WHAT DOES BUILDING “UNIQUE” DIGITAL SUPPLY CHAIN CAPABILITIES MEAN: AN EXAMPLE

The Rigid technology of Yesteryears

A decade or two ago, best in class technology was rigid. What that meant was in case of the then best in class offerings, say for example SAP, were not so flexible that you could tweak them as per your unique business challenges. And hence, you can easily find many horror stories of SAP implementations. In most scenarios, people blame integrators involved in these implementations on such failures but the fact is, force fitting systems, if not leading to immediate failures, will lead to gradual failure, which is equally dangerous. Unfortunately, back then organizations did not have many options.

But what is you excuse now?

But we live in a totally different era now and things will keep improving more, exponentially, from this point onwards. Things for which pricy off the shelf solutions were on the market a decade ago, an idiot like me can build, all by myself, with minimum coding (that too with snippets of codes picked from Stack Exchange), within weeks.

And honestly, senior leaders do understand this. They understand that technology can be flexible in the modern age and hence they have become demanding when they interact with vendor sales people pitching their products. But the key question is: How should senior leaders buy or develop high level build plans for solutions, for their Supply Chain issues ? I am sharing an example below, to get you thinking how. I will not detail the full path of the thought process (hey…I need to keep some intellectual capital to myself to leverage in my full time role 😃) but will give you a hint on how to think about it.

Designing Analytics & Technology Solutions: A Logistics Example

The graph below is a Graph from Rakuten Intelligence, showing the average delivery time, for certain big players in Retail, eCommerce and Omnichannel space. The companies represented (from left to right) are:

Amazon , Best Buy, Target, Walmart, Wayfair

The first bar of the bar chart for each company represents the delivery time for the month of January and the last one is for June, 2020, illustrating the impact of pandemic on delivery times of these companies.

Now Amazon definitely has significantly lower delivery time than others but let us assume that Amazon’s delivery times were one day more than shown in the graph. So the first bar is ~3.2 days instead of ~2.2 days and likewise.

You are an external “Digital Transformation” consultant and each of these companies appraoch you to help them develop a Logistics Digital Transformationroadmap.

So given the graph above, will your approach to designing a solution the same way for each of these companies ? Will Digital solution for one company solve the challenges of any other company in this graph ?Of course not. Just by looking at these graphs and understanding the nature of the business these companies are in, the definition of “Digital Logistics capabilities requirements” is different for these companies.

And it always was. Yet we force fitted same “cutting edge” packaged solutions across each of these organizations

But the fluidity of technology today allows you to use the “Challenge” that the logistics function is facing, as a starting point, to start designing tailored Digital Solutions. Of course, you will not be designing the solution solely based on a graph- but this graph alone gives you a peak into some of the capabilities that some of these companies need to build. Again, I will not go into too much details here but you can easily see that the types of Logistics capabilities enhancements that Target needs is different from say Walmart.

Designing the solution is more critical- Technology is a commodity now

Now it may not be what you were told but my take on Digital Transformation is that:

Digital Transformation is not about transforming all processes in your organization into Digital (i.e implementing tech tools extensively)- It is about leveraging Digital to transform your business

The former (processes transforming into Digital ) will automatically happen if you chase the later (leveraging Digital to transform your business) the right way.


Views expressed are my own.

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