As the curtain closes on another Gartner supply chain executive conference, I feel wowed by the rapid changes we are seeing in supply chain.
Twenty years ago supply chain was a little understood, expensive cost center. Today, supply chain has been elevated to board level, driving growth and competitive differentiation for those who are advanced enough to see the opportunity.
The theme for the supply chain conference in London: “Move to Mastery: Innovate, Disrupt and Scale the Digital Supply Chain.” Deliberate in our choice of words, the aim was to entice supply chain leaders to gather and discuss what it takes to “master” supply chain in the digital age.
Leaders are no longer just talking about building foundational capabilities and taking years to do so. They understand that digital means customers and consumers are empowered with new technologies, with a strong desire to be informed. Speed differentiates modern supply chains in a world where on-demand is the new normal.
The road, however, is still full of peaks (inflated expectations) and troughs (disillusionment) as Simon Bailey, Gartner research director, pointed out in the opening keynote. Digital supply chain transformation is still being impeded by a lack of stakeholder buy-in, and innovation remains a challenge to execute. While company leaders may be willing to spend for a pilot as part of an innovation activity, they will conduct much more due diligence before making investments to scale. As with any transformation, progress often comes down to these stakeholders understanding why it matters to them and how it impacts their metrics.
At the cutting edge of digital in supply chain, leaders are still trying to clarify the hype of blockchain and the application of artificial intelligence and robotic process automation. They want to understand the real use cases and what adoption looks like in two to three years across industries.
Dana Stiffler, Gartner research vice president, countered in the opening keynote that people are the secret to digital. This was echoed by Unilever Chief Supply Chain Officer Marc Engel in his keynote session, when he emphasized the importance of the human element in building supply chain mastery. The thought leaders remind us that building a bimodal workforce that delivers excellence in execution, as well as getting into the disruptive innovation zone, is the ultimate panacea for the digital challenge.
It came as no surprise that hot topics like Brexit, international trade and tariffs were key talking points for supply chain executives. To varying extents, companies have been assessing the potential impacts of these external forces on their supply networks. Many are attempting to counter disruption and risk with alternate fulfillment models to ensure business continuity. For some industries, these disruptions intensify the challenge, while others see them as an opportunity to win in the fight for the consumer.
Few industries have been feeling the pinch of disruption more than retailers. Thomas Eichhorn, senior vice president of global logistics and distribution at Adidas, reminded us that “in order to keep up with the pace of change we need to play a different game.” Eichhorn shared how Adidas is mastering its capabilities in managing the complexity of a multinode distribution center network focusing on decentralized inventory models and vertical inventory pooling while investing in the right technologies to keep costs down. Other companies, like ABB in the industrial technology sector, shared how centralization of global business services helped speed up the pace of their transformation. Their message: simplify in order to offer a more rapid response to customers on a global scale.
So with sights firmly focused on the future of supply chain, we gather our collective views to identify the supply chain mega-trends — a focus on the total customer experience, scaling digital, and building a sustainable circular supply chain.
Along their move to mastery we learned that many companies have now advanced from the “way things have always been done” and set a new course. They have resequenced their value chains from the customer back. We recognize these leaders as part of our European Top 15 and eagerly watch to see their next moves in the journey to mastery.
Lisa Callinan, a Gartner Senior Research Director and Analyst, served as chair of the supply chain executive conference in London.