If a golfer was trying to fix her slice, she wouldn’t expect to fix it just by purchasing the newest and most expensive golf club. Understanding your stature, swing path, and preferences is key to solving underlying issues and developing a better overall swing.
The same goes for complex supply chains, which are interconnected ecosystems that require human guidance and context at all times.
Undoubtedly, global supply chains are overloaded due to a series of recent challenges, including panic buying induced by COVID-19, production shortages and logistical nightmares like the blockage of the Suez Canal.
But these challenges are not new, according to a recent report by Ernst and Young. COVID-19 has simply accelerated and magnified existing problems, hampering the multi-stakeholder supply chain. Due to the renewed focus on the global supply chain due to the pandemic, interest in autonomous and digital innovations to streamline workflow and optimize operations has steadily grown in popularity over the course of over the past 18 months.
Investing in artificial intelligence and other emerging technologies, however, is not enough to solve the underlying problems along the multistakeholder supply chain. Instead of playing trendy bingo and expecting technology to solve every problem, companies should look to their people and processes in tandem with innovative technologies to drive true business chain transformation. supply.
A need for context
The acceleration of cloud-based technology is bringing a much larger and much-needed connected view of the supply chain. The Ernst & Young report found that increased visibility is the number one priority for businesses over the next 12 to 36 months. He also found that increased automation (63%) and investments in AI and machine learning (37% already deployed, 36% planning to use them soon) are among the steps companies are taking to help their customers. employees to use digital technologies.
Digital freight forwarders, markets and other startups are also contributing to this change which is disrupting logistics and changing the way businesses process and physically move goods around the world.
With all of this technology, there is a greater need for context in any area of operations that businesses aim to tackle. It involves understanding the way people in the supply chain work, as well as knowing exactly what you are trying to transform. The transformation does not need to be so massive that it becomes too expensive or absorbs too many resources.
Likewise, new technologies must be equipped to take into account the wider ecosystem of the supply chain. About 80% of all information needed to manage supply chain operations is external and resides with suppliers, logistics service providers, warehouses, consolidation facilities and banks. All of these companies have unique needs and meet them with their own set of technologies and processes.
In the event of disruption, technology must enable shared responsibility between companies throughout the supply chain. With a people-centered approach to digital supply chain transformation, technology can enable shared responsibility between partners when disruptions arise, and actions to resolve them can be taken more quickly.
How to organize the transformation
While it is clear that the pandemic has accelerated digital transformation, putting humans at the center of these efforts is key to long-term success. But what exactly does a “human-centered” approach mean? To find out, organizations need to be prepared to “get a little dirty” by sorting out all their messy data and considering the human interactions that allow them to better understand the policies and processes within operations. These include emails, phone calls, spreadsheets, and manual processes that move freight around the planet.
The bigger the business, the bigger the “mess”. But there is no cookie-cutter approach to success, because no two supply chains are the same.
For LSPs, digital transformation is even trickier, almost like building an airplane 30,000 feet in the air. Large companies cannot afford to shut down to make general systemic changes to their supply chain. Likewise, strong relationships with existing suppliers should be an asset, not a hindrance. Support, transparency and communication among partners can ensure continuity during transformation.
As for the scope of the transformation, it is best to take an incremental approach. End-to-end system replacement or a fall-back approach is impractical and virtually guarantees business disruption. Often times, it’s not the systems themselves that cause problems – they’re usually highly specialized and functionally excellent – but what happens to the data generated by those systems.
Achieve a strong return on investment
There are good reasons for businesses to have an enterprise resource planning software (ERP), but it’s expensive, time consuming, and difficult to change. Transportation and warehouse management are equally entrenched, so achieving real change that adds value can be a challenge.
All the more reason to stay focused on a human-centered approach to transformation. This will help you choose the right technologies to meet your organization’s business goals, which are ultimately what drives the return on investment.
So what does the process look like? Start with the human sending the initial demand signal to begin purchasing planning, and continue down the chain until you reach the human delivering the finished goods the last mile. Next, think about which technologies or system implementation can add value. It’s about whether the new systems can help people do their daily jobs better or more efficiently.
An added benefit of a truly people-centered approach is the level of detail and context required to complete the supply chain transformation. As the multi-stakeholder supply chain collects and transmits a myriad of information, it is essential that humans analyze the data collected by these systems, in order to provide the context necessary to make the most informed decisions to keep the flow of data flowing. merchandise. The implementation of innovative technology, combined with the human element, will give organizations a competitive advantage and help them realize their digital transformation efforts.
Internally, companies need to understand the processes that can provide data, visibility, and collaboration across business functions that may not have been possible before. Evaluate processes to discover interactions between businesses, then determine what can be automated and augmented. It can start with one small step that demonstrates the possible ROI of a larger implementation, to avoid disruption and waste.
Due to the gravity and urgency of the challenges that businesses and consumers have faced over the past 18 months, the supply chain is now seen as a critical function and a strategic investment. A partner mindset will go a long way in achieving the kind of transformation that will ensure that your customers and their customers are doing the right thing. The multistakeholder supply chain revolves around humans; the same goes for its solutions and operations. Regardless of the advancement in technology, a human touch will always be required to get the most out of any investment for maximum return on investment.
Matt Gunn is vice president of product and solutions marketing at Slync.io.