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Has COVID-19 Invented the 10X Supply Chain?
Surendra Kancherla Principal Architect - Digital Technologies | June 5, 2020
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Not really! But it has definitely forced us to think of one. There’s ample proof that the technologies currently used by established firms to manage their supply chains do not work during a crisis such as the COVID-19 pandemic. This is the time for firms to reflect on how to get their supply chains to work smart, not hard, by leveraging the latest in technology. And the best (or the worst part, depending on how you look at it) is that proven supply chain technologies are already available—it’s just a matter of opening your eyes!  

Most of the industry has held on to legacy habits, lacking the vision to invest wisely in emerging supply chain technologies. The lack of agility in supply chains and the failure to use valuable data has held back firms from predicting accurate supply and demand levels for their customers. This has resulted in business losses, not to mention the loss of lives and livelihood, caused entirely by ignoring the many technological advancements of the last ten years.

This period will be epochal in defining which businesses will survive after COVID-19. The correlation between success in the next 5-10 years and learning the right lessons will be high. Here are a few lessons that make it practical to achieve a ten-times supply chain right now:

  1. The problem of technology Luddites   

    A few 100 MB of video files can be exchanged with hundreds of friends in 350ms anywhere in the world, but it takes days to exchange a few KB of documents on a supply chain. And this is leaving off EDI and nowhere close to APIs/microservices! Why? Technology is available, but not used. While some firms in full control of their technology and business models managed to leverage such 1000X advantages, the vast majority is not even raising this question. Push your vendors and technology partners to find ways that are possible and proven.

  2. The supply chain not as business enabler vs. business model enabler

    Perhaps from now on, no one will need to justify why supply chains need to be considered a strategic asset, requiring the board/CEO’s full attention. The supply chain is not just meant to be delegated to operations for cost efficiencies, but will also enhance your revenues and generate new business models if structured well. Not appreciating the value of supply chains at the strategic levels is inviting serious trouble—not just for quarter-on-quarter revenue growth, but even in the 2-3 years’ term.

  3. Executive leadership, anyone?

    While CXOs delegating their supply chain decisions to operations heads might have worked in the non-tech world, it does more harm than good right now. It is important to realize that by delegating the forward-looking decisions on emerging supply chain technology and functional decisions to your operations heads, you are relying on legacy knowledge. In spite of the best of intentions, someone with operations background, but without technology and business strategy moderation, is not a fair bet for digital supply chain decisions. CXOs must be involved on a hands-on basis in building business cases to enable seamless front-end experiences for customers.  

  4. Use data, don’t throw it away

    Supply chain data is the most granular (even without the luxury of IoT or sensor data), primarily due to the nature of physicality involved in supply chains. Firms can integrate the physical with the digital to enrich the data and apply models to enable better forecasting and prediction. While many legacy businesses are throwing away a substantial amount of data or capturing it in silos, the digital elite has been enriching data and using it intelligently. This aids not just in operational efficiency but also to whip up different operating models, and even compete with new business models.

  5. Apply machine learning applications even on legacy data

    Existing data can help to leverage machine learning (ML), given the rich business context it carries, to derive operational/business insights right away. There is no need to wait for emerging technology outlays such as IoT or blockchain to come to your rescue. One can always add rich data from IoT incrementally, but leveraging existing data, which is very rich in your current context, only needs your aligned mindset and, of course, some readily available ML toolset.

  6. It’s right there in front of your eyes!

     10X supply chain is being practiced even as we speak by several technology-first firms—from Amazon to hundreds of start-ups. It is vital to understand how things are done differently and the business value of doing so. For example, do we really need warehouse workers to punch in/out for every five-minute washroom break? Or, can we use technology to make them more efficient while providing more dignity to the workers? The future of warehouses is changing. So, companies must not only improve supply chains but also guarantee the health and wellbeing of employees.

  7. It is the business case 101! Handle the resistance to change

    By using the digital supply chain tech approach (by putting the above to practice), you can improve supply chain agility and take a leap toward demand-chain. This will save costs, improve resource utilization, add up to your revenues, and open up new business models.

Recent research on customer experience by Dr Mohamed Zaki, Deputy Director of Cambridge Service Alliance at the Institute for Manufacturing, University of Cambridge, suggests that the digital supply chain will bring tectonic shifts to the industry’s operating efficiencies as “customers (internal user or external user) are looking for a delightful experience. Firms have a lot of data that is extremely valuable for fine-tuning business processes to satisfy their customers. Going by my current research on customer experience, entire industries are moving away from pure technology solutions to experience-driven solutions, all anchored around customer /user/employee experience and enabled by digital advancements that are not fully leveraged by the industry in their supply chains so far.” The least we can do is learn from a crisis!

HCL is proud to be a strategic digital services partner of the prestigious Cambridge Service Alliance. As the only technology services partner on the CSA’s steering committee, HCL is working with researchers from the University of Cambridge and other CSA top-tier partners to define and develop services and solutions of tomorrow. The Cambridge Service Alliance brings together the world’s leading firms and academics with interest in complex service systems to conduct insightful yet practical research to improve the design and deployment of high-performance business systems. To join the Alliance or know more, please write to cambridgealliance@hcl.com.