The digital revolution: what it takes to succeed
Marc Engel Global, Chief Supply Chain Officer at Unilever, shared this reminder: “Innovation is not about machines; it’s about asking ‘what do people want?’” For supply chain professionals, those people are consumers. To effectively serve their needs, supply chain innovation must focus on the needs of the consumer.
It’s essential to change the mindset from mass production and mass marketing (especially in the CPG space) to become “consumer-centric,” with a renewed focus on the individual consumer. It’s time for digital re-imagination, not just digital automation.
A key challenge in the digital revolution is “people transformation.” It’s key to unlearn the old rules and define the new rules. It means saying “we’ll only do things that will have customer impact, not just for efficiency’s sake.” Mike Burkett presented Gartner’s point of view, which emphasizes that digital transformation is more than just digital optimization. Digital transformation focuses on building new business models.
A new approach to talent
In the emerging digital supply chain revolution, a new supply chain leader is emerging, and new talent management models are needed to engage external talent while transforming internal talent.
Companies need processes to support the “gig economy” and make it easy for contractors to function within the organization. Agile teams need a new way of working. New models that will support the idea of learning rapidly and making quick decisions are key. Learning from experimentation is the new normal, so companies should create a culture that welcomes this approach.
When it comes to internal talent, the best talent for the supply chain digital revolution includes people who embody a different leadership model, one driven by a pioneering spirit. Those who thrive will have the right “inner game” (passion, personal commitment,) and the right “outer game” (business acumen, ability, and mastery).
One key area of the talent needed to catapult your business into the next generation is data science. Data science talents need to be developed, as these experts tend to jump from company to company seeking knowledge and may not fit into formalized roles. Companies need to find ways to keep the organization flexible and dynamic enough to engage the right people and create the right roles.
Supply chain planning in the digital world
Analog supply chain management decision-making is a thing of the past. It may have worked when supply chains of the past, but it:
- Moved slowly and steadily
- Had less complexity than today (fewer products, smaller geographic footprint)
- Was managed by planners who had fewer systems (and therefore, easier access to the right information) and could tolerate longer decision cycles
Digital supply chain decision-making is dynamic and multi-directional. It works when:
- Supply chains change quickly and processes must align to continuously changing business needs
- Planners are widely distributed and must work in partnership across the globe
- Teams have continuous and direct access to data and decision support
The importance of S&OP
Gartner’s Mike Griswold pointed out at the conference that no process is more fundamental to positive financial results than sales and operations planning (S&OP).
Organizations need to mature their supply chain planning processes from “inside-out thinking” to “outside-in thinking.” This means focusing planning to align what the customer or consumer needs and not what the enterprise needs. Planning models need to transform from cost-cutting to customer service.
Planning processes currently are usually oriented around functionality, and organizations scale the planning function to reduce costs. This model needs to turn upside down to enable internal and external collaboration and focus on stakeholder value delivery in the digital world. Griswold’s key recommendations included:
- Differentiating S&OE (sales and operations execution), S&OP, and annual strategic planning processes by setting specific expectations on horizon and agendas for each of them
- Setting up a formal S&OE process with a frequency needed to manage near-term execution decisions (often weekly or every two weeks)
- Assessing your S&OP process for S&OE content and carving out the near-term-focused items from the S&OP agenda
- Aligning processes, people and technology to integrate the end-to-end supply chain through the use of common toolkits, transparent governance, and consistent performance measurements
To recap the key themes: the supply chain digital revolution requires a fresh look at digital transformation, a focus on digital supply chain decision-making, a new approach to talent, and an increased focus on S&OP.
It was thrilling to see so many of Anaplan’s supply chain customers in the Gartner Supply Chain Top 15 for Europe.* Kudos to all who made the list this year! Here’s to the continued supply chain transformation!
*Gartner press release, “Gartner Announces Rankings of the 2018 Supply Chain Top 15 for Europe,” September 25, 2018.