Supply Chain Consultancy
For businesses, the events of recent years have presented challenges to supply chains that, at best, have stretched current ways of working and raised questions about the design and approach taken to the management of these complex networks. At the same time, we are increasingly bombarded with communication that alludes to ‘digital transformations’, ‘digital supply chains’, and the use of AI in supply chain management. In many instances, it is difficult to determine exactly what processes are being referenced and specifically how activities might change.
Our experience consistently re-affirms our belief that there are 3 fundamental elements, or building blocks, to transforming supply chain performance through technology. When assessing potential developments and the opportunity offered by new software, we see time and again that critical, in-depth, thinking on why change is needed, how the supply chain design should adapt, and what steps are required in the change roadmap, is essential to successful progress.
Supply chains should be designed and managed with a purpose in mind. Generalised statements, vague aspirations, and simple targets are not strategy. Clarity on the objectives the supply network should achieve in support of the business strategy is imperative. All designs will carry opportunities, challenges, and risks. There will be trade-offs that need to be made and priorities set for the inevitable limitations on capital and resources.
Time invested in shaping and defining purpose will be well spent when it comes to assessing the many options that are likely to arise in any review of the software and technology available, or expected to emerge soon. Any number of tasks might be enhanced, removed, automated but with a clear line of sight to purpose, those that have the greatest impact and add the most value in the specific context of the business can be identified.
People make the difference between a technology investment that works and delivers on its promise, and those that fail to meet expectations. Surveys from major global consultancies put failure rates somewhere between 70% and 95%. Whilst clear strategic purpose and objectives for the supply chain helps with decision making, it is also essential to engagement. When change gets difficult and uncomfortable, emotion trumps logic hands down. Starting with why the business is undertaking a supply chain transformation can provide a guiding light and sustain momentum. Documenting and systematically communicating the compelling reasons for change is not just a first step, it should be a consistent theme throughout any transformation programme.
The term supply chain tends to confer a simple view of a flow from raw materials through production and distribution to customers. The reality is more of a network with nodes of activity (factories, warehouses, ports, for example) and connections between them through which goods, information, and cash, flows.
Network design seeks to optimally locate the nodes, process design and integration aims to configure flows, and organisational design determines the roles, responsibilities, and relationships that manage the network (or more accurately, that portion of the network the business controls and/or influences). These dimensions are specific to a business. That said, software and technology applications are developed to operate in a wide variety of contexts and often bring new approaches to existing ways of working. A healthy, creative tension can be developed when considering different software solutions as assumptions may be challenged, new insights and options gleaned, and the scope of the possible extended.
However, it should be kept in mind that software and other technologies are generally available; the capability can be bought and will not, of itself, provide competitive advantage. It is how the software is applied in support of designs specific to the purpose of the business that is key and can provide the differentiation that matters. Strategic design choices should form the basis for assessing the capabilities of software solutions and can provide the framework onto which operational system configurations can be specified.
People tend to fear what they don’t understand. Despite the possibility to improve their working lives, many may resist and reject new systems and processes. Defining why and how new software and technologies will enable the business strategy provides the foundation for building awareness, understanding, and commitment. A consistent, co-ordinated communication plan needs to be first on the list for implementation. It could be argued that for a not insignificant time, any transformation programme needs to be in education mode as much as in process development and software configuration.
A roadmap for the transformation needs to be drawn. That is not to say that each element needs to be determined in advance in the classic project management approach, however, discrete ‘packages’ of work should be defined, and a sequence determined based on both the opportunities and priorities identified previously and the precise conditions the business is operating in. In many cases, dedicating resource to such a programme will be difficult, and most people will have to balance continuing ‘day job’ responsibilities and time on any development work. It is also important that skills and capabilities are evaluated and the need for external support carefully considered to avoid gaps.
Business leaders play a crucial role in software and technological change. It is not simply about sitting on ‘steering groups’ or nominally acting as sponsors and letting the project team get on with things. Visionary leadership is about presence, communicating consistently the purpose of the project, and demonstrating a strong understanding of how the changes and developments will support strategic objectives. It can be easy for project teams to get lost in minutia; sight of the bigger picture is critical to progress.
In conclusion, there can be a tendency to ‘shiny new toy’ syndrome when buying into new software and technology. Great emphasis is often placed on the ‘new system’ to solve all manner of issues. At root, however, enhanced functionality is only valuable in the context of its role in fulfilling purpose and in a well-designed operating network. Why and how need to be thought through and crystallised to shape what changes are needed and when.