Digital supply-chain transformation with a human face

 

The modern supply chain technology is still a fundamentally human endeavour. Understanding the human factor represents an opportunity for companies offering technology-enabled supply chain improvements. DIgital approaches that work with the people rather than around them have a better impact and prove easier to implement and sustain over a long time. They improve access to information, streamlining decision- making, and facilitating cross-functional collaboration and trust. 

From linear to iterative transformation

Companies that recognise the need to take a holistic approach to supply-chain technology face a major hurdle. It requires organisations to juggle people, process and infrastructure. It is required to overcome all usual technical, organisational, and cultural obstacles to change.

Digitally-enabled transformations add two extra challenges.

• First, there is an extra technology component that must be managed along with changes to processes, infrastructure, mindset and behaviours.
• Second, is the lack of single, clear destination. Digital technology is evolving so rapidly that there hasn't been time to prove itself sufficiently at scale. The supply chains are specific to each company and hence standardisation is not possible even within a single industry.

These extra complexity and uncertainty mean that Companies can no longer follow the linear path and need an iterative approach. The new digital technology must integrate with people, processes, and infrastructure but these technologies will also influence how these will be redesigned. 

If companies introduce new technologies without making changes to their processes, mindsets and infrastructure they risk digitising the current firefighting rather than fundamentally transforming their supply-chain performance.

Why today's approach fails

Designing a supply-chain transformation is a formidable task. Be aware of three common traps.

• First of these is to focus only on the process. Sometimes, companies spend lots of time on developing detailed plans. Others outsource it copying from best-practice templates. Proces is necessary but not sufficient for transformation. Certain common-sense best practice principles should be kept in mind like being cross-functional, engage stakeholders across all levels of the organisation.
• The second trap is the adoption of technology. here companies select technology and apply it across supply chains. thus they digitise their current sub-optimal process. This makes it difficult to improve over the longer term
• The third trap is the problem of the pilot project. The company understands it needs to address every component of transformation but goes for a pilot project to make it more manageable. When it comes to scaling up it may not be robust enough to stand up to the demands of the entire business.

Learning from leaders

managing a supply-chain transformation without falling into the three traps is no mean exercise. There is no one size fits all approach that guarantees success. When one looks at the high performing companies, one realises that it is only one component of a more holistic effort with human element at its heart. 

Digital supply chain transformation is about much more than technology. For the supply-chain innovation to deliver its full potential, companies must adapt its process, capabilities and management systems. They need to have the flexibility to learn, adapt and change as they go and ensure to take the people along with them on this journey.

Digital supply-chain transformation with a human face

by Scott McArthur, Ali Sankur, Ketan Shah and Vedang Sing

McK January 2020