Make Supply Chain a Growth Engine – Going Digital and more!

About Author: I write these articles to reflect, consolidate, question, challenge and share what I am experiencing with my current undertakings. If you are here reading, either you are an industry professional, directly/indirectly involved with this topic in your line of work or have a general interest in it. Please to leave a comment after reading, write your opinions and share. It would help in the process. Thank you. EB

I made that shift! By directing the companies I manage to use our supply chain to anticipate customer trends and also adopt a zero-based approach to Supply Chain.

(Zero Based Thinking: ZBT works like hindsight, based on experience, applied from a hypothetical future to the actual present in order to maximize the chance of success and/or avoid the risk of failure)

Companies across industries face increasing disruption driven by competitive pressures, emerging technologies, and an ever-expanding range of customer expectations. These trends will only continue to accelerate (AI, Machine Learning, Autonomous Technology).

Even companies like ours that are several degrees separated from the consumer need to be fully aware of how end-consumer trends impact our operations. It’s no longer a nice-to-have; it’s a need-to-have to survive.

Consumers want products in their hands faster than ever, and they expect a more tailored and personalised experience. As a result of these disrupting factors, for many companies, growth is becoming more difficult to come by.

The supply chain function is not immune to this pressure. In fact, it’s causing many corporate leaders to pay more attention than ever to their supply chains and position supply chain to be a pillar for growth — a trend I am seeing even more of this year.

How to transform our supply chain to be a growth engine?

In my opinion there two immediate opportunities supply chains can take:

Use the supply chain to anticipate customer trends and meet expectations. According to Accenture Strategy research, 56% of business leaders believe customer experience is their top digital transformation priority. With customer demands continuing to heighten, just offering a product or service is no longer enough. Successful companies need to be focused on delivering the most compelling experiences.

Hyper-personalization is king. Companies need to offer highly individualized, focused products and completely customized services providing buy-anywhere, collect-anywhere, return-anywhere capabilities via flexible channels. With a strong focus on business-model and technological innovation, hand in hand with the use of analytics and other digital technologies, companies have an opportunity to spot trends among customers and stay in front of demand.

The supply chain is a key area within a company to mine this insight. It contains data that helps companies understand the way technologies are changing the way people live and work and redefining customer expectations.

Having that information can allow companies to get to the root of why customers buy, and respond accordingly with new products, services, and experiences to meet that demand.

The companies that are successfully managing risk and disruption are those that are in tune with the end consumer. Even companies that are several degrees of separation from the consumer need to be fully aware of how end-consumer trends impact their operations. It’s no longer a nice-to-have; it’s a need-to-have to survive.

And put non-working money in the supply chain to work toward funding growth. With half of companies’ costs typically residing in the supply chain or costs of goods and services (COGS), the supply chain can be a source of funds that can be reallocated to growth initiatives.

However, the process of uncovering that non-working money can be overwhelming. Many organizations work in functional and geographic silos that make it seem impossible to know who is spending what, where — and, importantly, why. The good news? It’s not as difficult as you might think.

Companies need to look beyond traditional supply chain cost optimization to a more holistic approach — something that is termed zero-based supply chain (ZBSC).

This is essentially having a zero-based mindset. Whereas old methods rely on cost targets based on yesterday’s realities, this methodology is a sustainable reset of a company’s cost baseline. It accounts for change, including improvements of top performers and technology, to determine “should costs” and develops a path to realize them.

This year if not already, companies need to be applying digital technologies and sustainability practices that optimise price and performance across global operations and enable richer data insight and value. The result of which can allow companies to deliver superior supply chain performance at the right cost.

The key to success is to make the effort durable. It can’t be a one time. Continuous renewal makes zero-based supply chain effective. It keeps the non-working money from building up while driving funds to fuel growth and increase competitiveness.

Global supply chains can no longer afford to operate in traditional ways. Fax, email and phone have become outpaced by today’s rapidly changing and complex world. Technological innovations have enabled companies to replace the disconnect of traditional methods with supply chain transparency.

Surveys show that only 45% of companies have started the digital transformation, but 56% of those who have were improving profitably! That means it’s time to digitize our/your global supply chain.

Digitisation of the supply chiain enable the organisation to make better decisions faster, reduce errors and risk, and achieve significant benefits. Leave the old ways of doing business in the past and commit to digitization.

The last major business area that has not been digitized is the global supply chain! Perhaps the reason is the level of complexity, where information needs to span departments like sourcing, logistics, and trade. Or maybe it’s the need to share information with many different external parties, spread across time zones, that speak different languages. Or maybe it’s just how it’s always been done – that is, largely on paper.  

Digitizing the global supply chain leads to the creation of a control tower. One that provides more than read-only single source visibility, but rather broad visibility to all the relevant information for cross-border trade. This control tower provides an actionable platform that enables better collaboration, automation, and analytics; leading to improved efficiency, lowered risk, and greater agility. New technologies like blockchain, IoT, and artificial intelligence promise great benefits, but they all require digital data before they can be leveraged. Digitization of the supply chian tapped into the three main ways to create value: collaboration, automation and analytics.

No one is disruption-proof. Technology has made every business vulnerable. The good news is that companies and supply chains can prepare for and manage disruption. By positioning the supply chain to be a growth engine through digitization for one, companies can move from being disrupted to becoming the disruptors themselves this year and beyond.

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