Equipping supply chains to mind the gap between importance and preparedness

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A really nice analog watch, or a “timepiece,” as I’ve been corrected, is still a status symbol, although one that does not have to tell time anymore. On the other hand, many people turn to phones to check the time or act as their alarm clock. Those who do wear watches may have a computer-like smart watch strapped to their wrist.

The smart watches that have become increasingly prevalent for today’s consumers are loaded with functionality that tracks their fitness activities, answers phone calls, plays music, and can even alert users if they are having a heart attack. However, as empowered as their devices are, it is not unusual for a user to be completely unaware how to make use of the advanced functionality. As much as these types of users spout details about how important the functionality is, they’re not equipped to use it.

Unfortunately, the supply chain community looks to be in a similar place. As part of SCM World’s recent “Team of Tomorrow” survey, we asked members of the community to give their impressions about how important certain skills and capabilities are to their organization. Roughly 80% of the community felt that the ability to create innovative strategy or increase execution agility through advanced digital technologies was either “very important” or “important” to their company. Traditional skills like collaboration, communication, and change management ranked highest and were “very important” to over 90% of respondents.

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However, when asked to assess if those in their organization are able to use these capabilities, only 20% responded that they are “very well equipped” or “well equipped.” The fallout of 57% of respondents represented the largest gap between important skills and the ability to use them in the entire survey! When pressed for how to bridge that gap, we often hear a litany of roadblocks ranging from bad data and disjointed systems, and even that the company is either too big or complex to equip everyone.

The argument about company size, however, is a misnomer. In fact, one-third of the biggest of the companies that responded — those that reported revenues of $25 billion or greater — felt they were equipped beyond the average level of the community for digital strategy and innovation; that sentiment is 13-15% greater than those of their smaller peers. Dipping below that $25 billion threshold, those in the remaining buckets exhibit largely similar characteristics, although the smallest of companies have a higher likelihood of being equipped for digital strategy and innovation at below average levels.

 

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The easiest part of the process is in acknowledging the gap between importance and preparedness, and how digitally unequipped organizations are in general. Turning that understanding to action is where true development occurs.

Forward-looking supply chain leaders will avoid excuses and instead inspire growth by both acknowledging the gaps that exist and stating how they are being addressed, in a single sentence. For example, “We know that our organization is currently underequipped to create innovative strategy or increase execution agility through advanced digital technologies, and we have already begun to close that gap.” That single statement becomes the impetus for action, paving the way for programs to be introduced to equip the organization for digital strategy and execution, such as:

  • Hackathons – An HBR article proclaims that “companies far outside the tech world are using these intense brainstorming and development sessions to stir up new ideas on everything from culture change to supply chain management.” Cisco’s success is one established example, and many other companies, large and small, are seeing the benefits too.
  • Innovation labs – Whether it be through internal programs, like Stanley Black & Decker’s Digital Accelerator or partnerships with external providers like Kenco Innovation Lab, companies are making a concerted effort to find the desired end-state and then prototyping solutions that use digital technology to enable advancements in both supply chain execution and strategy.
  • Digital road-mappingSCM World’s Matrix is one example of how companies build a step-by-step prioritization of the capabilities necessary for success in a digitalized future. Connecting the “as-is” with the “to-be” allows companies to go beyond identifying general gaps and focus on the mix of sense and respond, and supply and demand capabilities that the organization must be equipped with.

 

Your questions and feedback are always welcome via email at [email protected], or via Twitter @pvanhull.

 

Author Patrick Van Hull

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