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More Insights on Deploying the Digital Supply Chain

On the second day of our executive focus group on the LIVING Supply Chain, the group took the opportunity to share insights regarding the emerging trends in the future of supply chains, with a focus on digitization, development of analytics and a focus on emerging technologies. The executives spent a good amount of time emphasizing the importance of “getting the question right” when it came to building analytical insights. Concepts regarding the emerging set of innovative technologies around “Big Data” were shared, and participants began to explore the concept of ‘segmenting’ data to better understand different types of customers. CPG companies were especially interested in how Point of Sale data can be mined to better understand store demographics, and consumer buying patterns that can drive inventory positioning and supply chain design.   The vision of the “LIVING” Supply Chain was shared, and the idea behind development of a centralized control room with commonly shared KPI’s was discussed. The challenges associated with “data transparency” and a “data democracy” were discussed at length, with the insight that moving to “real-time” data requires not only decisions on what types of data to share, but moreover the senior executive mindset around how to establish governance, roles and responsibilities, and delegation of actions once data transparency emerges.

A presentation by Ed Smith from DHL resulted in a lot of interest, especially around emerging technologies related to use of “Google glasses” in the warehouse, the productivity tools (such as the follow-along cart), and pallet building visioning tools that could help warehouse workers build a safer and more solid pallet in real time. Many of these technologies are being piloted in DHL warehouses, and are driving new ways of working to drive continued productivity improvements and automation in distribution.

Discussions with the group in the afternoon also focused on the need to continuously re-evaluate organizational forms and how to shape organizations to better collect and distribute data. The question on talent raised questions on the “right type of employee” – and how we need to “get started and look for the quick wins”. The need to be able to track events and disasters, and the ensuing need for real-time collaboration in the face of these events was discussed. Participants noted that most tend to be “very reactionary”, and there needs to be more thought around how to drive report summaries on events, core metrics for tracking events, and thinking beyond what is immediately next. With respect to “big data” as a source of decision-making, participants expressed the need to get beyond the “so what” stage, and how to bring in the right KPI’s to manage the extreme nature of complexity driven by ever increasing numbers of SKU’s, customers who make last minute decisions, and volatile demand. The need to bring in better “demand sensing” signals was identified as a key element. Many participants noted that “forecasts are unlikely to get any better”, and most are in the 50-85% range. More importantly, the need for making sales and marketing people more accountable for delivering better sales forecasts, and getting them to “buy into the KPI’s” was a key point.

The day concluded with a number of shared insights around the importance of building short-term wins by “getting the question right”.  Digitization and analytics will involve a series of insights gained through learning, not by a sudden deployment of technology.