An agile transformation will better align your supply chain with your strategic imperatives.
Change and disruption are attacking the supply chain from multiple directions:
- First, there are channel shifts due to new consumer habits, the speed of orders and customers’ expectations of delivery standards.
- Second, the C-suite is putting pressure on the supply chain to perform financially in terms of costs and working capital.
- Third, there is now a requirement for the supply chain to become a strategic differentiator to help a company effectively compete in its market.
- Fourth, supply chains are moving from a linear model of bringing products and services to market — to a networked one where data resides in the cloud and is accessible to everyone in the network to act upon simultaneously when events occur.
In the light of this new normal, what worked in the past doesn’t cut it any more. For example, multiyear enterprise resource planning (ERP) and advanced planning systems (APS) implementation projects were once viewed as solving most of an organization’s supply chain challenges. Now, most companies understand that a strong association among process improvement, organizational change and technology implementation is critical in driving agile, purpose-led and transformative change.
What’s driving change?
With the advent of more demanding consumers, the old supply chain model of “stack it high” with full truckloads arriving daily at the retailer is being replaced by home delivery, order and pick up at store, order and pick up at delivery station and other new retail models. In addition, start-ups are arriving in the market with completely new business models and supply chain designs. These firms can make advanced products available quickly with very little capital investment.
Supply chain digitalization is another source of pressure. Every supply chain executive is now exposed to terms such as blockchain, artificial intelligence (AI), robotic process automation (RPA), cloud computing and the Internet of things (IoT), just to name a few. But what’s the best way to leverage these new technologies, and how do they best integrate with today’s ERP and APS systems?
What the future supply chain should look like
Supply chains must embrace the concept of achieving more, in a shorter time, with new digital technologies. This is what we call the agile supply chain. In such a model, end-to-end processes across planning, manufacturing, logistics, procurement and other activities are enabled by the latest technologies. This includes leading-class ERP and specialized software such as applications offered by SAP, blockchain, RPA and AI.
The major software vendors have embraced this new digital reality and are moving to provide their clients with a more solid data foundation and more integration among financial data, transactional data and planning data, which allows faster and deeper insights into the way a company works. And of course, software companies are leveraging the cost-efficient capabilities inherent in cloud computing to offer their customers a more agile approach in leveraging their own data.