It’s no secret to anyone that the world is changing.
Change is one of the few constants in business. More than the recognition of change, it’s important for business today to characterize the nature of change and develop what it needs to consistently adapt. As a recovering supply chain executive, now academic instructor, I am afforded the opportunity to talk to supply chain practitioners, technologists, and thought leaders to better understand how change is affecting business and the supply chain.
The North American Gartner Supply Chain Executive Conference was held in May in Phoenix, AZ and a key theme of the conference was Digital Business and how those models challenge our notion of how we apply analytics and technology to the supply chain. While there’s no question the topic is relevant, in my discussions with many business leaders, I find there is an even more fundamental reality affecting global supply chains today.
I had the honor of moderating Elementum’s customer panel on precisely this topic at the conference, where we discussed the approach some of the biggest and most innovative companies are taking to tackle their supply chains in the face of this changing world.
My fellow panelists included CPO of Tesla, Peter Carlsson; GM of Global Supply Chain from Microsoft, Jeff Davidson; Chief of Staff for COO Jim Rowan at Dyson, Kenneth Lai; and CPO of Johnson & Johnson, Anu Hans. Each detailed how they're leveraging big data, graph, and mobile technologies to transform their supply chains. This post details the important takeaways from that session.
The effect of globalization, lean supply chains, and the sheer power of customer choice have all had a disruptive impact on global supply chains. By around 2005, many companies were finally getting control of their domestic supply chains only to realize the greater value was in conquering the global supply chain. Moving from a domestic to global focus creates an order of magnitude increase in complexity and for many companies; their existing capabilities were inadequate to the challenge.
Over the last decade, new technologies and processes for managing global complexity have emerged. These solutions have evolved from four major lessons that innovative global businesses have learned as they’ve tackled this complexity problem:
1. Speed Actually DOES Matter: When the Internet first emerged, everyone talked about speed, but frankly it was misplaced. Back then, speed was a euphemism for “sloppy” and often resulted in companies doing things poorly very, very fast. This isn’t the case today. In a global supply chain, speed is efficiency. The ability to move quickly, adapt rapidly to changing environments, and keep product moving through the pipeline is the difference between lean and efficient, and bloated and bankrupt. Speed enables companies to manage complexity by staying ahead of it.
2. Healthy Paranoia is Good: In a globally complex supply chain, things will go wrong. Risk management, alone, doesn’t solve the problem today. In talking with top supply chain leaders, driving a culture of transparency and collaboration around the needs of the customer as the first priority is one that is healthy and recognizes the reality that failure, at some level, is inevitable. How the organization responds to issues that arise, rather than reacting to them, is what makes them great.
3. Compartmentalizing Complexity: One of the most valuable developments in technology around analytics is the emerging capability of compartmentalizing complexity to creating a composite view of the supply chain in a truly understandable way. The challenge is that there are very few companies that can do this and most of the models are not scalable to the levels of complexity needed on a global basis. Most companies apply business intelligence principles and can provide summarized information across a variety of discrete processes and then present this in a combined form. Unfortunately, the interrelationships between these discrete processes, the dependencies, the up and downstream impacts, are missing. There is one solution that approaches the problem differently and is modelling the global supply chain and its $30 trillion product economy in a way that models the interactions of the upstream and downstream supply chains. Further, world events are also captured and applied to the model along with the businesses own processes, order times, customer requirements, and supplier relationships. Taken together, the company, Elementum, enables its clients to have a real-time, global, transaction relevant view of its entire business. It’s as close to a Holy Grail for business that exists today.
What today’s industry needs is a graph similar to Facebook’s social graph, and LinkedIn’s professional graph, that makes sense of the world’s $30 trillion product economy. This “product graph” is what Elementum has set out to build, and if my co-panelists are any indication, they’re already well on their way to digitally mapping the world’s product economy.
About the Author
Jim Hendrickson is a Senior Lecturer at The Ohio State University where he teaches logistics and supply chain to the next generation of supply chain professionals. Prior to this, Hendrickson was an executive for over 30 years in several fortune 500 companies including General Electric, IBM, Pitney Bowes, AT&T and Ernst & Young where he developed supply chain solutions and technology for global business. He began his career as an Army Officer obtaining the rank of Captain.
By Shirin Ghaffary - January 26, 2015
As millions of American in the Northeast prepare for one of the most powerful blizzards in the region’s history, suppliers who manufacture or ship in the area should also take precaution.
Winter Storm Juno, expected to hit Monday night, has been...Read more
By Janie Ryan - December 20, 2017
Retailers are in the midst of the country’s most frenzied shopping season. The holidays never fail to draw out shoppers in droves, and this trend — rivaling in popularity humble holiday traditions like cozying up with hot chocolate — shows no...Read more
By Rob Cheng - May 23, 2019
What stood out most about last week’s Gartner Supply Chain Executive Conference was the emerging consensus around the importance of Sales and Operations Execution (S&OE). There were multiple sessions in the agenda on this topic, but the one that...Read more