Power to the People: How Digitization Will Make Business More Human

Power to the People: How Digitization Will Make Business More Human

Like many of you, I got a new roommate over the holidays. Her name is Alexa. She’s great with trivia, we share the same taste in music and she’s a perfect shopping buddy. Amazon’s at-home, voice-controlled AI bot properly known as the Echo Dot and informally named “Alexa” is a demonstration in how new digital technologies promise to empower people.

As I started to learn about Alexa’s features, I half-jokingly said, “Alexa, order me the shower liner I ordered before.” I instantly had confirmation that my order was on its way and I received it the next morning. This was an aha moment.

In an instant, I realized two things. The first is some unwelcome news for retailers: for non-specialty, commodity type items, convenience is the way forward in mature markets and Amazon is owning this space. The second thought was the power that digitization can bring to humans.

AI and machine learning are newer to the conversation. Our Future of Supply Chain research shows how new technologies have increased over the last few years.

Graph showing 'disruptive and technologies' technologies with respect to supply chain strategy 2014 - 2016, based on a 3,493 survey respondents (from 3 surveys).

Each of these technologies, all working in concert with or augmentation to your existing technology portfolio, will empower humans across your end-to-end value chain.

Power to Consumers

Alexa’s AI is one example of putting power directly into a consumer’s hands. Consumer demand for convenience, choice and transparency are all new value propositions facing supply chain organizations.

Consider the fashion industry. After the Rhana Plaza factory collapse killed more than 1,000 workers in a garment factory, a social campaign called “#WhoMadeMyClothes formed to bring awareness to consumers about responsible supply chains. This campaign showed that 70% of apparel manufacturers don’t know where cut and sew processes happen and even more can’t trace the source of their raw materials.

This campaign is just one example of a trust-based customer value proposition. Supply chain transparency is driving value and shaping demand.

Kimberly-Clark Corporation (KCC), a finalist in the SCM World 2017 Power of the Profession awards for Supply Chain Breakthrough of the Year, is tapping into the power of consumers to have a positive impact on the planet with its “Trash Talks” program aimed at reducing waste to landfill.

KCC’s RightCycle program is an innovative platform to enable its professional customers to collect previously hard-to-recycle items. Items like nitrile gloves and single-use apparel are collected and then turned into eco-responsible consumer goods. From 2011 to 2015, the RightCycle program has grown from recycling just under two tons of material to 101 tons.

Finally, KCC is helping customers around the world recycle products after use. In New Zealand, it has a program to convert diapers into compost and, in Costa Rica, KCC is working to promote recycling drop-off stations across the country. These are just two examples of using the supply chain to create a circular approach to waste elimination.

Power to Suppliers

In the same way digital is creating greater visibility and connectivity to customers, so is it connecting supply networks. More traditional use cases like supplier collaboration, supply visibility and risk management are being advanced with IoT connectivity, big data analytics and cloud.

As supply chain extends its focus back into supply networks, you can create value not just for your largest partners but for all suppliers. General Mills, another 2017 Power of the Profession finalist, is working with suppliers of all sizes, even individual farmers, to solve supply quality, transparency and yield issues in a sustainable way.

Here is as small sample of initiatives to empower suppliers that General Mills shared:

“General Mills announced a strategic sourcing partnership with the largest organic cooperative in the U.S. that will help about 20 dairy farms add around 3,000 acres to organic dairy production over the next three years. Since 2009, General Mills has increased the organic acreage it supports by 120 percent and is now among the top five organic ingredient purchasers — and the second largest buyer of organic fruits and vegetables — in the North American packaged food sector.

In Sierra Leone, the Sweet Harvest Foods Africa Uplift project is helping to build scale in the growing honey industry. As part of this effort, General Mills and Sweet Harvest Foods helped establish Mel-O Africa as a registered business in Sierra Leone, contributing to the economy and local tax base. To date, 5,000 smallholder farmers have been trained as beekeepers.

General Mills plans to purchase all honey produced through the project. The rest of the beekeepers are preparing to contribute during the next harvest season. General Mills also has helped fund beekeeping equipment, including bee suits, supplies, tools and jugs. By the end of the 2016 harvest season, we expect to have purchased 1,000 drums containing 55,000 gallons of honey from these farmers.”

By investing in these initiatives, General Mills is creating value for consumers through improved transparency and simultaneously harnessing the power of suppliers to improve both business processes and supply chain’s impact on the planet.

Power to Your People

If you haven’t heard, a robot is coming for your job. A recent story in The Guardian shared that robots will eliminate 6% of all US jobs by 2021. While statistics like these paint a bleak future for your workers, the truth is more nuanced in supply chain.

Automation and robotics will replace any linear, repeatable task. It’s a fact we must accept. In many cases, however, digitization is going to augment and change our work. This change means a future with fewer of our known jobs today but also that new jobs will emerge.

In particular, highly skilled roles related to analytics, network design and business model design will only grow in importance. As technology connects your workforce it will spread information across all layers of your organization and challenge the traditional hierarchy.

Schneider Electric is an early mover on empowering its entire workforce. It has layered a Kinaxis solution across its SAP master data system to create a digital layer that brings visibility end-to-end. Schneider’s supply chain team is now empowered to simultaneously run hundreds of simulations by many different people, all in a connected fashion.

Schneider has democratized decision-making to all. This change is the way forward. As open source innovation and crowdsourcing have demonstrated, harnessing the wisdom of the masses is far more productive than isolated or autocratic processes. Digitization can bring power to your people and this is a very good thing.

The bottom line for COOs and CSCOs: digitization is coming and is shaping the future of work. Those who embrace the change now will have early picks into a very small talent pool.

Author Matt Davis

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