I’m hearing several things about supply chains from companies and the professionals that work with them, especially when the topic of digital transformation comes up:
Let’s tackle fear first
Fear is not always a bad thing. You have business to protect, customers to serve, and deliveries to make. Anything that presents uncertainty should give you pause – especially in today’s environment. It’s difficult enough without adding more chaos.
And yet, the bell weather companies, the ones that have implemented and integrated new tech or are building their digital transformation are showing heftier revenues and profit than those who are not in this august group.
Something else to give you pause.
Across the industries I serve, similar themes are playing out when it comes to tech. Perhaps some of what follows is familiar to you? Up until about 5 years ago, technology decisions were made mainly at the operational or tactical levels. Yes, C-level approval had to be received for the larger buys, but even then, the tech was largely a tactical or operational decision and then used tactically or operationally. These buys were also often siloed – and didn’t make for great data transfer, if any.
Tech purchases based on strategic decisions to support performance across and vertically throughout the organization now has to be the rule. Yet when we’re used to justifying tech based on operational and tactical advantage only, we are left without tools necessary to make the decisions. Or are we?
Before decision making comes requirements. Expertise in tactical and operational requirements do not necessarily lead to excellence in strategic requirements – yet the expertise cannot be left out. There are plenty of case studies showing minimal if any business specific requirements gathered and discussed fully prior to major tech purchase.
Lack of strategic requirements, lack of fuller decision making, and lack of alignment across the business is a recipe for results which lead to fear of an expensive mistake, which leads to fear of making a new tech integration decision, which leads to…
fear of being left behind, as well as,
fear of not being competitive in the future.
The solution to the above is to understand what the end customer values and to match your supply chain processes and metrics to these values. While supply chain professionals work to do this every day, when I ask a group of people the same group within a company “what is the prioritized performance mix in your supply chain” (prioritized performance mix provides you with agreement on the recognized trade spaces that enable flexible maneuvering), I often get a different priority mix from every person. Often times even the top performance criterion is different. If there is no tacit agreement internal to the same group of people, you can imagine how difficult it is getting performance agreement on metrics and trade space across all company groups.
This is where the cross-functional headbutting starts.
This is where fear of having more tech installed all over the place also starts.
Both can end.
What you need is a hierarchy for your performance metrics that are then embedded in your processes and decision making. Decision making that applies to tech as well so that you choose tech that works for you before implementation. Since the hierarchy stretches into, and in fact is adopted at, the highest strategic levels, the tech and modular build toward digital transformation is all based on delivering value to your end customer in ways the company has chosen to serve. It’s embedded in your supply chain processes, metrics, practices, and trade spaces. That same hierarchy is recognized and supported across all functional groups.
While you will still want to run a pilot, and modularly build when you are transforming, you no longer have to worry about not having operational, tactical, and strategic performance requirements that are aligned. In fact, if you are changing your supply chain orientation (going after new customer groups that value different performance) the new hierarchy shows very clearly the gaps across the business that must be filled by whatever technology set you choose.
Eliminating fear starts with getting the prioritized performance mix per supply chain correct and communicated.
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Keywords and concepts: supply chain, performance, metric hierarchy, process, advanced technology, tech, digital transformation, strategy
Cynthia Kalina-Kaminsky is the President of Process & Strategy Solutions which helps companies and supply chains of all sizes and varieties grow and optimize. Find out more about eliminating supply chain and advanced tech fears here
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