You might think that highly customized supply chains only apply to large eCommerce chains. The common wisdom says they're expensive to create and deal with a large threshold of transportation. In reality, small-to-medium-sized shipping operations can learn a lot from the way a custom supply chain is implemented to create a smoother transportation process.
How To Face the Challenge of Adopting a Digital Supply Chain
Understanding Digital Supply Chains
There’s a saying in Silicon Valley: Data is the new oil. Those who control it, own the future. That’s why we have heard about “digital supply chains” for what seems like forever. But that hype and promise ignore two key questions: Are we there yet? And, if not, how do we get there from here?
Identifying Common Challenges in Digital Supply Chain Adoption
There are plenty of good reasons that supply chains don’t get digitized. Some of the top issues we see in our practice include:
- Data integration: Data varies in format and categorization between the partner companies involved. Sometimes it’s not standardized from system to system even within a single enterprise.
- Perceived complexity: As data collection becomes more pervasive, it’s easy to drown in that ocean of information.
- Change management: Former Cisco CEO John Chambers once said, “Change is fun as long as you’re doing it to someone else.” New processes require shifting that mindset so that stakeholders are motivated by potential gains.
- Cost: In our experience, the value of integrating information across suppliers vastly outweighs the cost of doing so. But, IT projects can have a reputation as money holes. So, digitization projects must have clear, realistic outcomes that make sense and add dollars and cents to the bottom line.
- Accuracy: Just because information is correct at the time of collection (a hurdle in itself), doesn’t mean it will still be right or relevant once it’s integrated to other measurements.
- Security, trust and privacy: As the number of information sources and partners in a project rises, so do the opportunities for misuse of that data.
Digital Supply Chain Management
What Is Digital Supply Chain Management?
Regardless of the challenges involved, it’s imperative that manufacturers have a digital supply chain management strategy. There’s too much to be gained from knowing better where goods are and where they’re headed. Improved customer satisfaction, reduced inventory costs and more sustainable operations are among the bottom-line values affected.
It’s also true that market expectations and competition come into play. Those who delay in adopting a digital supply chain will be the long-term losers who lag behind in their industries.
Overcoming Change Management in Digital Supply Chain Adoption
”Reengineering The Corporation” author Dr. Michael Hammer once argued for what he called the “yellow brick road” approach to change management. Most projects, he said, become too ambitious and large in scope. Even if they have good methods and goals, they end up failing before they get to any measurable return.
Instead, design a series of small, achievable steps—like Dorothy walking down the path in The Wizard of Oz. Each step improves a process or a system and generates the gains and momentum needed for the next step. It’s a longer, harder way to get to your organization’s Emerald City, but it has the benefit of actually working.
Ensuring Data Security in Your Digital Supply Chain
The yellow brick road approach also makes data security simpler. Instead of accounting for hundreds or thousands of data types from countless partners, a demonstration project might just seek to, say, harmonize delivery statuses for your top five carriers. With those securely connected, you’re ready to take the next step.
At the same time, it’s important to embrace standards and a best-practices-based approach. Put big thinking into the small steps, make sure you’re accounting for future needs and let the rest take care of itself.
Streamlining Integration Complexities in a Digital Supply Chain
It goes without saying that the approaches that make security more achievable also work for data integration. Instead of forming your data around the limitations of any single system, design or utilize a cloud-based system that can gracefully accept as much of the existing information as possible. Then, add structures for the remaining needs.
Software Solutions for Overcoming Digital Supply Chain Challenges
Selecting the Right Software for Your Needs
We have talked at length about the right process approach for supply chain digitization, but the right software is just as important. Make sure you have your project’s goals in mind before you go shopping: What’s your priority? Is it visibility? Predictive analytics? Benchmarking? Choose a platform with strengths where your greatest needs are.
Building a Resilient Security Infrastructure
Most modern platforms have the capabilities for good security. As with so much in life, though, success lies in the implementation. Make sure your team is fully briefed on the partner base, systems, any systemless data sources such as Internet of Things (IoT) sensor streams and your industry’s requirements for compliance and regulation.
Building a Resilient and Efficient Digital Supply Chain
Clearly, there’s a lot to think about when designing a digital supply chain strategy. When it comes down to it, “how do we get there” is really the wrong question. There’s no “there” at which you can arrive—only a road with unending next steps that build iteratively on each success.
A good, consultative partner can be a key asset as you set out on the next step of your digital journey. At Morgan, we have more than 30 years’ experience understanding complex, multi-party supply chains. We know how to listen to each client’s unique needs, then design and manage the initiatives for successful change. We’re experts in the transportation and logistics industry, but we also talk tech, too, with our own digital supply chain platform, ChronosCloud.
If you’re ready to explore the benefits of digital supply chains, we’d love to talk.
