The threat of disruption and a range of market forces drove global bearings manufacturer SKF to think differently about managing its global supply chain. Building a 'digital supply chain twin' allowed the company to globalize and automate planning and 'futureproof' the business.

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At first glance, it might seem like SKF Group has nothing to worry about. With revenues of US$9 billion, we are currently the largest player in the bearings and rotating equipment market. We also have more than 100 years of history in the industry, which would make it hard, you would think, to displace us from the top of the heap.

(For more information about the company, see the related sidebar, 'Five quick facts about SKF.' ) We knew better, however. In 2015, we realized that in spite of all our past success, our supply chain was in need of a transformation. We believed that one of the first steps that we needed to take in order to modernize our supply chain was to move from having a local planning structure that occurred at the manufacturing plant to having a global, integrated planning structure. To accomplish this, we found that we needed to create a 'digital twin' of our supply chain that could enable more automation of our planning process. This is the story of our journey.

The threat Bearings may seem like a relatively simple machine element with a very specific job: reducing friction between moving parts while also constraining relative motion to only a desired amount. But in spite of that perceived simplicity, the bearing market is set for a high growth rate. According to the market research group Stratistics MRC, the global bearings market is expected to grow at a compound annual growth rate (CAGR) of 7.2 percent from 2017 to 2023. The research firm cites multiple factors behind this growth including a rising demand for ceramic ball bearings in electric vehicles and large-scale railway, aerospace, and wind power projects.

The top threats cited are cheap and fake products entering the market, along with the growing utilization of used bearings. With this level of growth potential, the bearings market is set to attract increased competition. In fact, it's not only our traditional competitors that keep me up at night these days; it's the threat of a completely new business model disrupting our market. I look at what happened over the last years in different markets: Airbnb is the world's largest housing provider, yet owns no hotels. Uber is the world's largest taxi company, yet owns no vehicles. And while these companies and many other recent disrupters are now acquiring assets, who's to say such a competitor with new ideas and a different business model won't emerge in our space, significantly disturbing our growth or even threatening our existence?