In our keynote presentation at the SCOPE supply chain conference, “Build a Smarter Supply Chain: One Step at a Time,” my colleague Brad Stitt and I outlined a logical, step-by-step approach that combines operational technology (OT) and IT expertise to build a smart supply chain at your own pace and realize exceptional results.
We felt it worth reminding the audience of senior supply chain professionals that digital disruption – a major theme of the conference -- should be seen as less of a “thing” and more as a way of doing things. Of course, the “things” — sensors, virtual reality, predictive analytics, blockchain, machine learning, 3-D printing and algorithmic modeling — capture a lot of attention. These digital disruption technologies can become the new bright, shiny objects that some see as silver bullets.
But instead of taking an inventory of the “things” your organization may or may not be deploying, we think it’s more worthwhile to assess your way of doing things. Are you:
- Making step changes in efficiency and productivity?
- Increasing agility and enabling mass customization?
- Creating variable, elastic capability and/or cost models?
- Delivering smart products and new customer experiences?
- Shifting to “as a service” (XaaS} business models?
- Creating new service networks and channels?
- Accelerating the route to customers and markets?
Those are all worthwhile goals but what’s the right path for creating those kinds of new value — without huge OpEx or CapEx increases? Here are a few rules of road that other executives have found useful in digitizing their supply chains.
- POC (Proof of Concept). Defined with clear use cases and specific, attainable ROI. Learn fast from those experiences and apply new best practices to the next project.
- Leverage previous investments. For example, can you add a additional specific sensors to collect data and enable preventive maintenance instead of replacing expensive equipment?
- Set priorities based on business need, not technology. Don’t introduce a solution in search of a problem. Instead, work with the rest of the business to uncover problems and opportunities worth testing.
- Co-innovate with suppliers and customers. Focus on projects that share value across the value chain.
- Buy services, not products. The cloud and “as a service” models can minimize investments and provide the flexibility needed to test and learn from those POC’s.
- Fill in the workforce gaps. A fear of change and other behavioral barriers can undermine even the best plans and strongest business case. Likewise, gaps in knowledge and experience can be real project-killers. It’s up to management to nurture a workforce that knows more, can do more and will do more to drive a digital transformation. Change management should be a priority, not an afterthought.
We also discussed digital fast track success factors, which sparked several questions from the audience. We invite you to read our recent article in Manufacturing Business Technology that covers those success factors in some detail — “Six Factors that Make or Break a Manufacturer’s Digital Initiatives”