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How strategic operations connect the dots to enterprise performance

Operations should be seen from the customer’s lens. Making decisions based on integrated data can help companies balance demand and supply.

Questions to ask:
  • What are the operations of an organization, and how can they turn from cost-focused to competitive advantage?
  • How can supply chains lead the way in delivering the right products and services exactly when customers need them?
  • What emerging technologies are providing a jolt to help supply chains work differently?

Here’s the question that every supply chain and operations leader should be asking. In a post-pandemic and ever-changing world, how can we make sure our operations are nimble enough to consistently meet and deliver what our customers want? Shouldn’t supply chains be less of an organizational afterthought and instead be at the epicenter of operations driving integrated decision-making with business functions from sales and marketing to product development to finance to procurement and manufacturing? With an extreme focus on supply chain costs leading up to 2020, it is easy to see why that idea hasn’t been a priority up until now.

Supply chains have been viewed mostly as a cost center, with executives paying little, or not enough, attention to their central importance for their organizations, and their critical role in overall business performance. With years of supply chain instability; increasing customer expectations; balancing global, regional and local supply networks; and geopolitical uncertainties ahead, the industry has reached an inflection point.

In fact, supply chains are at a critical juncture, and it’s time for a 180-degree about-face for us to think of operations – led by supply chains – as a key to strategic competitive advantage. Doing so – adopting enterprise-wide, integrated operations practices focused on efficiency and growth, and the emerging technologies that now enable this – will deliver the kinds of insights that can improve top and bottom lines and elevate customer satisfaction to new levels.

Why emerging technologies are giving operations a jolt


With emerging technologies, and AI in particular, operations are getting a “jolt of caffeine,” enabling them to become more strategic for improving enterprise-wide visibility and creating data insights to drive performance. Traditionally, the supply chain industry has had its eyes on the rearview mirror – a colorful way of saying that we’ve used historical data to guide decision-making. But, with emerging technologies now breaking down historical barriers to knitting together operational silos, as well as the rapid integration of generative AI (GenAI) tools into operations, several things are about to happen.


With near real-time data collection methods from retailers, suppliers, social media and other sources, for the first time, organizations are gaining product, delivery and other insights into things like inbound inventory issues or delays, carrier problems, or issues with selected routes or transportation modes. And they have the technological capabilities to execute decisions rapidly and in the moment to course-correct or improve performance. That means an ability to test “what-if” scenarios and learn quickly, allowing operation leaders to become more agile and more profitable in the long run. Supply chains then have an opportunity to become the epicenter of commercial and operational performance.


What are strategic operations?


A lot has been written and said about building organizational resiliency over the past few years. But employing a broader strategic operations approach is about utilizing smart systems and data-led decision-making to use market-backed approaches for designing, sourcing, manufacturing and delivering products. It is about making all operations across your enterprise focused on putting customers at the center of your business. Efforts must include integrating data across all customer interactions, marketing efforts, product planning, demand and supply planning, procurement, manufacturing and logistics management so that you have a lens on ways to drive an improved customer experience.


It also means optimized management of an ecosystem of third-party providers, partners and suppliers, all of whom understand operational methodologies and can meet your performance targets. Emerging technologies are the enabler of all of this. AI systems and tools can drive predictive synchronization of supply and demand across the network of partners, identifying patterns and detecting early issues for correction. They also enable organizations to optimize operational models to improve delivery, as well as rapidly analyze customer sentiment – and changing views – which will improve response times and both the critical tone and important content of communications.


What happens when we get strategic operations right?


Consumer demand and expectations are accelerating, and the speed to respond or stay ahead of change won’t slow down. A truly integrated strategic operations approach enables rapid response to shifting market conditions or changes in consumer preferences and behavior that previously might have taken months or more to enact. But there are other benefits too. An organization aligned around strategic operations also heightens employee satisfaction by reducing complexity and helping employees focus on the things that are most important to the success of the business. Enhancements to delivery times, improvements in quality and better value pricing create customer satisfaction; build reputation; and deliver, over time, a competitive edge.


Last word


The ultimate goal with operations should be to create a much more strategic organization, with supply chain leading the way and using GenAI and other technologies to link together sales, marketing, finance and operations to create real competitive advantage. This may require evolution of operational models beyond technology, such as the addition of micro fulfilment centers, to meet booming local demand. But the rewards will be significant. Our work with AI solutions and strategic operations consulting with a large US retailer helped the retailer move from traditional demand forecasting to managing orders at the customer level. This effort delivered more than $300 million in network overhead savings and improved customer service levels, thus creating a supply chain-driven sense-and-respond organization. This kind of transformation can be possible for organizations that choose to embrace and focus on strategic operations that unify their direction as 2024, and beyond, unfolds before us.


Companies need to rethink their approach to operations, viewing them not as a cost center, but instead through a customer lens and as an engine for growth. As supply chains face constant challenges from evolving customer expectations, geopolitics and integration of advanced emerging technologies, such as AI, they are receiving increased attention from the C-suite. This shift is helping supply chains become the epicenter of commercial and operational performance, tying together various functions, such as finance, sales, marketing, product development and manufacturing, to help ensure the timely delivery of products and services aligned with customer needs.

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