Gates’ Law: “Most people overestimate what they can achieve in a year and underestimate what they can achieve in ten years.”Bill Gates
Today, my goal is to finish the agenda for the Supply Chain Insights Global Summit. The objective is to create the right environment for business and technology leaders to ideate together. Through case studies, research, and facilitated discussion, we will jointly imagine the possibilities for Supply Chain 2030.
When I started the event in 2012, the focus was on 2020. At that time, the challenge seemed daunting. As we begin the new decade, 2030 feels the same. I find solace in Bill Gates’s quote, “That most people overestimate what they can achieve in a year and underestimate what they can achieve in ten years.” I find it true. For example, ten years ago, speakers postulated that 3D printing and autonomous cars would be a reality in 2020. We were too optimistic. Today, we celebrate the advances, but our views are more grounded.
Today, hype centers on transport telematics and artificial intelligence. Pain abounds in the areas of global logistics and corporate social responsibility. Supply chain leaders and venture capitalists love to chase shiny objects and play with buzz words. Business leaders need answers. The focus is on the last mile, but what about the first mile where Distribution Requirements Planning (DRP) and Transportation Planning (TMS) operate on different data models with fixed, often outdated, parameters?
Imagining The Future
My inbox is always full of easy answers from technologists new to the market. My struggle? Supply chain management is anything but easy. The newer that someone is to supply chain management, the easier the answers appear.
The event focuses on five themes—driving competitive advantage, reaching the right balance between innovation and standardization, transforming logistics, harnessing new insights from analytics, and redefining work. Finalizing speakers—in the face of the Delta Variant—is like herding cats. In my preparatory discussions, there is an eagerness to participate in the conference, yet hesitancy on how to move forward in the face of the ever-changing COVID-19 threats. Attendees are hopping between the online and in-person options. Watching the Olympics end successfully gives me hope that required vaccinations, testing, and masking will get us through an unpleasant cycle.
As I reflect on the last decade, I note that the industry is better at implementing technology than driving process innovation. Consultants are very motivated to sell the technologies they know (often with kickbacks for the recommendation). The layering of advanced technologies on yesterday’s processes doesn’t get us very far.
I believe the Pandemic is far from over. The length of the Pandemic is anyone’s guess. One thing is clear: unlike other risk management events in our history, there will be no new normal for the supply chain leader. Buckle your seat belt. We will be riding the bumps of demand and supply variability for many months, even years.
As demand and supply variability increase, the world of the supply chain leader becomes more “gray” while the traditional technologies focus on black and white snapshots of data. In the journey, simulations, “what-if analysis,” and machine learning grow in importance. The job of planners becomes more like a weather forecaster.
Looking Back to Look Forward
To postulate future scenarios, I find it helpful to look at the significant events over the last five decades. In Figure 1, I highlight the significant shifts in my lifetime:
Just four decades ago, McKinsey coined supply chain management as managing source, make, deliver, and plan together. In some ways, little has changed; in other ways, a lot has happened. I alternate between feeling like I am treading water and being excited. It is hard to manage one’s self and stay grounded.
Let’s examine the shifts. The evolution of client-server technology improved solution scalability and accelerated supply chain planning and optimization adoption. In the 1990s, supply chains were regional, and the problems simpler. With the evolution of regional to global supply chains, the issues became more gnarly.
The supply chain is a complex non-linear system. With the expansion of the global supply chain, complexity and non-linearity increased; yet, the organizational focus was on implementing traditional applications. The post-Y2 K decade accelerated spending on Enterprise Resource Planning (ERP), believing that improved ERP systems could drive enhanced supply chain value. Better and cleaner transactions pushed organizations further into the world of black and white as the world became grayer.
The great recession slowed IT spending and accelerated supply chain team development/consolidation. Business process outsourcing accelerated. Centers of excellence evolved in countries like Guatemala, Ecuador, Poland, Singapore, and China. Training and onboarding these new teams required rethinking the organizational design. Few took the time to define supply chain excellence, and only 9% actively designed supply chain flows.
In 2011-2014, companies experienced unprecedented growth, but the gap between commercial and operational teams grew. Companies focused on functional excellence, and in many organizations, the supply chain became a function within a company with inside-out processes with less and less flexibility.
Starting in 2014, business resilience in 26 of 28 manufacturing and retail sectors began to decline. Faced with falling margins and increasing inventories, companies focused more and more on financial reengineering, pushing costs and waste backward in the supply chain.
Then the Pandemic hit. Companies scrambled as they realized there would not be a new normal. Initially, companies were reactive. Slowly there is a realization that historical approaches are not equal to the challenges in the COVID world.
Future Trends on My List:
So, as we move forward, what will the next decade hold? How do we improve work? Here is the list that I am taking into the conference:
- Interoperability. Rise of A Logical/Unified Data Model and Ontological Reasoning. For the past four decades, the primary focus was on efficient and tightly integrated supply chains. Unfortunately, these architectures are brittle and fragile. They cannot sense to drive an intelligent response. Traditional approaches are inside-out, not outside-in. Moving from inside-out to outside-in processes requires rethinking technology. Companies quickly realize that most of their applications are legacy, but the shifts cannot happen overnight. As a result, there is a focus on building a unified data model and improving interoperability to embrace disparate data.
- Democratization of Planning. We have self-service HR and finance, so why not self-service planning? How does the work on the digital twin unlock the potential for the more significant corporate efforts to improve decision support?
- Building of Gray Processes. With the rise in variability, supply chain decision-making hinges less and less on transactional (or black and white data discussions) and moves to gray processes to enable simulation and probabilistic learning systems. Planning organizations become more like weather forecasters with variability modeling in scenarios based on probabilities using market data.
- 2-D to 3-D Visualization. 3-D printing moves past the hype cycle to reality as an alternative sourcing strategy. New software helps companies bridge the 2D to the 3D world, requiring rethinking design and manufacturing processes.
- Getting Serious About The Planet. Value network strategies emerge as companies realize that over 70% of non-renewable resources are in their networks, and they are not good at it. Today’s self-centered business models preclude interoperability and companies lack organizational design to build and support value networks.
- The Emergence of a Good Shipper Model. Enhanced network capabilities enable the tracking of the elements of a “good shipper.” Price and availability of transport stratify based on shipper behavior.
- Hyper-visibility. The focus on authoritative identifiers and network capabilities gives hyper-visibility to track components and streams across continents and modes.
I look forward to the dialogue at the Global Summit. I will be sure to share.
Preparing for the Supply Chain Insights Global Summit
The Supply Chain Insights Global Summit is happening on September 7th-9th in Franklin, TN.
All in-person attendees must be vaccinated. Doing a conference in the pandemic is a risk. To help ensure global coverage, we will also have a virtual feed hosted by Supply Chain Now for those unable to travel.
The goal of the conference is to Imagine the Supply Chain of 2030. We expect 100 attendees to attend in person and 1000 to join us virtually around the world. We design each experience for extreme networking.
In preparation, I am handpicking the speakers, finishing up the results of the recent analytics study, and testing the results of outside-in processes in Project Zebra through testing with BSH and Western Digital.
If you have a story you would like to share at the conference; please drop me an email at email@example.com. Mark your calendars to join us to think differently and Imagine the Supply Chain of the Future.