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December 04, 2018
Disrupt yourself: Where the supply chain of the future begins
By: Tushar Narsana

50 million users is a magic threshold for adoption. It took the telephone 75 years. Television reached this mark in 13 years. Twitter took nine months. And Pokémon Go did it in just 35 days.

This story was perfect to start my talk at the Infor Executive Forum, a C-suite gathering in September that addressed digital transformation themes. Between the buzz in the room and the presentation agenda, one thing was clear to me. Digital disruption is here to stay. The leaders I spoke with were not just interested in talk. They were interested in action—in concrete approaches for addressing disruption. Accenture Operations works with our clients every day to bring this to life.

It’s no wonder that the Executive Forum attendees were so eager for fresh ideas for tackling disruption. After all, disruption is more than radical change. It is rapid change.

As I discussed at the event this is especially true for the supply chain. Customers and marketplaces are evolving fast, and supply chains should too. Tomorrow’s supply chain is expected to/should be highly-interconnected and asset lite, anticipating shifts in demand with an intelligent digital backbone.

Disrupt or be disrupted? That’s the question on the minds of supply chain decision makers. Here’s why.

 
 

Disrupt or be disrupted

With disruption coming at them from all sides, supply chain executives can lose sight of the fact that the supply chain of the future starts from within—with self-disruption. This involves a pivot away from the status quo in how organizations manage and structure the supply chain.


A circular chart which illustrates ten ways to improve supply chain management. The ten steps illustrated are: 1) Harmonize the Operating Model 2) Segment the Supply Chain 3) From linear to integrated 4) Be your own Shark Tank 5) Discover new business models 6) Make cost take out part of DNA 7) Adopt a fluid workforce 8) Embrace the power of Eches 9) Build visibility and transparency 10) Win with the digital supply chain.

Our work with supply chain organizations reveals that there are many ways to do this. Three in particular have universal relevance and also got the most attention from Forum attendees:

  1. Segmentation on steroids. It’s key to segment the supply chain granularly to address the explosion of segments across channels, customers, SKUs, geographies, brands and categories. Organizations should prepare for a segment-of-one demand model. It’s coming fast.
  2. Linear gets left behind. Supply chains should move from linear to integrated. The operational blind spots and bottlenecks from siloed processes across planning and execution make fast reaction time, full operational visibility and forward-looking trend spotting impossible.
  3. Strong cost take out DNA. Investing in the future requires a commitment to cost take out. This is not new in logistics and operations. What is new is going beyond slash-and-burn cost reduction and assessing costs holistically to identify savings and redirect them to innovation.

The elements of change

Disrupting your supply chain happens with Operations, and it takes critical capabilities. Data is the most fundamental. With reliable data, supply chain organizations can use digital enablers—from analytics and robotic process automation to artificial intelligence and blockchain—to drive change.

However, let’s remember something I pointed out at the Forum that resonated with the audience. As critical as digital technology is to building the supply chain of the future, it is not the be-all and end-all of transformation. Think of it this way. Amazon.com, Inc.is not mastering same-day delivery solely because it has extraordinary digital technology. The culture is key to its performance/development too.

Still the heart of the matter

Finally, let’s not forget the customer. Every high-performing company knows that the customer is king. In fact, Accenture research reveals that more than 70 percent of chief supply officers believe that by 2020, the supply chain will be a key driver of better customer service for their organizations. I certainly agree. The irony is that as disruptive as digital is to supply chains, it introduces many new ways for companies to double down on a strong customer focus.

Infor and Accenture are building more intelligent supply chains, working with clients to turn data into decisions.

Moving forward, we expect to see digital become the engine for highly-collaborative supply chains that provide hyper-personalized service at the individual customer level—at speed. So my question is this: Are you ready to jumpstart tomorrow by disrupting your supply chain today?

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