I recently conducted a digital supply chain roadmap workshop with a global high-tech organization that was attended by the CSCO and the supply chain leadership team. The meeting started with a representative of supply chain strategies sharing a summary of the most relevant, ongoing digital initiatives impacting the supply chain. It was an impressive list of initiatives touching every corner of the end-to-end supply chain.
The CSCO and the supply chain team were impressed, but they weren’t aware of all those initiatives impacting their supply chain. Individual supply chain functions drove some of the initiatives, while others were driven from outside the supply chain — from IT, sales and marketing, and R&D. Lack of orchestration and coordination among those initiatives was evident. The CSCO wasn’t in the driver’s seat.
CSCO, the Driving Force for Digital Supply Chain
This situation is still common across many organizations, but recent survey results suggest CSCOs are progressively taking the lead on supply chain digitalization. Those successful do so by creating an ad-hoc Center of Excellence (COE) for supply chain digital innovation.
In our Team of Tomorrow 2018 Survey, we investigated aspects of supply chain organizational structure and talent requirements in the light of digitalization strategies. I was especially longing to get results from one question: Who Is Driving Supply Chain Digitalization?
The picture that emerges from survey results is typical of a transition time, with three different, yet equally important approaches:
- For 30% of organizations, digitalization is not a matter of supply chain. Even when it’s impacting supply chain, it is the chief information officer (CIO), chief digital officer (CDO), chief technology officer (CTO) or others who are driving it.
- 30% of businesses take a siloed approach to digitalization, allowing it be driven by the needs of individual functions rather than by an overall digitalization roadmap for the benefits of the end-to-end supply chain.
- In the greatest chunk of respondents, or 40%, the CSCO drives an end-to-end supply chain digital roadmap directly, or in partnership with the CDO, CIO or CTO.
By digging further into survey data, a clear trend appears: the more mature the supply chain digitalization, the more CSCOs are in the driver’s seat. Nearly 50% of companies with an advanced level of supply chain digitalization have their CSCO driving the digital roadmap.
Center of Excellence for Supply Chain Digital Innovation
CSCOs cannot create a digital roadmap on their own. Survey data show that CSCOs from the most digitally advanced supply chain set up a COE to support the roadmap:
- Cisco – The company’s Supply Chain Transformation team plays a critical role in enabling the supply chain to adapt rapidly to the changing needs of the business. With digitalization becoming one of the core drivers for Cisco’s supply chain strategy, the team is essential in driving the digital journey. This team’s goal is to ensure that Cisco’s supply chain is able to capture the values that digital technology offers, while the company transforms its products, business model, operations processes, systems and policies.
- Schneider Electric – The company’s Global Supply Chain (GSC) organization created a multidisciplinary, centralized lab called Center of Digital Innovation (CODI) to incubate new ideas and bring digital technologies to the supply chain team quickly. CODI allows for small, focused teams to address supply chain digital projects with a minimal amount of bureaucracy, thereby accelerating digital innovation. In 2017, CODI identified 111 new digital opportunities, tested and evaluated 45, and ran proof of concept on 25 projects.
Successful COEs report to the CSCO directly, but members do not have operational supply chain responsibilities. They must have the time to create a roadmap, without being caught up in day-to-day issues. This isn’t any supply chain team: members must feel comfortable trying things that might fail. They must celebrate learning from failures. Their mindsets must be about seeking innovation rather than optimization. This is a cultural revolution for supply chain and CSCOs must drive by example.