Building a Future-Ready Supply Chain
From Chaos to Clarity
The world’s total digital data volume is projected to reach 44 zettabytes in 2020 as it doubles every two years. Consumers and suppliers are increasingly connected through an expanding system of IoT devices, which Gartner forecasts will grow to 5.8 billion in 2020. This complicated reality is particularly important given the high-stakes nature of today’s supply chain. One that requires being rooted in strategy.
A strategic supply chain can transform business operating models to deliver superior customer experiences, enable digital transformation, improve quality and visibility, and create profitable value. The problem is while organizations reinvent the wheel trying to succeed in a digital world, results fall short without a strategy that considers your people, processes and technology (PPT).
Experience from top-performing organizations shows how a series of digital transformation initiatives, driven by a pragmatic technology roadmap, that reinforce PPT creates a cumulative impact for a successful supply chain transformation. Within our digital reality, a strategic supply chain is necessary for establishing a future-ready business model that can sustain new levels of speed, agility, efficiency and precision.
Principles of a Supply Chain Strategy
Enabling a future-ready supply chain requires a new way of thinking. New capabilities increase the pace of innovation and allow organizations to swiftly react to changing market conditions, trends and customer expectations.
Research from McKinsey suggests that as much as 49% of routine tasks can be automated by current technology, freeing time for employees to focus on higher value work. To implement new strategic capabilities and deliver superior customer experiences – three overarching goals need to stay top of mind while developing a pragmatic technology roadmap.
- Every supply chain needs an operating model based on insights from real-time demand. Forward-thinking organizations are accelerating investments in emerging technologies that support real-time demand, planning and fulfillment execution capabilities.
- As our world becomes more interconnected, organizations must manage global volatility and build an agile and resilient supply chain—one that reacts to any shock. The rise of omnichannel networks also requires a new level of speed, complexity and efficiency.
- Decisive action is critical to supply chain management in any market condition. The right decisions require total visibility across the supply chain.
These principles help determine the right roadmap towards achieving the future-state an organization envisions.
Actualizing a Future-State Vision
Building a strategic supply chain begins by assessing your organization’s current state by identifying current pain points and limitations. Next focus on building the future-state vision of an organization, targeting future capabilities and key areas for investment. Identify where data management and standardization solves unique pain points and align findings with the technology necessary to converge data silos. From this audit map a pragmatic technology roadmap which outlines the application of technology and data standardization, defines the processes to support innovation, and solves relevant pain points.
Implementing emerging technology won’t be enough to compete in the future of tomorrow. This future reality requires organizations to adopt the PPT framework into their pragmatic technology roadmap. Because as supply chains evolve – so will the people and processes that work in and around them.
The success of actualizing a future-state vision will hinge on identifying actionable insights, enabling a pragmatic technology roadmap, and integrating PPT to build your future-ready supply chain.
Leveraging the People, Process, Technology Framework
As standalone components, people, process and technology are necessary for organizational transformation and management. To successfully gain a competitive advantage, organizations need to balance and maintain good relationships among people, processes and technology in tandem.
People, process and technology is a holistic methodology where the balance of people, process and technology drives action. This framework most often applies to organizations pursuing business intelligence (BI) through technology-enabled supply chain improvements. To fundamentally change supply chain performance, technology needs to be synchronized with people and processes, rather than against them. There are three ideal outcomes from any digital initiative: increase speed, increase efficiency and meet or exceed expectations. While technology makes it possible to achieve these outcomes, it cannot be successfully integrated without influencing the redesign of the people and processes around them.
You can’t simply adopt technology, forward-thinking organizations need an “all-in” mindset behind implementation. As one of Gartner’s Supply Chain Top 25, healthcare conglomerate Johnson & Johnson (J&J) remains a top-ranked life science supply chain by integrating next-generation ERP systems with a digital-ready workforce and culture. Its Innovation Engine, is a physical space for collaboration between J&J employees, key partners and external consultants. J&J was one of the first to comply with the Drug Supply Chain Security Act in 2013 with an adaptive software platform that could serialize and track every drug in distribution from end-to-end. Rather than using existing processes to solve a problem, J&J successfully integrated cross-functional teams with technology to execute a new digital infrastructure – making J&J a model example of how to integrate people, processes and technology into a strategic supply chain.
Organizations need a pragmatic roadmap to drive digital transformation towards actualizing their future-state vision. People, processes and technology are so intrinsic to a transformation that one-off initiatives that neglect to address each side will ultimately underwhelm and lead back to outdated practices. From our experience, a building a future-ready supply chain begins with four steps:
- Assess your organization’s current state
- Build your future-state vision
- Map your pragmatic technology roadmap
- Adopt PPT framework
While all organizations are swiftly adopting digital technologies, high-performing supply chains recognize technology is only one component of a far more holistic effort. As we continue to explore the qualities of a future-ready supply chain, your organization can realize the true potential of your people, processes and technology to unlock the power of your digital investment. Up next in our blog series we will explore how to improve the customer experience by connecting internal and external systems with a structured approach to data standardization and management.
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