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Missing the Big Picture- The fog of Tools, Technologies and Hype
I once was sitting in a meeting room of the DC of a CPG giant, listening to a pesentation on how they function. My project (pilot) was pre-determined and I was there to collect additional data points on my pilot. The DC leader was presenting to us how the org was structured in that DC. And one of the very first few slides caught my attention. There were six people in that one single DC with titles that had “Transportation Manager” in them. They were assigned to corresponding processes- but my initial thought was- were the processes designed to assign people to them ? Were six different aspects/divisions of a high level process really required ? And the thing that was on the top of my mind was- this was going to be roadblock in the seamless implementation of the tool we were developing (though can’t share the details here).
Yes, that DC was a busy DC but six Transportation Managers was in my mind too much. And that led me thinking about how this type of org structure impacts the challenge we were trying to tacle by leveraging Advanced analytics. This made me thinking about how we are not thinking about leveraging Digital tools and capabilities in the wrong way. For this specific example, we should have started with certain other aspects of “imapct through Digital”, thereby showcasing that there is a path to thinking about Digital Transformation strategy.
But then, we are often dictated by executives, who are under tremendous pressure from Boards and Shareholders to show $$$ impact AND some advanced gains on the path to Digital Transformation (Truly learning Algorithms etc.). All of these can easily be achieved in the mid and long term, and in much bigger magnitude, if we can be brave enough to ignore these short term “a** saving” criteria.
So then the question is- what is a good way to think about Digital Transformation- specifically in a Supply Chain context ? I have a framework that I think should work great, at least in a Supply Chain context. True Digital transformation however, will not happen from siloed functional Digital Transformations and a robus Digital Transformation strategy will link the end to end aspects. In this article, I will share the first layer of my framework, that consistes of three S::
Thinking about everything in terms of the three S
SCALE: Think about your processes from the aspect of how you can leverage Digital tools to increase the scale of what is in the pipeline of your processes (WIP). An excellent example if the candidate drugs pipeline in Bio-Pharma R&D. There are multiple ways in which Bio-Pharma companies can leverage AI algorithms to expedite the discovery to drug cycle time AND get more candidates in the pipeline as well.
SERVICE: Can you leverage Digital to enhance your existing services or develop new service offerings. And you can easily see that “Scale” often forms the foundation for enhancing “Service” . This “S” does not always mean that you create a new service. Most of the time, it will enhance your existing service. Think about moving a package faster in your network, using the “Scale” S. This can help you either improve your customer service by delivering on time much more often but can also help you develope new service offering
SOLUTION: A solution is the epitome of Digital capabilities. If as an organization you are developing solutions, you have actually and truly mastered Digital. But the challenge is that unless you master the Scale and Service aspects of the three Ss, it is extremely challenging to develop this capability.
And this is what was happening in the case of the CPG company pilot that I have mentioned above. Jumping to a pilot directly in the area of Solution, while was extraordinary feat for our team, considering the solution we designed was extremely unique, there was a plethora of assumptions baked in (that we diligently identified in our documentation). But the fundamental opportunities, that could have been quickly relaized in terms of low hanging fruits, and would have made sense in terms of Scale and Service, were omitted. They may not have been as “Glamarous” but would have made more sense to proceed with, with quantifiable gains that would have been realizable sooner.
The initial current state mapping of Supply Chains for Digital Transformations needs to happen in a different context than Supply Chain Transformation mapping procesess that focus on process re-engineering/ org restructuring etc. In order to understand the SCALE, SERVICE and SOLUTION aspect of each element of your Supply Chain, you need to follow a different approach. This approach combines elements of Strategy, Process engineering, Lean, Supply Chain systems and AI/ML. That approach is outside the scope of this article but the gist is that leveraging our conventional Supply Chain transformation approaches may be steering us in the direction where we do not immediately want to go.
Views expressed are my own.