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Supply Chain 4.0 – Will the Supply Chain Leader soon be an extinct breed?

Erik Tieleman Published at

A key concept that many (retail) companies are embracing and implementing is the “control tower”. A control tower is a sort of a decision-making centre that receives and provides real-time end-to-end visibility into global supply chains. A kind of a command centre staffed with smart data analysts who monitor screens and induce “remedial actions” for managing the entire supply chain, from Supply and Production to third parties and Delivery to customers. Managing the volatility in demand and the variability in daily execution has become more centralised, data-based and technology supported.

On the face of it, this type of centralisation would appear to be a good idea. After all, the more you consolidate, the better you can steer, and the more efficient you will be, right?

At R&G Global Consultants, however, we think the use of control towers as a solution for managing customer satisfaction, timely deliveries and supply chain cost productivity is over-weighted. In our opinion, more emphasis should be given to facilitating better reliability at the point of execution, rather than using control towers to manage deviations after the fact. Eliminating undesired variations as they happen is a lot more efficient than wasting time and money while waiting to identify, analyse and remedy them. In our view, control towers are being used as a substitute for creation of reliable supply chains in the first place. Which raises an interesting question: if Supply Chain reliability were to become perfect, would you still need Supply Chain Leaders?

So, I guess it is the job of Supply Chain Leaders to continuously steer towards Execution Reliability across the end-to-end Supply Chain and, in doing so, manage themselves towards extinction.

How can you take your procurement, production and distribution peers and leaders with you on this journey??? The key lies in better Supply Chain Data-Driven Leadership. It is essential that leaders upgrade the ability to use data for learning what needs to be changed, use it as a change-enabler in the typical cross-functional-silo-ed, matrix organisations, and lead these dispersed organisations in redesigning and optimising supply chains.

Essentials for improving Data-Driven Leadership

  1. Get your hands on the right data
    Manage the change issue of it being “impossible to get it out of our ERP”. Take accountability for making sure the right questions are asked. The data you need is almost certainly there, just waiting to be found.
  2. Drive meaningful KPIs and analysis
    Stop looking at meaningless “averaged performance indicators” (e.g. % on-time per week), and tell your organisation to stop creating them. Start using data to learn about performance (transactions, order lines, shipments, supply orders) at granular level. Upgrade your teams’ abilities to “engineer” analysis so it reveals exactly where there’s a lack of reliability and where the potential and key levers for improvement lie.
  3. Create shared insights
    Don’t leave the generation of valuable insights to BI specialists, or delegate analyses. The biggest contribution a Supply Chain Leader can make is to steer towards one view on reality, a shared insight across the functional silos. A shared insight on where to focus, what to solve, and how to go about it.
  4. Create focus through data
    Yes, a control tower could be used to highlight deviations and increase efficiencies, as substitute for effective decision making. But Supply Chain Leadership has an important role to play in focussing teams and resources on the right topics, and for organising an operational system of continuous learning and improvement, rather than just being reactive. Use your data as a universal referee to guide your team’s focus and learning.
  5. Manage Execution
    Even with control towers and other enabling technologies deployed, remedying problems after they’ve been allowed to occur means a loss of speed and quality. Things don’t run as designed, people deviate from working standards or specs, leadership accepts deviation from operating rules that are critical to performance. It is up to Supply Chain Leaders to build, engineer, visualise and review data in such a way that reliability in manufacturing and supply chain execution actually improves. Predictability is a result of our own way of working!

Winning in a data-driven world

The Supply Chain future is already upon us with new technologies and endless possibilities. Sensors, more automated processes, advanced (self-service) analytics, robotics, AI and machine learning is replacing the tasks of Supply Chain Workers. Supply Chain Leaders will have to become Data Leaders.

The winners will be the managers and companies who work diligently and relentlessly on updating their Data-Driven Leadership skills to drive agility, reliability and speed into their supply chain. The winners will be those who are most proficient in connecting process to data to people accountability, and who steer and connect their senior management and teams through data.

Well-developed and utilised, Data-Driven Leadership creates laser-sharp focus on the issues which need to be solved, drives initiative overload out of your supply chain, and delivers the desired business impact. Isn’t that a lot better than watching events unfold from your control tower, counting the revenue that’s already been lost?

 

About R&G

At R&G Global Consultants we support business leaders and their organisations to realise their strategic ambitions with sustainable business results. We are business data pioneers and a digitisation partner. We are data-driven, hands-on, practical, operational and we transfer capability. We create innovative approaches to data-driven strategy execution with big data through structure, tools, operating systems and behaviour change management capability. We connect your people with your data.

Erik Tieleman is Managing Partner Central Europe at R&G Global Consultants

Digital transformation

 

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