Overview
In this Supply Chain Matters technology market education blog, we address paths to supply chain digital transformation for supply chain management teams.
A known reality is that organizations will often seek different paths toward digital transformation. Pathways will include recognizing specific priorities related to business process change requirements, added agility concerning overall planning, and decision management needs among product demand and supply networks. Organizations will further have differing timing considerations in their abilities to transform business processes enabled by more advanced technology.
However, what remains prominent is that digital transformation must be grounded in more pronounced time-to-value.
Background
The year 2020 and the continuing business and supply chain disruptions that occurred because of a global pandemic have provided a considerable amount of discovery and learning for many businesses and their supply chain management teams.
The disruptions to product demand, supply and global transportation networks all occurring simultaneously provided stark evidence that existing planning and supply chain execution processes predicated on historic product demand or supply forecasting models were no longer viable. There are now realizations that constraints are constant and that disruption and the ability for supply chains to be able to pivot to meet constant business change are the new table stakes for business.
In prior commentaries related to our 2021 Predictions for Industry and Global Supply Chains, we concluded that three specific capability areas:
The need for enhanced end-to-end supply chain visibility and supply network risk mitigation,
Acceleration of digital transformation initiatives aligned with line-of-business needs, and
are each collectively likely to be a part of a good majority of multi-industry supply chain management team business process transformation and technology investment initiatives this year. They each center on an outside-in perspective for driving supply chain response, along with more predictive or what-if decision making capabilities based on real-time sensing of product demand and supply imbalances.
The reasons are obvious in that organizations that previously invested in various forms of such capabilities were better prepared to respond to the COVID-19 disruption that occurred in 2020, as well as pivot their supply networks to meet new or differing product demand streams.
Approaching the end of the first quarter of 2021, the needs in these areas have become ever more obvious. The stakes for overall alignment and added time-to-value are increasingly more prevalent.
Need for an Established Plan
With continued change and overall uncertainty occurring among multiple industry settings, and with the above noted priorities, the need for a time-phased supply chain transformation plan is obvious. Maintaining the status-quo, however, is not a likely recipe for success.
Plans must be time-phased since businesses cannot afford to risk a major disruption to the mission critical processes that supply chain or enterprise backbone applications often involve. With continued global economic uncertainty and so much dependent on the availability and administration of vaccines to vast populations, C-Suite executives remain cautious. They will tend to eschew rather large, potentially expensive and time-consuming transformational efforts.
Instead, executives seek an overall plan of transformation that can be prioritized towards specific capabilities to support needed business or profitability growth, define specific objectives and required business outcomes expected by investors.
Each phase needs to define specific objectives, expected and clearly measured business benefits, which in-turn, provides the funding and resources to move to subsequent phases. The pace of the overall transformation phases can be a function of the ability of functional and line-of-business teams to embrace each phase with an expectation that later phases will involve more condensed timing as well as increased adoption.
From a technology enablement perspective, today’s Cloud based applications and infrastructure platform offerings now provide a more flexible means for more time-phased adoption of advanced technology support capabilities. Technology providers, whether large enterprise backbone or specialty-based supply chain planning and execution, are initiating programs to on-ramp important capabilities in phased timetables and in specifically defined objectives. The new reality is that big-bang, all-in technology transformation will be more the exception during this transitionary period to the post COVID normal.
However, there remains a reality that some technology providers are not as nimble as others in their abilities to understand your particular and specific industry, business process and change management needs, and in their abilities to work more intimately with specific supply chain management teams and their business stakeholders in time-to value technology learning and adoption.
An Example
In a prior Supply Chain Matters commentary, The Digital Transformation of Capacity Planning Management, we shared the changing notions of manufacturing and production capacity management and the need for building a foundation for digital transformation capabilities in an area that typically has had more traditional planning approaches. We addressed needs for new thinking and new directions in sorting out the realities of fragmented or outdated data and eventually viewing more integrated data management as the fuel for enhanced analytics and more predictive decision-making capabilities in this area.
A further example to share can be in needs for more connected supply chain planning processes with an eventual goal toward establishing autonomous planning capabilities enabled by artificial intelligence and machine-learning technology.
An approach would consider the needs for more end-to-end, multi-tiered supply chain planning considerations, a need for unifying data in the context of cause and effect linking and determining alternative means toward more what-if decision making capabilities without a classic full optimization of all planning data. An additional need would be freeing-up time spent by planners on constantly analyzing or messaging data and rather be focused on support more what-if decision capabilities for multi-product sales and operations planning team decision-making.
Here again, Cloud based technology that sits atop existing legacy planning applications such as SAP APO provides an option for a less disruptive business process and technology adoption approach.
A specialty technology or services provider can help your organization to define the various phases toward an ultimate set of autonomous planning capabilities. It would initially include a short time-to-benefit effort for unlocking the data that already exists, flagging and cleaning-up data that would not lend itself to more predictive and prescriptive decision support needs, while linking upstream and downstream factors of data management. Subsequent phases would address streamlining the data into heuristic based cause and effect relationships and exception-based management related to areas such as capacity, inventory, resource or geo-spatial data.
Eventually, the system “learns” what a feasible plan entails, can generate risk profiles in visualized histograms to identify plans or products at-risk, projected revenues and areas requiring intervention. An overall systems architecture plan fosters unified data models and continued adaptive learning related to planning.
Added Takeaways
We continue to advise supply chain management teams to seek out technology partners that can provide proven multi-phased support efforts toward specific areas of supply chain digital transformation. Consider the option of a Cloud based layered systems approach if risk of disruption or excessive up-front cost is a constraint.
New technology start-ups like such as Expero’s Radiant Path supply chain applications software practice multi-phased time to value, along with select boutique system integration firms that specialize in supporting supply chain digital transformation needs.
Bob Ferrari
© Copyright 2021, The Ferrari Consulting and Research Group and the Supply Chain Matters® blog. All rights reserved.
