How strategic operations connect the dots to enterprise performance

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.