May 31, 2017

Gartner analysts urge supply chain executives to "aspire, challenge, and transform"

Conference suggests strategies for taking advantage of disruptive technologies.

By Toby Gooley

For the 1,900 supply chain professionals who attended the Gartner Supply Chain Executive Conference, held May 23-25 in Phoenix, Arizona, disruption has become a way of life. Indeed, much of the conference agenda was devoted to disruptive business conditions and technologies, including ways companies can harness them to gain a competitive advantage.

Under the headline "ACT: Aspire, Challenge, and Transform," Gartner Vice President and Distinguished Analysts Debra Hofman and Michael Burkett suggested that supply chain managers should do more than cope with and manage disruption; they urged attendees to instead engage with disrupting influences to lead their companies to long-term success. Toward that end, they prescribed a three-step approach: "envisioning," or redefining the supply chain in order to meet future demands; "challenging," or confronting changing expectations and requirements; and "architecting," or building an organizational and technological foundation that will provide the capabilities needed for future supply chains.

"Envisioning" involves three main focus areas. First, successful companies recognize that the customer experience is "the new battlefield of competitive differentiation" and will provide new customer experiences delivered through technology-enabled, socially responsible supply chains, Hofman said. Second, they will participate in "virtual ecosystems": interdependent business networks that foster and enable collaboration across the value chain. This concept is not new, but newer technologies such as the Internet of Things and the application program interface (API) methodology for building software applications will allow these ecosystems to proliferate, grow, and connect with each more quickly and easily, Burkett said. The third focus area will be an intelligent supply chain—one that learns and improves on its own. Artificial intelligence—already being used in supply chain applications by a growing number of companies—will allow a supply chain to become "a dynamic and self-adapting organism, anticipating customers' needs, predicting changes, and autonomously making changes to adapt to circumstances and prevent problems," Burkett said.

The "challenge" part of the journey involves rethinking conventional wisdom and developing the ability not just to innovate quickly, but also to scale that innovation more quickly than in the past, Hofman said. This will only be possible with the right skills and talent in place. Even the most tech-savvy managers will face some new requirements as people are augmented by machines throughout the supply chain. The burning question for supply chain managers right now, she contended, is: "Are you ready to manage the convergence of people and machines?"

To "architect" a foundation for engaging with and taking advantage of new and developing technologies, companies must have a digital supply chain strategy, Burkett said. A key element of that strategy is a cohesive "digital platform" that defines how a supply chain will operate in the future. Such a platform, he explained, consists of five areas that must work together: information technology systems, customer experience, the Internet of Things, virtual ecosystems, and artificial intelligence.

Today's textbook tactics and strategies will not succeed in a technology-defined future, the analysts said. Gaining a competitive advantage from constantly changing technologies and business requirements will depend on having "cognitive diversity," or the ability to look at the supply chain from different angles. Leadership, Hofman said, will need a "diversity of thought guided by a common purpose," with the aim of breaking through assumptions. That, Burkett added, will require replacing traditional, static organizational structures with a flexible, responsive workforce with digital skills and a "beginner's mind"—a Zen Buddhist term for someone who has no preconceived ideas and therefore has the ability to solve a problem in a fresh and unexpected way.

About the Author

Toby Gooley
Senior Editor
Before joining DC VELOCITY and its sister publication, CSCMP's Supply Chain Quarterly, where she serves as Editor, Toby Gooley spent 20 years at Logistics Management covering international trade and transportation as Senior Editor and Managing Editor. Prior to that she was an export traffic manager for 10 years. She holds a B.A. in Asian Studies from Cornell University.

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