3 crucial elements to ace your supply chain transformation
Your supply chains, and its people, will appreciate your pre-transformation preparation
You know you must transform to stay competitive and to meet changing customer requirements.
In today’s world, supply chain transformation usually means integrating digital technologies throughout your extended supply chains.
But how do you keep from wasting money and time you already don’t have?
The following critical elements should be prepared, approved, and socialized before you start transforming anything. Others, perhaps your competitors, are already on this journey. Don’t get held up on your journey because you didn’t take the time to plan and communicate.
- Know Your Strategic Why
Truth is, if you can’t enunciate how the transformation work to be done will help the company’s top and bottom lines as well as provide improved competitive advantage, then the rest of your team will not be able to either.
And that doesn’t bode well for getting buy-in throughout the supply chain.
Often, the tactical Why’s are easiest for supply chain professionals to enunciate. Strategic Why’s are a bit more difficult.
To think strategically, start with this list of big picture items and add unique items required of your industry and company:
- How will this improve the performance my customers want most from me?
- What metric(s) will be used to measure the performance improvement?
- How does the transformation benefit the entire company as measured against the strategic plan?
- What metric(s) will be used to measure the ability of the transformation to achieve what is required in the strategic plan?
- For each functional area, how will the transformation improve the area’s activity, expand capabilities, eliminate waste, and embed new knowledge/data/performance?
To be most effective and to unlock the inherent power from linking digital tools sets together, your strategy must satisfy customer value expectations, strategic business plans, and provide meaningful cross-functional integration all at the same time.
You must know why the transformation is required. You’ll miss your target otherwise.
- Analyze and understand the risks you are taking on
True digital transformation is built slowly, deliberate step by deliberate step so that skill sets can be created while the transformation is being built.
Each step provides an opportunity for risk to enter.
While teams are great at identifying project-based risks, and known tactical risks, the larger strategic risks are often not understood.
However, with something as large as digital transformation, not only will your executive management be interested in avoiding costly mistakes and incorrect decisions, more and more your corporate Board of Directors will be as well.
While risk matrices are a great tactical tool, for strategic risk, you’ll require a logic-based tool that allows you to explore the contributing factors to undesirable outcomes. Contributing factors you may not be aware of in terms of your transformation work and their possible negative effects when linked together with various activity.
If you’ve never tried using the Thinking Process from the Theory of Constraints, your need for strategic risk analysis makes this a great time to investigate its use. With something as integrated, complicated, and complex as a full digital tech stack implementation, you need a logic tool to help you evaluate integrated activity, policy, and culture from the known into the unknown – you’ll uncover surprising results. Unknown risks (undesirable effects) you would not previously have thought of become visible.
Couldn’t you just use AI to do this? Yes and no. The learning and deep understanding that comes from a hands-on team exercise beats just being served solution sets. The deep understanding you’ll develop helps you use AI’s suggestions more effectively later.
Remember: Not paying attention to risk doesn’t mean it won’t appear.
I’m reminded of a saying of my aunt’s that I grew up with: The hurrier I go, the behinder I get.
Don’t lose momentum or executive patience because you have to repeatedly stop forward transformation momentum to deal each risk from scratch as it appears. Many of these will be risks that could have been avoided or managed with a solid Plan B.
- Make sure you have the required maturity of skill sets and supply chain processes/methodology
Digital transformations uncover new possibilities for the company as a whole. Just thinking about where the company could ultimately end up with cost centers changing to profit centers, data rich decision making from AI tools, automation made possible by capturing and storing digital transactions to enable automated payments based on smart contracts, and more – it’s all possible.
But not instantaneously.
What is the maturity level of your supply chains?
Can your supply chains even be introduced to so much power at one time? Or would it be better to divide up the implementation to build skill sets and process performance one meaningful performance step at a time. Steps that are designed to assure that everyone, including those not so excited about the transformation, are brought along at a pace that ensures buy-in, support, and success instead of potential sabotage.
People should be able to see their value in and to the transformation. Technology by itself is not enough. You may be able to see the end results, but if you don’t bring people along with you during the development of this awesome capability, you won’t have the support you require to be successful.
A saying comes to mind: Measure twice, cut once.
Take the measure of where opinion is at. Engage with people where they are. Help them gain an understanding of what the next step, and then the next step, will bring them. Let them participate in discovering and uncovering the value of what will be their new reality.
In short, take the time needed to truly understand transformation from strategic points of view. You’ll be more organized. The transformation will have a greater probability of success. And your results will show up in your data and the business results.
Keywords and concepts: digital transformation, SCOR-DS, digital technology, supply chain transformation, strategic business plan, risk identification, risk management, supply chain maturity, skill sets
Dr. Cynthia Kalina-Kaminsky helps companies of all sizes successfully transform supply chains, integrate digital technology solutions, and avoid risky mistakes that jeopardize your strategic goals and customer performance.
Click here to learn more about how to create organized digital transformation that produces measurable results using the Supply Chain Operations Reference model here
Comments