9 September 2020 // The title of MIT Sloan School of Management researcher Michael Schrage’s story says it as well as we could: “Data, not digitalization, transforms the post-pandemic supply chain.”
Schrage’s argument is a 21st Century version of the old garbage in, garbage out computer science theory. “Too many managers believed that moving legacy processes, data and analytics to the cloud would automatically enhance transparency and visibility,” he writes. When COVID hit, “they got punched in the mouth” and were unable to shift quickly from a “just in time” world to “just in case.”
Before you start wiring up processes it is critical first to identify relationships and key data needs throughout the supplier base. “Supply chains are not designed to be transparent,” Alexis Bateman of MIT tells Schrage. “As you move upstream with suppliers, they don’t want to disclose information they think of as a competitive secret.”
At Morgan, this is why we avoid over-reliance on software-centric terms like “visibility” and “digitalization.” The first requirement for transformational performance and resilience is understanding which suppliers, interdependencies and data elements drive your operations. (There may be groundwork just to identify important second- and third-tier suppliers that are currently not visible to you.) Supply & Demand Chain magazine recently wrote about multi-tier mapping as a key first step to decreasing China dependence. But it’s relevant to any transformational effort.
Once that’s in place and you understand key players, events and processes, it’s time to assess data gaps and data quality. We wrote a three part series on data quality issues and solutions earlier this year. If you didn’t read the series then, you can find the posts here: Part 1. Part 2. Part 3.
Only after all of the steps above have been completed are organizations ready to decide where and how to automate. The good news is, the tools for collecting and connecting supply chains have never been better—from the Intel Internet-connected freight sensors that we use, to electronic logbook-based and GPS tracking, mobile apps and online platforms like our own ChronosCloud.
Even better news: Once you have extended supply chain automation across your operations and those of your suppliers, you have laid a foundation for high performance, whether the goal is just time or just in case.
Need help identifying your supply chain’s critical data points, connecting them across suppliers automating processes and managing by exception? As trusted partners for two of Gartner’s top ten manufacturing supply chains, we’re experts in transformation. Contact us to find out more.
--Michael Schrage, Research Fellow, MIT Sloan School's Initiative On The Digital Economy
While You Were Shipping…
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