productions. While the IT team
still takes the lead in the implementation and integration phases, leadership team has an
important role in defining the workflow, reinforcing the links back to the business case(s),
performing validation and providing feedback. Starting off with a pilot project allows
organizations to get a gauge on the level of interest associated with a digitalization project as
well as stakeholders’ understanding of the end goal, importance and level of continuous
cooperation that is necessary for the success of the project. This also gives organizations
critical insights in preparing for larger scale projects. In addition, convincing the stakeholders
about how a larger scale digitalization project benefits the company can be less challenging
with a successful pilot project.

5.3 Software and technology help start Digit(al)ization

There are challenges that companies face when it comes to digitalization as we present with
our survey in Section 4. Perhaps, the most concerning of these is the lack of a digital platform;
there are still companies that don’t store data digitally. For some organizations (i.e. mostly the
ones with low maturity levels Ad Hoc and Defined based on Table 6), this may be addressed
with a simple software such as Microsoft Excel to store data. This way, the organization has
the ability to analyze past data to draw critical insights. As we share in Table 5, high cost
DTS perception about digitalization efforts is the number one barrier for companies. However,
there are low code or no code platforms that can transform physical operations into a digital
environment without being too costly. These platforms can provide real-time access to
internal operations and be used to produce insights to improve the processes. The “Low-code
and No-code” team at Deloitte states that these platforms can provide companies with
innovation and speed in marketing, rapid prototyping, “fast-fail” capabilities, improved
efficiency of processes and workflow automation (Deloitte, 2021). In addition to low-code and
no-code platforms, using supply chain business-to-business (B2B) software and platforms
can bring in the desired visibility between the partners. These are especially well-suited for
large organizations or companies with high maturity levels (Integrated or Extended). Leading
software companies such as IBM and SAP provide these services that enable real-time
monitoring, end-to-end visibility, AI driven decision-making and effective management of
disruptions.
Although there are key steps that any given organization needs to follow as we outline in
Sections 5.1 through 5.3, we believe that a one-size-fits-all approach is not appropriate for a
digitalization project. In addition, digital transformation is an incremental effort rather than a
one-time project. As businesses gain proficiency within each stage, their operations and
supply chains become better-equipped to meet the demands of today’s complex, networked
and global business environment.

5.4 Business use cases

In this section, we present two case studies based on primary data derived from real-life
experiences. One of these organizations is a beverage store and the other is a therapeutic drug
manufacturing and distribution company. For both organizations, the cases we present are
based on observations, interviews and data collection. We picked these two businesses to also
demonstrate how digitalization can be a different journey for low and high digital maturity
organizations.
Although digital transformation is inevitable for any organization, we believe that it will
be a different process for different organizations. Smaller firms may have a completely
different journey than that of larger ones. However, the size of an organization may not be a
determining factor to assess the pace of digitalization: It is necessary to assess the digital
readiness to understand the unique requirements of the transformation projects. The “digital
maturity level” can be a more suitable measure, which represents the readiness for the
transformation. According to Lockamy and McCormack (2004), the maturity model for
companies can be broadly categorized in five, which are Ad Hoc, Defined, Linked, Integrated
and Extended (see Table 6 for details). In this paper, we aim to shed light on how
organizations with different maturity levels can start this transformation through case
studies.

Maturity level Characteristic

Level 1: Ad Hoc Lack of structure and clearly defined process activities

Level 2: Defined Communication exists between silos or departments in the organization, but
there are no connections between them
Table 6. Level 3: Linked Clear lines of communication and collaboration exist, decisions are made
Summary of maturity unanimously
levels for organizations Levels 4 and 5: Integrated and
Collaboration within and between companies is on the highest level
based on Lockamy and Extended
McCormack (2004) Source(s): Lockamy and McCormack (2004)
5.4.1 A beverage store. This is a small organization that can be classified as in Level 1 or Level Digitalization
2 maturity (i.e. Ad Hoc or Defined) with approximately 500 employees. It used to run on a pen- of operations
and-paper-based process with no digital systems in place. Although this store didn’t have
much competition about 35 years ago when they first opened, over the last decade, this has
and supply
changed. It is now vital that the store has a sound operation policy to keep their costs down. chains
Decisions about business parameters and KPIs were all made based on past experience and
intuition of business owners. Though the business was projecting increased revenue, there
was significant profit leakage. The lack of a proper (digital) system made the integration
within and between partners more challenging. There was no visibility into the operations or
the supply chain, thereby providing no opportunity for collaboration or improvement.
Step 1 - Starting Small: The first action for this organization was to start digitizing their
data collection process because the existing method was not efficient. As we outlined
previously, getting all stakeholders on board is essential (Step 2 of digitalization) and
demonstrating the impact of how transitioning from manual data tracking to a computerized
approach is a simple and effective way to convince them. With this digitization, the company
was able to start analyzing their data. For example, one of the business challenges they were
facing was the presence of a large amount of inventory, which means cost and need for
additional space for storage. Data analysis allowed the organization to identify and remove
obsolete SKUs, generate more accurate counts of safety stocks, and reduce the overall holding
cost by about 18%. This generated working capital to utilize and was helpful to convince the
stakeholders. In addition to the financial aspects, the ability to maintain day-to-day records in
an organized way enabled opportunities for collaboration with potential vendors and
optimizes their processes.
Step 2 - Stakeholder Buy-in: In terms of logistics, the company owned their own trucks. The
consultants proposed that by leveraging a third-party logistics (3PL) company and moving
away from owning trucks, the business could generate up to 28% in cost savings. These
savings included items such as driver salaries, truck service and maintenance, and
depreciation of the trucks. Furthermore, by outsourcing to a transportation company, the
team was able to gain real-time visibility into the movement of the products. With data-
backed evidence, the consultants were able to convince the business stakeholders and the
company was keen on investing in technology and systems to digitalize their operations.
Step 3 - Software Implementation: For this organization, the consulting team evaluated
various systems and decided that the best suited for this business was an enterprise resource
planning (ERP) system that integrates well with Microsoft Excel, generates end of day report
documents (such as a PDF file), includes business intelligence tools to visualize the data, and
offer capabilities in inventory and warehouse management. Finally, the consultants
suggested creating a fully customized tool with barcode and RFID enabled capabilities to
fully automate the processes. Since this is a small enterprise with a limited budget, the team
recommended a low-code/no-code application for system customization.
5.4.2 A therapeutic drug manufacturing and distribution company. This organization has
been operating for over four decades with some level of stability and digital maturity (Level 2
or Level 3). In the past, the management team made attempts to integrate ERP systems for
digitalization and enable collaboration for improved decision making. However, the
implementation was not successful and the software didn’t meet their expectations. For
example, a data entry corresponding to a doctor (i.e. a customer for this company) could be
duplicated in the system to represent two separate entities. Sales representatives started
projecting fake or duplicate medicine sales and customer acquisition in order to gain extra
commissions. Once the lock-in period expired, the company had to send the unsold medicine
back to the supplier if they hadn’t already expired. The system had key flaws, which led to
lost profits for the company.
DTS Step 1 and Step 2 - Starting Small and Stakeholder Buy-in: Since this company was more
digitally mature and had a unique business challenge, the “starting small” step looks different
compared to the beverage store. The main obstacle was about convincing the stakeholders
who lost confidence in digital systems due to the negative experience with the previous ERP
software provider. The “real” first step for digitalization for this organization was to define
the business challenge and set objectives. Then, by clearly defining the KPI and determining
a performance measurement method, the consultants aimed to demonstrate the value that
digitalization can bring to them. Table 7 provides the actions taken to obtain stakeholder
buy-in.
In the example that Table 7 presents, the sales commission is the KPI to which having
visibility is critical. The consultants made a case that the system could help identify
observations with extremely high or extremely low commissions, which would prevent
fraudulent activities. They could achieve this through digitalization, which allows collecting
large amounts of KPI data. This systematic approach was successful to convince the
stakeholders to pursue and invest in a digital system.
Step 3 - Software Implementation: After thorough review of the supply chain and setting
up stringent processes in place, the stakeholders decided to replace the existing ERP system
with a more tailored system to bring ease of implementation and increased support. After
several rounds of request for proposals (RFPs) and request for quotes (RFQs), the
organization decided to work with SAP as their end-to-end (E2E) implementation partner.
This brought the necessary digitalization as well as subject matter expertise, which were both
important to obtain stakeholders’ approval.
In summary, considering these two business use cases, we want to emphasize that our
recommendations are designed to be adaptable to various business scenarios and are not set
in stone. Organizations should tailor these recommendations in a way that they align with
their specific needs, challenges and goals.

6. Concluding remarks
Sooner or later, companies operating in a supply chain will become (more) digitalized to meet
customer expectations. According to a report released by the World Economic Forum in 2022,
the top four most digitally mature industry groups are semiconductors, electronics and
pharmaceuticals, energy and chemicals. These industries are typically large-scale industries
with high digital maturity. This report presents that, over the last three years, logistics
industry has made progress to claim the fifth place, mainly due to two factors: Growth of
online shopping and the emergence of e-commerce leaders such as Amazon, Alibaba and
JD.com. With COVID-19 further fueling online shopping globally, digital transformation of
the logistics industry is expected to accelerate in the coming years (World Economic Forum,
2022). We believe that this trend is going to impact operations and supply chains, which
forces organizations to transform their operations.
In this study, we conduct a survey on 183 industry practitioners to understand their views
and opinions about digitalization. The sample data includes executives, managers,
consultants, analysts and other related professionals in the field. Based on the analysis,

Business challenge Sales representatives make unearned commission due to a lack of system visibility
Table 7. KPI to measure Sales commission made by sales representatives, categorized by doctor and region
An example for linking KPI measurement Unique identifier to be assigned to individual sales representative, doctor and sales
business use cases method transaction
to KPIs Source(s): Table by author
data analytics and real-time monitoring are viewed as the most important tools and Digitalization
capabilities by the participants: About 89% of the respondents’ rate data analytics and 84% of operations
rate real-time monitoring very important for their organizations. Supply chain visibility and
automation are the next two highest rated technology and capabilities (by 78% and 76% of
and supply
the professionals, respectively). Blockchain and 3D manufacturing do not appear to be chains
viewed as highly important technologies in our survey. An explanation for this can be the
lack of information and successful business use cases of these technologies. We believe that
as studies like ours become more widely available, this trend will change and companies will
invest in technologies to digitalize their operations.
To identify the relationship between the survey responses, we present Cramer’s V values
and hypothesis tests. Based on Cramer’s V values, the strongest association exists between
responses for blockchain and 3D manufacturing. Relationships between visibility and data
analytics, real-time monitoring and data analytics, visibility and real-time monitoring, and
automation and analytics come next. Based on the hypothesis tests, there is no evidence to
conclude that rating responses vary between leadership and other roles for the technology
and capabilities we asked about. The same conclusion is true in terms of the annual revenue
of the organizations. We also find that visibility ratings can vary depending on the experience
level of the professionals. The proportion of those who view visibility very important is
higher within the group of participants with more than 10 years of experience.
To understand the main barriers to digitalization, we examine the survey responses using
text analytics and find that cost, failing to obtain stakeholder buy-in, and lack of evidence to
provide its benefits for the organization are the top factors. Taking these results into account,
we provide recommendations to practitioners that outline a successful path to digital
transformation: We believe that starting small, focusing on stakeholder buy-in with a
systematic approach, and implementation of software are the three steps the organizations
must follow. We make a case that this transformation may look different for different
organizations, and a one-size-fits-all approach is not appropriate. Our case studies
demonstrate real-life applications of these steps for small enterprises compared to large
organizations.
Future research can extend this study to new implementations of the proposed steps in
various organizations. Examining the KPIs, cost savings and profit improvements can
demonstrate the value added through digitalization. Further collaborations between
academia and industry can increase awareness in digitalization. Specifically, applications
in different industries can expand on our case studies and help organizations convince the
stakeholders about the value that digitalization brings. Other tools and technologies such as
AR, virtual reality and generative AI can be explored, as well.

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DTS Supplementary
material

Survey questions
(1) What is your current professional title? If “Other”, please type your title in the space
given below.
 Executive leadership (VPs, CXO’s, directors)
 Manager
 Consultant
 Analyst
 Other
(2) How many years of experience do you have in operations and/or supply chain management?
 Less than 5 years
 5 to 10 years
 11 to 20 years
 More than 20 years
(3) Which of the below best represents your function?
 Procurement/Purchasing
 Supply/Demand Planning
 Operations
 Sales/Marketing
 Strategy
(4) What is the revenue ballpark for the company you are currently employed at?
 Less than $10M
 $10M - $50M
 $51M - $100M
 $101M - $500M
 $501M - $1B
 Greater than $1B
(5) How familiar are you with the benefits and impact of digital transformation for organizations?
 1 (not at all) through 5 (highly familiar)
(6) In your opinion, on a scale from 1 to 5, how important are the below benefits of digital
transformation for organizations? 1: least important, 5 most important.
 Supply chain visibility
 Data analytics
 Blockchain
 Real-time monitoring
 Automation
  3D printing Digitalization
 Internet of Things (IoT) of operations
(7) Where is your organization in the digital transformation journey?
and supply
chains
 Exploring and setting (developing the use case, Return on Investment (ROI), stakeholder
views and sign off)
 Evaluation (pilot departments, budget, capital, project owners and timelines)
 Implementation and deployment
 Implemented and in continuous improvement phase
 Not pursuing at the moment
 Other:
(8) What would be the biggest barrier for your organization to start digit(al)ization or increase the
scale of the existing digitization? Please check all that apply.
 High cost
 Unable to get stakeholder buy-in due to lack of business case objective
 Lack of infrastructure
 Not knowing where to start
 Lack of evidence to provide its benefits for the organization
 Other:
(9) Open ended question: In your opinion, what type of information would you need access to in
real-time to improve supply chain performance?
Source(s): Supplementary by author

Corresponding author
N. Orkun Baycik can be contacted at: [email protected]

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