We are at the beginning of a completely different era in the history of global trade: the era of the digitized real-time supply chain. In the 25 years I have been teaching students and conducting research in the field of supply chain management, I have never seen the degree of change evident in the face of this new digital era. The changes we are witnessing are unparalleled in scope, and their implications for the way humans work will have significant impact on our daily lives. This is the era of the transparent, real-time supply chain, enabled by the rapid digitization of the communication infrastructure, cloud-based computing, mobile technology, and the rise of the digital ecosystem. These changes have less to do with technology than our mindset and understanding of how to adapt to this new reality.
This is about developing and sustaining a deep understanding of the components of customer value while making pre-emptive strategic plans that can better respond to sudden shifts in customer requirements and market conditions. This nimble response will be enabled by a series of dramatic shifts in the way we monitor not only the explicit needs of customers for materials, information, services, knowledge, and capability, but also to the intangible elements that drive the cost to provide this level of service. We are moving to the era of real-time supply chains that involves understanding and predicting what internal users and customers will need right now, even before they themselves recognize that they need it. Response velocity is the next capability that will define competitive survival.
Velocity as the Next Frontier
The next competitive capability in the supply chain will be visibility with real-time response and digitization as ingredients for driving growth in a flat economy. Visibility requires transparency, which in turn can be leveraged through the new technological capabilities of inexpensive cloud-based computing, distributed computing “at the edge,” and the growth of a digital ecosystem. Those who harness these technologies through collective innovation with their supply chain partners will win. In a single digit growth world, velocity will become the only thing that matters.
There are two key core elements of real-time supply chains: velocity and visibility. Velocity is the ability of an organization to drive working capital rapidly from suppliers through end customers. Visibility is the relative transparency of events, material, and flows to all key decision-makers in the extended supply chain. In concert, these elements move supply chain activities towards a frictionless and sustainable future.Visibility allows individuals to see what is going on, and empower these individuals to interpret information and rapidly make decisions in response to data. These principles are not new. Many of the concepts around “lean production systems” have emphasized flow and visibility; however, in the context of supply chain digitization, these concepts have a new meaning and importance.
Velocity and visibility are only possible to the extent today because of the evolution of technology. Clearly the establishment of the Internet spurred the explosion of information and the plethora of supply chain management tools and applications now harvesting data, and driving the evolution of “cognitive” computing. Yet this disruption has not fully matured; in fact, it is really only just beginning. As organizations begin to engage and mediate impacts upstream and downstream, the power of this force will become evident. It will be those companies that not only survive, but thrive.
In this year’s SCRC Semi-Annual Meeting forum, we will introduce insights into the rapid changes in velocity, digitization, and analytics across the supply chain. We will facilitate a series of roundtable discussions which will allow you to address and gain insight into the following sets of questions:
- What are the major challenges your organization is facing in driving change and adapting to these changes?
- Where are you in your journey to move beyond price leveraging and creating value, innovation, and impact on Total Cost of Ownership?
- How are you able to create a budget and justification for investment in a digital supply chain?
- What are the major places in your supply chain where visibility is needed?
The Mechanics of Transparency
- What types of data and information are needed to be able to be transmitted in real-time versus those that could be completed in batch mode. (“Not all data gets a first class ticket!”)
- How can risk data be created in real-time (natural disasters, financial issues, market shifts, capacity issues, operational breakdowns), versus those that can be communicated and transmitted in batch mode.
- How will legal counsel deal with the issue of real-time transparency?
- How will our team be prepared to get their heads around the issue of transparency?
Our meeting agenda will include:
- An SCRC Board of Advisors meeting (by invitation only)
- The SCRC Forum “Preparing for the Digital Supply Chain” by Dr. Rob Handfield, Bank of America University Distinguished Professor of Supply Chain Management and Executive Director of the SCRC.
- Shell OIl Products Chief Supply Chain Officer Vince Messimer, speaking about “The Challenges of True Total Cost of Ownership Understanding”
- An update on SCRC programs and services
- Student Projects Showcase presenting ~30 graduate and undergraduate practicum projects completed by all academic concentrations within the Poole College of Management this semester.
- Supply chain professionals and practitioners networking opportunities.
I’ll be keeping you updated as the event rolls out today…. stay tuned!