Advance your supply chains even if the U.S. digitally “stalls out”

In a recent HBR article, Bhaskar Chakravorti, Ajay Bhalla, and Ravi Shankar Chaturvedi share research highlighting that the U.S. is on the verge of stalling out in its digital competitiveness.

Why?

Because the U.S. has a high level of digital advancement accompanied by slowing momentum.

Not good for a country heavily investing in IoT, digital supply chains, and blockchain. However, the article also highlights what will prevent stalling out: public policy leadership (quoted from the article):

• public-private partnerships on digital innovations;
• better integration of automation, data, and new technologies into the legacy economy;
• investments in reskilling workers and teaching students in schools the skills and thinking to thrive in a digital world;
• improving access to capital and digital infrastructure and reducing the many inequities;
• sensible regulations that keep pace with the transforming rules of competition and have a dynamic view of protecting consumers’ interests without stifling innovation; and
• reimagining U.S. competitiveness in terms of its digital economy and international data flows and thinking beyond traditional manufacturing and trade of physical goods and services.

Easy to write, but what about reality and actual implementation.

How can you keep all these strategic pieces moving, coordinated, and at the end of the day, creating performance results for your company? This is where a framework such as SCOR comes into play.

While all can be worked with SCOR, let’s take on the second bullet point.

How many of us are not interested in successful integration of automation, data, and new technologies into the legacy economy which includes our legacy systems? No one I know.

The trouble is, there are so many areas we’d like to move forward, but our legacy systems and current business thinking is holding us back. So, let’s change the paradigm.

For our example, let’s imagine being a consumer goods manufacturer.

Our mindset is usually focused on lowering operational costs. Good customer service is in there, but cost cutting is king.

Should it be? What if we focused on asset management in our example supply chains – all of our assets. If we can move our products more efficiently through optimized supply chains, then our costs are automatically lower. What we need to do is figure out which of all the available supply chain

segments will truly work to meet our performance requirements efficiently even though they may be located in different parts of the world. Using the article’s digital competitiveness map, we can choose segments based on a country’s digital maturity. If we think of a supply chain as a train moving product down tracks (tracks being supply chain segments), then optimal supply chains require choosing which segment of the track should be used (ie: which source or delivery piece will work best). Instead of a single track, our supply chains will resemble train yards where tracks are switched to match country ability.

Sounds complex.

It is and it isn’t. If we optimize our processes and align our metrics with asset management performance, then our extended supply chain segments must optimize and align in the same manner. We choose them because of this alignment. Sourcing now includes finding suppliers that match our ultimate performance requirements – in this example: asset management. This means we may have more than one source for any given raw material, but we pull on a specific source when digital requirements dictate. Delivery also requires the same setup. Our supply chain is flexible.

What happens now?

You don’t feel as if you are pushing a string because you have a focused, structured, and standardized methodology and philosophy that provides specific performance results you can see in both the financials and in the reduced stress levels within the company.

You get top and bottom line results from a unified framework.

You get top and bottom line results by matching tactical process detail to strategic performance.

Digital competitiveness isn’t always about a new product.

For more mature countries like the U.S., it’s about the innovation in application.

Key words and concepts: supply chain, performance, asset management, digital strategy, metrics, SCOR, application innovation

About the author: Cynthia Kalina-Kaminsky with Process & Strategy consults with and provides training for organizations eager to increase their competitive value by helping enable growth, align performance, make and move product (even when the product is electrons). She is teaching SCOR (Supply Chain Operations Reference model) in Baton Rouge this October. SCOR is the framework Fortune 500 companies use to increase their performance.