Closing the gap between information and payment flows in a digital transformation

Abstract

Companies spend significant resources on digital transformation projects that do not always meet expectations. This thesis contends that these projects fail or fall short because organizations do not consider the three fundamental flows of a supply chain; material, information, and payment. To address the issue, this thesis develops a lens to identify mismatches between material, information, and payment flows, and applies this lens to putaways and the post goods receipt process in the US Army's supply chain. The thesis identifies an increased risk of loss for putaways confirmed before physical movement could take place, and confirmations that occurred after seven days. The thesis recommends measuring putaway time as a key performance indicator and establishing a two duty-day key performance standard, which would hypothetically lead to a reduced rate of loss. With respect to the post goods receipt process, it was found that a failure to confirm goods receipt led to the creation of millions of dollars in phantom inventory and late payments. This thesis recommends allowing customers to pay for material even if intermediate digitized information flows were not confirmed. It also recommends monitoring material available to be received so that leaders can spot and address errors. By considering the three fundamental flows of a supply chain, digital transformation practitioners can achieve better results.