How to hack your supply chain: principles of digital leadership

As global enterprises encounter one unexpected disruption after another, supply chain management has gone from understudy to the leading actor. However, whether supply chains—and supply chains themselves—are ready for their new starring role is the key question.

Most global supply chains were designed and built decades ago. They remain lumbering monoliths designed to maximize cost savings at the expense of resilience, efficiency, and security. More importantly, they are not digital; instead, they are running on technology from the 1990s, spreadsheets, and human grit.

Redesigning them is imperative for organizations that want to thrive in this new era. To do so, supply chain leaders need digital expertise and AI fluency. They must become digitally savvy superstars prepared to perform on a global stage. But how?

Transforming supply chain leaders into digital leaders starts with understanding the what and how of your company’s digital—or not-so-digital—processes. Then, you can implement practical principles that allow your suppliers, customers, and employees to benefit from digital advancements while mitigating risk.

Asking the right questions

A digital organization uses technology to manage crucial aspects of its supply chain, including third-party suppliers. When used effectively, digital tools can simplify the latter, improving your third-party management and increasing your supply chain resilience. However, you have to consider how third parties will use these tools. Ask the following questions:

• Is the technology too complicated? Most technology fails because it is too complex. Users rarely use hard-to-navigate or hard-to-understand technology. This is especially true for suppliers.
• Is it adaptable? We should make it easy (and self-service) for suppliers to integrate into our systems and offer them help if they need it. If it takes six weeks to integrate a single supplier into our systems, we’re doing something extraordinarily wrong.
• Am I properly incentivizing my third parties to participate? Is there a benefit to the third party? For example, perhaps you offer better payment terms to suppliers who use the system. If there is a benefit, highlight it. If there’s not, just stop the initiative.

Digital leadership principles

Driving digital change is no small feat, especially across large, global organizations with complex supply chains. Employing these key principles can accelerate the transformation and make your digital initiatives more successful:

• Automate, automate, automate. And if you can’t automate it, make it self-service.
• Start with smaller projects that deliver big value. While this sounds exceedingly basic, fixing a customer visibility issue, a production downtime issue, or an employee onboarding issue will create 10 times the goodwill of any big project.
• It’s all about the common core platform. Build on an advanced stack (like AWS/Azure/GCP) with a strong data foundation. Use the libraries provided by the cloud provider to build bespoke solutions and augment those with the relevant point solutions.
• It’s all about multi-enterprise collaboration. The most significant risks come from your third parties. The greatest ESG opportunities come from your third parties. The most inefficient parts of your supply chain come from your third parties.
• Break artificial organizational constructs. The most extensive enterprise needs (UX, risk, ESG, innovation, and so on) don’t fit in silos anymore. For example, consider customer experience: they want a quick and easy way to purchase, receive, and return their item, all with status updates and provenance information. That objective alone crosses many different systems (sales, ERP, 3PL, and countless others), but the customer doesn’t care.
• Digital is something you do. You don’t learn digital from a learning management system (LMS). LMS programs are a sign of digital immaturity, the quintessential check-the-box exercise. You need the motivation to learn, experiment, and ask for help. Anyone can learn anything on the Internet if they have the motivation and are willing to put in the time.
• Fund digital projects like a venture capitalist. Project funding should be contingent on progress (like VC stages).

The human aspect

If digital is something you do, then part of that “doing” involves infusing a culture of digital in the humans that work for your organization. You can do that by:

• Motivating your employees to operate digitally. Asking employees to cut and paste information is a clear communication that you do not value them. Asking employees to use an archaic web-based tool that was designed in the early 2000s is a clear communication you do not value them.
• Leading by example. Make sure you use the same tools as your employees because if you are frustrated, they are too. If you pioneer the use of new tools or techniques, then people will follow.
• Getting your current people comfortable with digital. There are two sides to this issue. On the one hand, you need to convey that everyone has an opportunity to make the journey (and if they don’t, tell them). On the other, if they don’t make the changes and progress in their learning, then you have to move on.
• Hiring different profiles. The entirety of human knowledge is at our fingertips. We have tools that code applications, write essays, and solve mathematical or engineering problems. Therefore your team needs to have a different set of profiles and experiences.
• Creating open-ended initiatives. Give people projects that engage the brain, stimulate creativity, and require critical thinking skills.

Building resilient supply chains requires digital tools, and that means you need digital leaders within operations. You can learn more about principles of digital leadership and how they can improve and strengthen your supply chain via my latest book, How to Hack Your Supply Chain: Breaking Today, Building Tomorrow .

This article was written by Elouise Epstein and sent as part of a monthly perspective Kearney shares with our clients on the bigger trends unfolding across the operations landscape.

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Elouise Epstein is a digital futurist and 科尔尼 partner based in San Francisco. She has more than two decades of experience working as a trusted adviser with clients to develop digital procurement and supply chain strategies.

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