Since our inception as both a supply chain management industry analyst research firm and a Supply Chain Matters global-wide blog presence, we have produced and made available our annual predictions for industry and global supply chains.

The purpose of these predictions is to advise our clients and global-wide supply chain management teams as to what to anticipate in the coming year as well as areas to focus on in strategy and tactical direction, business process improvements and technology investments. These predictions and their implications become the basis of our continued research and consulting agenda in the coming year.  Feedback we have received indicates that this report often serves as a reference for many of our clients and readers.

Over the coming three weeks, we will be highlighting select portions of our ten specific 2021 predictions for blog readers.

In our prior published bog in this series, we highlighted Prediction One, The Need for Enhanced End-to-End Supply Chain Visibility. In this particular commentary we share our closely aligned second prediction.

2021 Prediction Two: Discernable Acceleration of Supply Chain Digital Transformation Initiatives but in the Context of Business-Driven Objectives.

2021 Predictions

Prediction Summary

The COVID-19 pandemic in 2020 provided stark evidence of the need for business as well as supply chain digital transformation capabilities, sometimes painfully. With many businesses continuing to have employees work from their respective residences, digital access to information and digital based collaboration tools are deemed essential and will continue to be so. Previous obstacles or change management issues were obviously put aside with the compelling need to be able to conduct business from remote locations or to rely on information in the Cloud to make informed decisions.

The massive and now ongoing preference among consumers and businesses large and small, for conducting business and selling more products online in direct or Omni-channel customer fulfillment has provided compelling evidence of the need for a supply chain digital transformation strategy.

Multiple survey data now indicates that organizations that previously invested in various forms of digital transformation were better prepared to respond to the COVID-19 disruption that occurred in 2020, as well as pivot to take competitive advantage. Thus, various desires to initiate or enhance digital transformation capabilities should be on the priority agenda.

Prior to and leading up to the pandemic, vision, culture, and workforce readiness were often cited as challenges and too often, digital transformation took on a more technology-led perspective.

New Thinking

To effectively move forward, business and supply chain leaders will focus on specific business process areas requiring digital transformation. Rather than function driven, such transformation areas will likely be line-of-business focused and prioritized in identifying the important foundational areas that will differentiate business and supply chain response to customer needs or provide added agility, efficiencies, or insights to various teams.

New thinking, at least for 2021, is that large scope big bang digital transformational initiatives will not be feasible for all but the largest and most financially robust companies. Thus, managed scope, prioritized and targeted efforts will mostly be supported in the coming year. The most important milestone for this area in the coming year is the existence and commitment to a time-phased transformation roadmap that is actively reviewed and continually assessed. We predict that many will be customer facing with continuous and synchronized planning, more agile decision-making, and targeted automation as the initial focus.

New Definitions

Transformation takes on many dimensions and it will be important for teams to have a shared understanding of specific digital supply chain capabilities along with the specific business metrics needing to be enhanced by such capabilities. These could be areas of overall competitiveness, enhanced or more responsive business planning, analytics or insights or addressing opportunistic needs for added automation and/or efficiencies in physical supply chain execution and customer fulfillment processes.

New Directions

Rather than previous aspirational efforts, the focus for 2021 and beyond will be one of outside-in driven change management leveraging the lessons and pain points of the COVID-19 disruption as a compelling call to action across the entire business. Digital transformation of processes will focus on near real-time information provided on a streaming basis as opposed to pigeonholed in specific applications.

An important direction is to shun singular functionally driven efforts, and instead focus on a business-wide transformational goal that has individual functional business process time-phased implementation milestones.

Organizations will alter their thinking of “Big Data” which originated as a technology vendor marketing term, and instead focus on “Smarter Data” which is the most essential and determinant factor to required business outcomes. Regarding long-term strategies related to leveraged use of data, consideration will be more focused on technology providers that foster open standards and API’s for data exchange among multiple businesses as well as those that feature a streaming data lake information architecture that can support multiple applications.

Additional Predictions

We predict that business and supply chain consulting firms will find lots of interest in helping organizations develop their digital transformation roadmaps and provide objective assessments as to how such efforts are garnering success in other similar or different industries.

For technology providers focused on supply chain digital transformation, those that understand that the technology buyer is senior management and line-of-business focused, and can converse benefits in that context, will garner added success in the coming year.

 

Obtaining a Copy

Our Ferrari Consulting and Research Group Advisory Report– 2021 Predictions for Industry and Global Supply Chains is now available for complimentary downloading with our Research Center. Readers can obtain a complete copy by providing some basic registration information.

In our next posting in our 2021 Predictions series, we will highlight Prediction Three- The Need for Augmented Resiliency in Global Supply Network Strategies.

Stay tuned to Supply Chain Matters by bookmarking this site.

 

Bob Ferrari

 

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