10 Signs of Supply Chain Transformation from CSCMP Edge 2017 (Part 1)

Posted by Martin Verwijmeren on Sep 28, 2017 1:35:46 PM

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This year's CSCMP Edge conference was as lively as ever with deep discussions and conversations with and between attendees on how we can continue to evolve, transform and innovate the supply chain discipline. Through my attendance of several sessions, speaking to practitioners in attendance and networking with other technologists in the expo hall, it's obvious that supply chain is in an incredibly exciting place to drive business value.

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The combination of views and insights left me with a number of key trends that I heard time and time again from the audience. Here are the top 10:

1. Customer Centric Supply Chains are deemphasizing cost metrics for value metrics

It's no secret that that supply chain has an impact on customers since it touches every one of them, however, a consistently repeated theme throughout the event was the impact the supply chain and our ability to deliver a great experience has on customer retention and growth. And most importantly, we're seeing that organizations are beginning to measure customer and sales related impacts of the supply chain as core metrics of success.

We saw this in many sessions. Schneider Electric's Brian Tessier spoke about using Net Satisfaction Score (i.e. NPS) to understand the impact of supply chain on core customer segments. Whirlpool's Aesha Browne underwent a supply chain transformation process to better serve their niche markets and made sure to include product availability and customer sales improvements in their metrics of success. Monsanto's Mario Morhy leverages NPS as the core determinant of overall supply chain and customer success. They actually have combined the functions understanding that overall customer experience is impacted by the synergy of all customer interactions with the company.

Now the header here is a bit deceiving as cost metrics are still incredibly important and still expected by the executive level for the supply chain but we're seeing a greater shift in focusing on the value provided in the supply chain vs. reducing cost as the sole driver of supply chain success.

2. End-to-End Supply Chain Visibility requires Multi-party integration

Supply Chain Visibility is always a hot topic among the supply chain community and everyone has a different definition for it. What we heard at the conference is that the definition is expanding greatly from what we've seen to be much more holistic in the supply chain. Organizations are moving past just pure track and trace and visibility into transportation delivery and are looking to drive visibility across all the parties (suppliers, 3PL, service technicians, brokers, carriers, etc.) and stages (manufacturing, pick & pack, repair, etc.) in the supply chain to make more complete supply chain decisions.

In the Supply Chains to Admire session, Lora Cecere showed the key "Room for Improvement" areas for supply chains and one of the top five was Visibility. It was explained that visibility especially among suppliers and third parties was lacking for organizations.

What's getting in the way is our ability to integrate all the parties and systems we have. Most legacy systems were not built to look across the end-to-end supply chain and truly collaborate outside their four walled silos. Multi-enterprise supply chain orchestration solutions are needed in order to truly collaborate and drive continued improvement across all the parties and solutions.

Another interesting perspective here was with the third parties themselves. JB Hunt mentioned how customer demands have been rising recently but the lead times in terms of understanding quantity and timelines for shipments were still given much too late. They get a lot of questions around "where's my shipment?" and the response is usually "where's my order?" If we can provide better visibility into our expected plans to our third party partners, they can in turn help to better plan the execution of our needs that will lead to better performance overall.

3. Increased Variability in Customer Requirements is the Norm, Not the Exception

There is no question that customer requirements are increasing and not just in B2C but to B2B as well. Conagra's Craig Weiss stated that they have customer requirements and needs that are changing every day adding complexity in how they serve these customers. While in the past this could be handled on an exception basis (i.e. they handle requirements for a few customers on a one-off basis), that is not possible in today's world since all customers are asking for more every day.

It's no longer possible to just throw more man hours toward a demanding customer, we now have to become more efficient and agile to customer needs because every customer is demanding more specialized services and requirements. This is not going to change and therefore we need to build agility into our supply chains to handle the increased quantity of specialized requirements on a mass scale.

4. Operations and Execution still king over Blockchain, AI and Big Data

As always, Blockchain, AI and Machine Learning had a ton of interest in the sessions. However, in talking with practitioners and hearing the questions from attendees, most still are not mature enough in their operations to make in-roads with these technologies (and these technologies are still trying to get their footing in practical applications in the supply chain).

Much of the focus of the discussions were ground and execution level around how to manage the movement of goods across the end-to-end supply chain. The "Amazon Effect" was top of mind for everyone at the conference but it really manifested itself in the how the increased customer expectations impacted how nimble and agile our supply chains need to be.

Johnson & Johnson spoke about the increased demands and how agile processes were needed to fit faster lead and delivery times. In the Omni-channel session, we spoke about the high variability of customer options in terms of ordering and pick-up between online and store and the impact not only on the retailer but also on the B2B suppliers who are forced to execute on these customer options for their customers.

5. It's Not About Big Data but the Right Data (and Questions!)

Big data is a buzzword but there are some really interesting applications that are starting to develop that could have impacts on the supply chain. However, a critical component of Big Data and data in general is the ability to measure and ask the right questions to measure. While Big Data can provide insights, we still see organizations that are unable to measure or get visibility into core metrics that determine supply chain success.

What I found most interesting was in Supply Chain Insights evaluation of the Supply Chains to Admire is the dynamic between cost and performance and how most organizations (1 in 10) having little to no control in driving both in their supply chains. As supply chain and the customer experience associated with it continues to become more important in retaining and obtaining customers, organizations need better executional visibility and control over these processes including lead times and transportation, inventory costs, capacity costs and impact on customer value and acquisition. Right now many organizations are still purely cost focused on how they determine supply chain success but we're seeing organizations that take a more value based approach outperforming their peers.

Those were the first 5 insights from the 2017 CSCMP Edge conference.

10 Signs of Supply Chain Transformation from CSCMP Edge 2017 (Part 2)

Topics: Supply Chain Orchestration, Supply Chain Visibility, Supply Chain Transformation

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