Digitization — digitalization — digital transformation. These words have been buzzing around the supply chain world in recent years and have received significant attention the past few months due to COVID-19 disruptions. The current theme in supply chain: adopt digital supply chain tools or be prepared to struggle, if not fail, in the post COVID-19 business world. While I absolutely agree with this statement, the current messaging is a bit misleading, implying, for example, that simply replacing Excel with a cloud-based planning tool will make your supply chain more resilient and, thus, your organization more competitive. However, a truly successful digital business transformation requires several considerations aside from deciding which tools will bring the most value to an organization. Based on my experience implementing cloud-based supply chain planning tools, I’ve categorized and detailed those considerations here. If your company is “good to go” in all three of these areas, then you are ready to get started with technology implementations. If, on the other hand, one of the categories needs some attention, it is highly recommended to give it the attention it needs before spending on implementation fees and user licenses.
Consistently clean data is needed to create and refine forecasts, accurately calculate key performance indicators, manage supplier relationships, identify areas for continuous improvement efforts, determine replenishment logic, optimize transportation lanes, increase end-to-end supply chain visibility, and the list goes on. Without the right data in a format that can be consumed by a digital tool, the tool is obsolete. You can quickly become overwhelmed when you consider the many data points needed to drive the supply chain and the effort it would take to clean and prepare data, but not preparing your data before you begin implementing technology only causes more headache and money wasted in the end. If you do not have the resources in-house that can dedicate time to data cleansing, consider outsourcing to a pro.
We have all heard lessons learned anecdotes of tools that were implemented, but never used. And yet, companies continue to minimize the criticality of thorough training and robust change management. Ensuring users are ready to adopt a new tool is more than making sure they know how to physically use the system. There is an emotional, mental, and dare I say it, spiritual readiness required to effectively navigate change that affects us personally, and this should not be overlooked during the transformation journey. Again, if you don’t have an in-house training and change management leader, lean on the experts and outsource.
Many supply chain tools are highly customizable and very flexible, which is good and bad. Different industries have different technological requirements and I have seen my fair share of variations in planning processes, so having the flexibility to customize tools is beneficial. However, this ability to customize means it is very easy to implement a tool that supports a process that is far from ideal. Taking the time to get all the stakeholders in a room to create, refine and align processes is a must-do before you start the heavy lifting.
Data, people and process are the legs of the three-legged business transformation stool and are all equally important. When we hear consultants and industry leaders talk about digital supply chain tools, it is easy to get excited about the value technology can bring to the supply chain. However, now, more than ever, is the time to remember that technology itself will not perform miracles and a simultaneous investment in people and data improvements is where ROI is realized.
Dyci Manns Sfregola holds a Masters in Engineering Management from Kennesaw State University’s Southern Polytechnic College of Engineering. She spent the early part of her career in digital and experiential marketing before transitioning to supply chain. She is currently a consultant focused on Connected Planning process improvement and leveraging cloud-based technology to achieve supply chain excellence.