In March, this Editor and supply chain technology industry analyst attended and shared highlights of the Oracle Modern Business Experience Conference. In one of the supply chain management focused keynotes, Rick Jewell, Senior Vice President, SCM Applications, addressed the area of Digital Supply Chain Transformation. His presentation and remarks provided some important observations which we believe should be amplified for our followers.
First, there is little question that the topic of digital transformation is top-of-mind among many senior business executives. Multi-industry disruptors are literally changing industry competitive dynamics with advanced technology enabled business offerings and associated support processes. No industry is immune to such disruption.
Yet, surveys of supply chain management senior leadership overwhelmingly indicate that digital transformation projects are not aligned.
Let’s address that finding.
Supply Chain Digital Transformation Requires Objectives and Vision
Clearly, digital transformation can and does provide significant competitive benefits and new market opportunities for businesses. In some industry settings, digital transformation has become more of a requirement to counter industry disruptors. On the other hand, it is important to always call attention to the hazards to prepare firms for a more successful and timely transformation.
An important consideration and long-proven tenet is not to approach such transformation in a wide-scope implementation effort, but rather in multi-phase manageable and meaningful phases that can each provide business and functional value while having the same end-point vision and goal.
With any business or organizational wide transformation, there is a need for an overall business objective and a vision of what the required end state represents.
The business objective is quantifiable in terms of customer support, time-to-market, organizational development, strategic revenue, cost and margin goals. Vision relates to the specific business, people and process transformational needs, both business and functional, including supply chain management that enable the stated business objectives. Vision helps to define the end state, but can be flexible in timing, depending on business prioritization, readiness, external competitive developments or internal resource availability factors.
A two by two chart was depicted below:
As we have often stated, disruptive and advanced digital-focused technology enablers are not, per se, the end vision, they are the most likely enablers of achieving both the required objectives and the supporting vision. They further aid in a timing dimension, in that some advanced technologies are more mature than others, while leading-edge technologies may provide unique competitive differentiation.
Digital Business Process Perspectives
One area noted in Jewell’s keynote deserves added emphasis.
In an academic sense, an often-declared mission or vision of the supply chain, or in digital transformational parlance, customer demand and supply networks, is to serve the voice of external customers. Often, this can lead to organizational debates as to whether customer is purely external or internally based. We have always had the view that it is both, because internal and supplier groups form the basis of both supply and customer demand response.
Also, in the notion of voice, and in the context of digital-enabled processes, voice can now emanate from multiple broader dimensions. Oracle identifies four such voices:
The voice of the customer in areas of online customer fulfillment, connected digital services, modern connected logistics and transportation services.
The voice of the product in dimensions of real-time data streams of operational analytics and performance, consumable materials replenishment or service part replacement needs.
The voice of the factory in dimensions of real-time data streams of asset performance, production monitoring, quality or regulatory conformance processes.
The voice of the digital twin, where a specific product or groups of products can be viewed for product performance simulation needs, anomalies, or tracking and early detection of potential design faults, or a 360-degree view of assets, key performance indicators, operational maintenance or financial performance criteria.
All such capabilities can be a tenet of supply chain digital transformation. The question of alignment relates to the stated business objectives.
Similarly, a determinate of what specific business and capability needs are required, then leads to the determination of technology choices. In many cases, existing technology acquired years in the past are not going to be able to scale to digital transformation needs. which digital technologies best support needs. Thus, older, legacy technology could be the inhibiter, and the best way to articulate that need is referencing the long-term business objective and vision of required capabilities.
In the area of new, more advanced technologies becoming available, whether it be artificial intelligence and machine learning, blockchain, chatbots, connected digital threads, Internet of Things (IoT), predictive and/or prescriptive analytics, each or in combination can be an enabler to specific or combinations of required voices.
More importantly, however, will be consideration to selecting a technology provider that provides the platform and the data and information integration architecture that allows for time-phased adoption of any of the enabling technologies.
When one is considering buying of a new residence or condominium, the evaluation is often on the overall space and features required today, as well as in the future. Will there be added children, in-laws, or various different needs in the future, and does the property provide the flexibilities to accommodate such changes without having to disrupt the residents in having to sell and move to a new residence.
Clearly, digital transformation can and does provide significant competitive benefits and new market opportunities for businesses. In some industry settings, digital transformation has become more of a requirement to counter industry disruptors.
The takeaway for readers is that supply chain digital transformation requires two important components, quantifiable long-term business objectives and a flexible but clear, end-state vision of business process capabilities required to meet such objectives. Consideration of advanced digitally-enabled technologies are in the context as most appropriate specific business process enablers at a given point in time, that can flex with your organization’s required business needs without added disruption.
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