If you’ve participated in any supply chain online forums or events recently, I’ll wager that the word “agility” came up again and again. Operational agility in supply chains is a hot topic because COVID-19 turned up the heat for supply chains around the globe. From having to use the backup to your backup distribution partner, to retooling manufacturing lines overnight to produce an entirely different product, supply chain executives have been tested as never before. The strongest swimmers in these churning waters are those who have invested in the new technologies that create supply chain agility.
I’m in the business of counseling Chief Supply Chain Officers (CSCOs) on operational agility. That means, at its most basic, I help them assess and address how well their organization is utilizing its assets and capital to create customer-valued outcomes. They want supply chain agility that allows them to pivot on the spot, if necessary. And during COVID-19, it’s been more necessary than usual.
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Agility can get supply chain operations to the kind of financial results that CEOs love. Over the past year, Accenture has teamed with clients for outcomes like what you see below. But without a doubt, it’s new technologies like Artificial Intelligence (AI) and advanced analytics that make results like these possible.
When I work with clients, we talk about achieving agility via three main steps:
#1 Transparency—Your window into wins and trouble spots
We use technology to help supply chain executives avoid the myopia that tends to occur over time in their operations. They’re expected to product tangible products, services and outcomes—and they do this consistently. But most don’t have clear visibility into how truly efficient and effective their operations are over time. This is completely understandable because that equation is never stable. Pandemics, natural disasters, transportation strikes and more will occur. Markets will change. So will products.
Given the constant state of flux, CSCOs that use technology to create transparency in their supply chain are in a much better competitive position than those who don’t. A digital twin, for instance, can help them understand their operations, supply chain capabilities and customer transactions in a way they’ve never before seen them. A digital twin is basically a virtual replica of a real-world system—in this case, a supply chain. With the knowledge they glean from it, they gain new insights to make even better decisions about how to run their supply chain for maximum growth and efficiency.
During the COVID-19 crisis, we helped a healthcare products company create a digital twin of its ecosystem landscape. Their goal was to dynamically anticipate the best action based on different possible scenarios. For instance, if they lost an entire node of their supply chain, what’s the best contingency plan? What would happen if they couldn’t get key components from certain geographies? How would they adjust sourcing?
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#2 Analytics—Experiment with less risk
If transparency shows CSCOs their current supply chain state, analytics will reveal the implications of that state. Using AI and advanced analytics, we can help CSCOs better forecast where they might have a constraint with a new line of products. Through predictive modeling, we can help them see if order management or prototypes might be the snafu. They can solve problems they know will happen before they happen.
#3 Design for value—Work smarter
Using transparency and analytics insights, we help supply chain executives design for the highest value. We look at their systems, people, processes, markets, channels, product portfolio and more. For instance, we recently worked with a client on an SAP S4 HANA journey. Our analysis showed that 80% of their processes lacked the standardization that helps a company scale well. We could have helped them customize HANA to maintain that complexity, but we didn’t. It would have added to their costs and lead time. Instead, we helped them build commonality in—using data insights on what work was done and how—to improve their agility by simplifying where they could. We helped them reduce the cost of their systems customization by over 60%.
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Large enterprises are prone to complexity. But complexity and agility aren't compatible. Using advanced technologies to help reinvent operations helps you remove that complexity.
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Growth and hyper-personalization, fueled by agility
If you could infuse this type of agility and insight into your supply chain operations, imagine how much easier it would become to also infuse the voice of the customer into them. With today’s need for customer micro-segmentation and hyper-personalization in the supply chain, customer expectations are driving agility to a new level.
When you can predict risk or problems more accurately, experiment without real-world delays, and design to maximize value—your customer experience improves as a matter of course. And our latest research report shows supply chains that are customer-centric produce more growth.
Large enterprises are prone to complexity. But complexity and agility aren’t compatible. Taking an objective look at where you can remove that complexity—using advanced technologies to help reinvent operations—helps your supply chain positively impact key customer outcomes (not to mention on company growth).
Getting to agility is so much easier today, thanks to a bevy of digital technologies. Are you making the most of them in your supply chain?