Ideas to Align Digital Supply Chain Strategy with Operations

Sanjay Choubey, CIO, Briggs & Stratton

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Sanjay Choubey, CIO, Briggs & Stratton

Based on decades of supply chain and digital experience, I notice that these days most organizations consider their supply chain as a critical component of their business strategy to build competitive advantage. Digitalization of the supply chain has hence clearly become imperative for the organization. However, several of these organizations falter in either developing their digital strategy or aligning the implementation for clear business value. Digital technologies in supply chain enable organizations to become more proactive in meeting the needs of increasingly digital customers, and improve productivity and fulfillment metrics. These improvements can clearly be measured in customer services and sales revenue metrics. However, the outcome of digitalization of supply chain has not been completely realized by organizations due to the following reasons:

A. Incoherent digital transformation
B. Lack of context of digital enablers
C. Incorrect global template and context of global change
D. Lack of appreciation for new digital products and services

A. Incoherent digital transformation: Incoherent digital transformation refers to uncoordinated and disconnected digital efforts instead of holistic supply chain strategy of the organization. Supply chain strategy of an organization should consider the entire business value chain, its interconnected partner network and inherent network velocity. In the interconnected supply chain network, addressing isolated supply chain issues without understanding the overall context fails to provide the expected outcome, as it doesn’t improve the entirety of supply chain velocity.

B.Lack of context of digital enablers: While digital technology as a process enabler and tool to solve supply chain business problems serves well, digital technology centricity without a clear plan for all the constituents such as user readiness, business partner readiness, location of distribution centers, and warehouses defeats the overall purpose. Digital transformation with ONLY a technology focus limits the value of digital approaches and makes it more difficult to capture larger business value over the longer time horizon.

C. Incorrect global template and context of global change: If not designed correctly, global templates are hard to deploy and scale to the larger organization, resulting in successful pilots yet failed global deployments. These days, most of the supply chain partners are global, hence global deployments while adhering to the core template is essential to capture business value. Deploying local changes, while adhering to the global template needs strong project management as well as stakeholder and change management.

D. Lack of appreciation for new digital products and services: Several organizations don’t realize and are not open to the idea that digital transformation of business processes is creating new products, processes, and services. For the real transformation to happen, the supply chain constituents need to change the way they forge and manage relationships with each other and revise the other entities in the supply chain to facilitate new types of alliances and agreements. It requires managers, responsible for developing supply chain relationships, such as account managers or supply managers, to adopt a boundary-spanning mindset in order to facilitate collaboration, experimentation, and trust across organizational boundaries

Framework for Digital Transformation Success: The framework is based on four main pillars:
1. Supply Chain Vision: Clearly defined vision statement of end goal based on measurable business outcomes (Point B). The vision outlines the overall goal and purpose of the outcome. In simple words, it articulates “WHAT” is to be done. Some of the supply chain Key Performance Indicators (KPIs)include OTIF, % Service level, Time to fulfill, Failure to Supply measures, etc.

2. Business Processes: Clearly defined business processes along with KPIs help not only to measure the outcome but also to manage the future redesigned process.

3. Digital Technology: Digital technology provides the necessary tools to help realize the vision. It may include AI/ML, system architecture, RPA, cloud, interconnected network, IOTs and several others, as well as implementation methods and project management methodologies.

4. Digital Participants: Different constituents/players in redesigned business process are extremely important. Constituents such as workforce, customers, and suppliers need distinctly different approaches, which need to be tailored to specific needs.



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