This year’s Gartner Supply Chain Executive Conference (GartnerSCC) addressed digital disruption in many forms. The imperative was this: create a customer-centric supply chain that emphasizes a digital experience.
In the opening keynote, David Willis, Gartner Chief of Research for Mobility and Digital Workplace, emphasized the role of supply chain leaders in digital transformation, calling them “builders of unique technology capabilities.” Those technology capabilities will drive optimization through a new approach to supply chain. According to Willis, it is supply chain leaders’ responsibility to weed out non-differentiating capabilities and create a foundation for a fully digital supply chain.
What is a fully digital supply chain? It leverages technology to enable your company and trading partners to access information and take action—anywhere in the supply chain. And it blends the physical and the virtual to meet customer expectations in increasingly customer-centric supply chains. As it matures, a supply chain that embraces digital transformation is no longer a chain, but as Chris Tyas, SVP Supply Chain at Nestle called it in his keynote, a “consumer-centric value network.”
To emphasize his point, Tyas also added that “one up, one down” track and trace is no longer sufficient in earning consumer trust. Instead, he encouraged supply chain leaders to expand traceability from track and trace to trust. According to DSI’s VP of Digital Supply Chain Platform, Andy Brisley, “Without utilizing the tools of the digital supply chain, we will not be able to achieve that level of trust with our consumers.”
One example of a business embracing digital to stay competitive is Williams-Sonoma. Realizing today’s consumers favor digital shopping experiences, the company reinvented the way its customers interact with its brand, include how they buy and receive products. As a result, nearly half of Williams-Sonoma’s revenue now comes from digital. As the retailer discovered, Willis said, “Digital doesn’t compete with analog. The experience comes together for the customer.”
But how does one achieve a digital supply chain? That’s where bimodal comes in. This year’s conference theme, “The Bimodal Supply Chain: Tackling Today, Preparing for Tomorrow,” was all about taking a bimodal approach to creating a stable, yet agile supply chain that supports end-to-end visibility and collaboration with speed and scale.
Gartner’s bimodal supply chain model suggests that businesses need to be both industrialized (Mode 1) and innovative (Mode 2) to succeed. The first mode takes a structured approach to solving problems using standard tools. Mode 2, conversely, is about experimenting—and sometimes failing—in an effort to make transformational changes. In other words, rapidly iterating and evolving.
The key is to develop transformational ideas in Mode 2 and then implement them widely within a structured Mode 1 framework. As Mike Dominy, Research VP, Gartner, said in his session on bimodal supply chain strategies, “Demand-driven value chains need to innovate and operate… transform and continuously improve. It’s not either/or.”
DSI’s Andy Brisley adds this reminder: “Keep in mind that as business leaders in IT or Supply Chain disciplines, our goal is to drive top and bottom line growth. Adopting a bimodal strategy is the method, not the end goal. However, it’s the method that enables digital supply chain transformation, which in turn allows for continuous improvement that will impact top and bottom line growth.”
Which transformational technologies should you consider for your supply chain? We’ve identified the following three tech trends at #GartnerSCC this year.
The Internet of Things continues to emerge as a powerful force in supply chain. A growing network of connected sensors and devices is already generating vast amounts of data. The challenge: leveraging that data to improve supply chain operations. Supply chain leaders at the forefront of IoT will use that data to create new products and services for their customers. Consider the example of a tire manufacturer. Embedded sensors in the tires allow the company to provide a new service to their customers: real-time updates about preventative maintenance.
In the digital economy, “things” are even becoming entities unto themselves. With advances in artificial intelligence and neural networks, smart machines are closer to becoming “cognitive machines.” That is, capable of making their own decisions. Dwight Klappich, Research VP at Gartner, described it as a paradigm shift. In the era of the smart machine, we are moving from machines helping people to people helping machines.
In his opening keynote, Willis said, “Return on data is delivered by algorithmic analysis.” To get the most out of data generated in the IoT, analytics are crucial. According to Michael Burkett, VP and Distinguished Analyst, Gartner, algorithmic business is the next evolution in emerging supply chain technologies. Algorithmic business takes data from multiple streams, applies algorithms and creates actionable information. It uses analytics with IoT and smart machines to take them to a truly autonomous level.
The supply chain use cases for analytics are immense. As one example, retail analytics have the potential to give enormous, global companies to deliver a “local” customer experience. By monitoring Google searches for products by region, a food and beverage company could change the in-store experience for their customers in that area. Analytics allows companies to take real-time data, discern customer demand and make adjustments.
In his session, “Supply Chain 2025: Planning the Future Supply Chain,” Burkett predicted that the concept of owning assets will change. In what he terms the “economics of connections,” businesses must consider the economic value of the digital business ecosystem. For example, companies like Airbnb and Uber have transformed their industries doing just that. These companies use an “aggregated virtual asset model” that taps into a peer-to-peer network in lieu of building out infrastructure and accumulating assets. The result: explosive growth.
And travel and leisure isn’t the only industry where this trend is taking off. In logistics, companies like Lyft and Uber are moving into last-mile delivery. Companies like Flexe will transform warehousing with on-demand pallet storage. Across industries, digital business ecosystems will equip businesses with the agility and flexibility to meet customer demand—even as those demands continue to rise.
Are these transformational technologies on your supply chain roadmap? Don’t become overwhelmed and feel you are too far behind to make an impact. As DSI’s VP of Digital Supply Chain Platform, Andy Brisley says, “A great place to start is to find a business process with a clipboard and begin by using data collection processes to digitize the data.”
Start small and grow your digitalization effort at a pace that’s right for your business. DSI’s Digital Supply Chain Platform (DSCP)™ provides the analytics, IoT/M2M and mobility capabilities to equip your supply chain for digital business. Enhance and extend your enterprise software systems with rock-solid integrations for Mode 1 stability while iterating at Mode 2 speed using the DSCP rapid development environment. Wherever your business is in its digital journey, the DSCP can help you better serve customers by capturing and analyzing real-time, omni-channel data at every node.
Were you at #GartnerSCC? Tweet us at @DSIMobile with your highlights from the event.