Five Keys to Unlocking Value From Your Supply Chain Investments
While supply chains represent the core of any product-centric business’s ability to operate, IT investment strategies associated with them are too often need based - focused on addressing issues or constraints, or, tactically focused on functional improvements that are limited in context. The project based approach to budgeting often fails to achieve the broader opportunities available, and too often fails to deliver sustained value as the teams that implement the solutions move onto other projects and leave no one to maintain or nurture the capabilities.
With our approach, the Supply Chain Transformation Advisory Partners (SCT-Advisory), works with our clients to introduce cultural standards by focusing attention on processes that encourage consideration of the broader ecosystem while building a vision for a harmonious, resilient, and optimized digital supply chain. Below are five key behaviors that we aspire to introduce to our customer base as they embrace their transformations that will help unlock the value of a digital supply chain to their stakeholders.
1. Evangelize the alignment of your supply chain strategy to your business strategy.
The acceleration of disruption to traditional business models has accelerated even further as we look beyond Covid and consider competition in the new normal. How to connect with your customers and manage the distribution of your product to meet expedited service level expectations is a question that may determine the survival or prosperity of your organization in the years to come.
Not only must we consider how we can expedite the fulfillment of product in a buy anywhere environment, we must consider where our investments will differentiate our products and services, and where we can leverage suppliers, carriers, customers, and even competitors to supplement capabilities in the interest of pleasing our customers. We must further leverage that broader community to provide valuable insights allowing a higher level of resiliency to demand volatility and supply chain disruptions.
Each member of your organization from planning to execution has a stake in ensuring smooth day to day operations, and can provide powerful insight into opportunities for improved visibility or tighter partnerships that leverage their competencies and available assets to provide service levels you could not achieve independently. Empowering them with a clear view to your corporate vision, strategy, and priorities will feed the flow of information and bring actionable improvements to the fore.
2. Articulate the value and vision of a digitalized supply chain.
A digitalized supply chain can be enigmatic unless a holistic view of an interoperable, intelligent supply chain is well articulated. In our highly competitive and rapidly evolving future, all team members must appreciate the urgency of key characteristics of this vision, including agility (helping to navigate shifting consumer behaviors and resulting business strategy pivots), efficiency (intelligently calibrating forecasts and optimizing execution), insight (driving predictive and prescriptive guidance from past history and physical observations), and finally, sustained value (by streamlining IT investments in line with the platform strategies that will feed into this hyper-connected, ubiquitous data landscape of the future).
At its core, a digital supply chain is the manifestation of a sound platform strategy. While the platform provides scale and acceleration within the IT landscape by concentrating effort and leveraging investment wisely, it is with the ability of the tools adopted to span across the supply chain ecosystem to read and react information, develop insights, and autonomously react where appropriate to remediate issues or repeatedly re-optimize the plans, up to the time of execution that will deliver the level of operational responsiveness and efficiency needed to keep pace with the speed of business.
Critically, this ecosystem is not one limited to the host organization’s data set. The ideal solve will come when connectivity to external business partners resources and inventory bring enough intelligence relative to the supply and cost associated so that holistic decisions can consider the comprehensive set of resources available in the market to fixate on the optimal cost and/or environment impact solution.
Commnicating a holistic vision will encourage consideration at each step from any or all stakeholders as to the incremental value that a strategic vs tactical step forward can have on the speed, scale, and value realization that would come with a potentially more expensive or disruptive investment that is more in line with a scalable foundation towards a digital future. While investments may incur more introspection, the iterations and resulting advances may bring agility, speed, or insight that will deliver a level of differentiation not otherwise available.
3. Take a pragmatic view towards incremental value through digital initiatives.
It is common to get distracted by large budget, transformational initiatives that have substantial visibility across the organization. But often, these projects fail to achieve their full value and languish without attention once the basic implementations are complete without unleashing the full potential.
We are often asked what we can do to drive incremental value from existing assets, and where appropriate, partner relationships. Exploiting digital initiatives that offer improvement opportunities by extending existing assets is the easiest and most frequently looked option available. Challenging the status quo offers great rewards and associates must be encouraged to do so.
As traditional IT roadmaps are being developed, opportunities to consider how additional value that can be achieved in areas outside of the functional workstream by providing improved visibility or insights through digital initiatives. While this can help the business case, it will more importantly ensure that the true value is being achieved in real time as you march towards the digitalized promised land.
4. Build a digital organization culture focused on collaboration across Operations and IT.
Collaborative partnership with IT always pays dividends through improved solution delivery and in turn, operational performance. Discussing successes and challenges in the day to day operation, while articulating the drivers behind the opportunities and constraints will ensure that IT investment roadmaps are aligned to business strategy (as discussed earlier), operational improvement, and IT lifecycle considerations.
While considering the importance of these exercises, it is also critical to consider the importance of a sustainable, well-supported program to ensure that these incremental improvements will be continuously leveraged. IT platforms age quickly, application expertise ages even moreso. The transition to an operating culture based on nurturing aging assets offers to not only deliver more value back to the operation, it will leave you better positioned to leapfrog the limitations in the next material endeavor in the space.
Responsibility for maintaining this focus lies across Operations and IT. Scoping appropriate support environments will ensure that this attention is maintained, and the coverage models will deliver iterative value throughout the program lifecycle. The focus is sure to reap benefits for both organizations by delivering increased value and reduced disruption.
Outside of funded projects, it is a worthy endeavor to work with application vendors and services / support partners on health checks and visioning sessions to discuss what’s happening in the marketplace as other companies are investing perhaps where you are not and realizing value that could be leveraged in your operation. Extend the cultural focus and energies beyond your organization and leverage that of your extended ecosystem.
5. A commitment to program governance
As with so many of our efforts, the key to ensuring value can be continuously realized from this organizational transformation lies with the ability to make the changes stick. Purposeful governance structures for all programs should include agenda items and metrics focused on innovation and digitalization. Communication is, after all, key to sustaining value as the world around us changes.
Regular two-way updates across all stakeholders (internal and external) assures that value realization can be monitored, new opportunities are being evaluated and justified, and challenges and risks that are evolving can be proactively considered and risk mitigation plans developed.
Finally, recognition of digital successes can help to generate excitement and buzz across the organization to further focus on bringing ideas to the table. As you pivot attention towards accelerating the digital journey, increasing visibility to progress will drive more ideation and innovation, and those insights will allow the vision to materialize incrementally with value-driven proof points.
