Imagining Supply Chain 2030

In preparation for the Supply Chain Insights Global Summit, I take best-read blog posts from the prior year and create a soft copy book--the Shaman's Journal. As I sign the books at the end of the event, it enables an intimate discussion with each attendee. The book signing is my favorite part of the program. The one-on-one time makes the hours-and-hours of writing and editing the book worthwhile.

As I sign the book, I ask attendees questions, "What did you learn this week? What spoke to you from the conference in the design of Supply Chain 2030?" Here, I share some answers.

 Background

I design the Global Summit to connect business and technology leaders in new ways. Designed for extreme networking, the program includes tours, table discussions, and imagining activities. I hand-pick the speakers and use new research to stimulate further discussions.

At the stage over the last week, twelve business leaders shared insights on their digital transformation journey. No two were the same, but all were making progress.

The event is costly and risky for a small firm. Personally, it is draining. As I sit down after the conference, I wonder if it is worth it. The blisters between my toes say no, but the positive feedback from the attendees fuels my belief that it is worthwhile.

Why do it? My reasoning? Repulsed by the "event model" of pay-for-play that includes sponsorships, booths, and paid speaking slots, my goal is to deliver a better customer experience. While the traditional conference format generates leads for traditional technology sales teams, the model moves us backward, not forward.

In contrast, the Supply Chain Insights Global Summit is designed for business and technology leaders to learn together as equals. There are no booths or paid speaking slots, and I never share the attendee list. My goal is to unlearn the practices from the past that have not driven value, and to ideate new answers together.

With only 4% of companies making balance sheet improvement on the metrics of growth, operating margin, inventory turns and Return on Invested Capital (ROIC), and 60% of industries slipping backwards on both costs and inventory management, I think that it is important to unlearn the practices of the past, to define the future. The focus of the conference is to define Supply Chain 2030.

The Insights

The answers to the questions from attendees as I signed the books included:

The Only Thing Constant is Change. As we face the future, the past goals of standardization and uniformity are no longer relevant. Variability is the new norm. McCain Foods spoke on a more limited supply of onions to manufacturer onion rings and the need to use analytics to reduce the 60% waste associated with the current process. McCain Foods, a large manufacturer of onion rings and french fries for the fast food industry is struggling to find enough inbound raw materials and must closely manage their value chain of agricultural growers.

As I listened, I thought of how we have managed lean and six sigma processes to minimize material variability. With more limited supply, McCain must now focus on the management of a more variable crop input. The answer? The supply chain leader must learn to dance in the world of gray when the only known is change.

Focus on Outcomes. Traditional supply chains focused on selling products. The future is about outcomes. They vary by industry. For automotive, it is a shift from selling cars to providing rides. In healthcare, it is a shift from efficient sickness to a focus on wellness and care in the home. Whereas in food and beverage, the shift is to custom diets and repositioning food as a specialized diet to drive wellness.

At the conference, Sleep Number spoke on their goal to deliver a good night's sleep. They opened the presentation sharing their "sleep number." The group laughed, but the discussion highlighted their mission of selling mattresses as a means to an end.

The overarching goal of the supply chain team is to deliver mattresses that improve wellness. The mission is improving the delivery experience by redesigning delivery, deploying late-stage postponement and automating the last mile.

Take Responsibility for Your Value Network. To build the end-to-end value chain requires ownership of the entire supply chain. This starts with knowing the customer and the supplier. (I continue to be surprised with how few supply chain leaders know their suppliers and customers.) Relationships matter.

I loved the presentation from Formlabs. Their strategy is to use supplier development techniques to produce a 3D printer at 1/3 the cost of their competition. Their tactics are simple. Buy materials at a lower grade and adapt manufacturing to embrace variation. The supply chain stretches the globe 1 1/2 times, and partners connect through a value network. Only 7% of companies have this level of value network enablement.

 Get Started. No company has a perfect starting point. Every organization has dirty data, but the group agreed don't let perfection stand in the way of progress. Even if the data is wrong, the pattern is right. Patterns don't lie.

The consensus? Get started. Communicate the journey. Clarify the "Why?" Build a Guiding Coalition for change and communicate a roadmap. Merck began by cleaning up inputs and then aggregating data into a data lake to automate into a control tower.

Grow A Thick Skin. Teams do not like change. As a result, driving an agenda to actualize Supply Chain 2030 requires a strong leader to ask those that cannot get it done to get out of the way of people driving change. It often means admitting that the current state is legacy and asking the organization to rethink the possible. We should not to let the need to write-off legacy technologies to stand in the way of building digital capital. Driving the required change is uncomfortable and requires leadership.

2030? We Don't Know the Answer. At the conference, we divided into three groups and worked with a visual facilitator to draw a vision of 2030 for three industries. The image at the header of this blog post is the group's work on the future of the chemical industry in 2030.

The answer? Leaders need to be open to the outcome. When a supply chain leader is confident that they know the answer, it is time for them to retire. Similarly, when a consultant enters the room with a slick slide deck show them the street.

The focus needs to be on building capabilities. Ideating with a visual facilitator like the 2030 vision of the auto industry inserted below helps companies to gain alignment to drive change.

The Industry Is At a Tipping Point. Companies are starting to adopt new technologies. Slowly, it is finally happening. There is a shift from ERP-centric architectures to the use of ERP as only a system of record for financial transactions and the building of analytics architectures that allows data to stream, pool and flow to drive insights.

For the software sales teams, it is a new day. New solutions require a shift in selling techniques from solution selling to missionary tactics based on relationships. Traditional selling and marketing tactics are not sufficient.

Summary

We hope to see you at next year's event. The videos will be posted next week. I will also be writing and sharing the case studies over the next month. The case studies will be molded into the story for my next book. In my publishing journey, I hope that the insights help you and your team accelerate your digital transformation.