I have been talking digital supply chain with people for several years now and the original sense of awe and potential has, for many, matured into a kind of glutton’s hangover. We’ve packed everything from master data to drones and blockchain into the same 12-course menu of “transformation” and created a monster.
My colleague Pierfrancesco Manenti talks about “digital obesity”, which seems an appropriate analogy for anyone who has ever had too much of a good thing.
In the broadest terms, digital holds promise for supply chains by bringing exponential improvements in speed, agility, transparency and personalization. We expect to sense demand and supply instantaneously, accurately and with precision. We also anticipate supply and demand responses that are ultra-efficient, customized and even circular. Plus, we imagine an all-seeing control tower offering planners unlimited visibility and command.
It is a marketer’s dream. Cool-sounding technology breakthroughs such as 3D printing and artificial intelligence applied to core processes such as part fabrication and S&OP absolutely offer advantages. Unfortunately, business leaders, pressured as they are by investors, sometimes push for too much change at once.
The resulting overloaded “digital transformation” morphs from dream into nightmare as expectations get out of control and reality sets in. Costs grow, timelines lengthen and skills fall short. This will sound familiar to anyone who lived through business process re-engineering and big-bang ERP implementations in the 1990s.
For most of you this fate is still avoidable. The key is to recognize what’s different this time and use a road-mapping approach to take one practical step at a time, while keeping a clear line of sight on the goal.
The Matrix as a Road-Mapping Tool
SCM World, driven as always by the will of its practitioner community, set out several years ago to create a one-page view of digital transformation meant to serve the chief operating officer. The work drew heavily on C-level discussions, as well as survey data comprising the views of thousands of supply chain practitioners around the world. The final picture was a simple but powerful way to attack the problem of digital transformation without biting off too much at once.
Using the Matrix starts with mapping your as-is digital reality against the five universal capabilities shown in the graphic above. What this looks like in practice is a lot of different systems, mostly disconnected and many out of date, held together by people with spreadsheets, meetings and phone calls.
Next, the work moves on to envisioning the to-be. In principle, this is where a diverse team of supply chain, IT, and business people debate where and how they’d like to see change. Equipped with a thorough understanding of what’s there already (the as-is), and a view on how the business needs to operate differently, it is possible to choose specific investments that will bridge existing gaps and make things better.
In practice, however, the to-be discussion often stalls as people face the harsh reality of how far they really have to go. It can be a frightening echo of hard lessons learned back in the ‘90s with early ERP systems.
But fear not, this time is different and the Matrix is specifically designed to take advantage of that.
What’s Different This Time?
There is no big bang. ERP mega-projects often included everything. Systems architectures of the time encouraged an all-or-nothing approach that was meant to pay off in the end, but not along the way. Very few big supply chains ever got there. And even when they did, acquisitions often messed it up anyway.
Now we work in a world where consumer technologies such as mobile devices, GPS and AI-enabled chatbots bring innovations into productive life constantly. The digital supply chain of today sits in the cloud where anyone can launch an Uber pilot within weeks.
It’s a drumbeat of change, not a one-time explosion.
The Matrix is conceptually integrated with powerful Gartner tools like Magic Quadrants and Hype Cycles. It is meant to help anyone from your CEO to technology vendors see exactly where you expect results and what the existing playing field looks like – one step at a time.