Sustainable Supply Network

I believe ‘supply chain’ is no longer an appropriate description because the combination of market demands and disruptions have fundamentally changed the supply requirements and now demands networked capabilities to meet the normal course of business. The pandemic has highlighted this new reality in a dramatic way through the waves of disruption that have been crashing on the supply chain. These disruptions have been systematically breaking the links in the supply chain and as a result demonstrated the importance of a ‘Supply Network’ in order to sustain the supply. It is too easy to call out the initial disruption of the pandemic as a black swan, a once in a lifetime, event and we would be foolish to think this will be resolved into a ‘new normal’. The new normal will more likely than not be made up of waves of disruption that demand a new sustainable supply network to provide the framework and foundation required to support the market going forward.

The disruptions we experience regularly and with increasing frequency have highlighted the need for a resilient and sustainable supply network that can flex and connect based on the current availability and capability in real time. This has quickly become a base requirement that a significant challenge to the technology and the culture of organizations and especially the marketplace. The disruption and the resulting changed demands on the supply network require agility and resilience to respond along with the tools and methods to swiftly sense the disruption and then just as swiftly determine the appropriate reaction, or series of potential reactions, to the disruption so the network can swiftly and efficiently execute the most appropriate reaction(s). There is no longer an option to perform deep analysis and study the disruption, the market now demands immediate reaction in order to implement a repair to the network from the disruption.

This is where it gets difficult, how does your network first sense the issue and then quickly and efficiently react? The simple answer is that without a real time networked solution that incorporates artificial intelligence tools to sense the issue and then machine learning to analyze the options there is really no way for a human to react is the necessary timeframe. The key to success in this global market is a resilient and sustainable supply network that can work collaboratively across nodes and partner to react and repair the issues. The challenge is overcoming the limitations of the legacy batch processes and practices.

This is something that requires a concerted and coordinated action plan across the global supply network in order to support the market demands. The answer is definitely not bringing manufacturing back to the local market because the global supply cannot support the demand effectively or efficiently. Unfortunately, there are really no ‘easy’ answers to the challenge and on top of this, the response requires a continuous analysis is real time in order to sense and respond in a manner that addresses the issue or the disruption. Disruption in the global market is never the same reason and always requires a combination of multiple responses from multiple supply partners. This is difficult and requires a network response in real time to support the market.

Our goal should not and cannot be to build a new normal, our goal instead must be building a resilient and sustainable network of partners that collaborates to support the changing demands. This is a difficult goal that will not get easier with time. Our current supply chain tools are not architected to support a network and this must be the first step in the journey. This will be a complicated challenge that requires a significant level of collaboration to achieve. Delay will only make the transition more difficult though.

Conversational Commerce

Conversational Commerce

The retail omni market, along with the entire retail supply chain collaborative network, is being driven by consumer demand towards a significant disruption that will transform the legacy consumer focus into a social commerce, or conversational commerce, marketplace. I think the conversational commerce name is highly descriptive of the transformation and provides a highly descriptive name to the next transformation wave. The next transformation wave will be focused on the two-way interaction between customer and retailer or customer and service provided or retailer and service provider, I’m sure you get the drift, creating an eComerce network market. The next transformation will eliminate the hierarchy across the retail marketplace and replace the hierarchy with a network of direct connections to the appropriate partner at the appropriate time in the retail transaction. The benefits of this model are dramatic for all parties involved and provide the framework for interaction through the next transformation wave.

Conversational commerce is the next logical step in the transformation of the social commerce marketplace network and provides a great way to frame the transformation. The focus of conversational commerce is a network of two-way interaction between consumers and partners to support shopping and purchasing in the omni market. This is a further clarification and more importantly an enhancement to shopping and purchasing in the marketplace. This creates a virtual shopping capability that incorporates virtually the interaction that normally occurs in the physical retail shopping trip. It provides the ability to interact across all of the parties involved in the shopping experience to provide the value-added services and products during the shopping experience that would be difficult in the current standard eCommerce or omni market shopping experience. The two-way interaction is a very powerful tool that will improve the shopping experience and increase the opportunities for additional sales and add-on services.

The transformation definitely requires a means to coordinate and direct the communications across the involved parties and this is where the control tower concept and technology comes into play. A control tower framework is required to provide a plug-and-play framework for communication and collaboration with external partners and even consumers that allows the partners to focus on the business benefits rather than the communication requirements. The control tower framework must be embraced and implemented across all of the partners to maintain the communication and realize the benefits. This framework provides the basis for integration from a message perspective to allow the partner to communicate with a partner in the most efficient manner for the partner while maintaining a clean and stable interface with their own internal systems. The framework provides an externally facing tool that is flexible and robust to simplify the addition and integration with other partners, it does not eliminate the work to external partners, it eliminates the work on the internal integration though to the business applications.

Conversational commerce focuses on the two-way communication between partners, including manufacturers, transport, service providers and consumers. This model will transform the omni channel retail marketplace again based on the consumer lifestyles and the consumer embrace of technology to support the social network. Conversational commerce is another term for what I have been calling social commerce which is the two-way direct communications with all players or partners involved in the retail marketplace. Consumers view retail shopping as a social experience which is why malls were so successful and now the consumers are using conversational commerce to create a virtual mall.

Next Wave For Retail

The next wave for the retail marketplace is the convergence of the internal business networks that include the supply chain partners and the external social network that includes consumers and the variety of social network sites and connections. The consumer is driving this convergence through their use of network services and connectivity as they are building their own network of connections for services and goods along with their connections. The objective for this consumer network services convergence is to connect in their own personal network both retailers and their extended supply chain partners such as transportations services and manufacturers to build a cohesive and service based network to support their own needs. This extended consumer network of services and computing capabilities, especially mobile capabilities, have given the consumer the tools to build their own social commerce network. Many service providers have recognized this and have developed new services that allow the consumer to create their own personalized shopping and purchasing capabilities. Considering the growth and value to the consumer of these social commerce network services I really do not see this trend slowing are expect quite the opposite.

There are two things bringing this together;
- The first is the computing and network capabilities,
- The second is new service providers taking advantage of these changes.

A big part of this next wave is how retailers and service providers utilize localized and personalized services in their practices. These services will provide the secret sauce that will fuel the next wave of retail. This has been growing for a while now through experimentation from both consumer experimentation and service providers. You can also see that some retailers have embraced the wave and are working towards developing the market in this direction.

I see the key aspect to the next wave as the localization of services and especially as it relates to interactions with consumers which in turn will drive the personalization that can grow as a result of the localization. Consumers have been using social networks and technologies for a while now to develop their own virtual shopping practices and even virtual shopping malls of their favorite retailers. They are using the services that are available from mobile app developers and now Google has jumped into the localization with both feet to provide consumer capabilities to search and shop based on their current location and even their destination location.

The Google developments and offerings they are providing through Maps alone will drive the localization of eCommerce to new levels. Retailers, restaurants and entertainment are offered and consumers are providing the personalized evaluations, ratings and recommendations on goods and services. Consumers are already tapping into these services in their shopping and travel decisions and retailers must recognize this and then take actions to incorporate the capabilities into their plans, services and offerings. Google is commercializing these services to expand their apps and services further into the lives of consumers and retailers and other service providers have a great reason to embrace these capabilities in their offerings to support their own sales and services.

Fortunately for retailers and service providers Google, for one, is providing the framework for localization that can be utilized by retailers and they are happy to provide this framework for others because it extends the Google brand and the data Google is able to obtain from this framework. This is an important benefit that should also push retailers into this next wave; the amount of customer data available as a result of this localization and personalization can be immensely valuable to retailers.

What are your observations and experience in this social commerce network? Are you seeing any impact or changes to consumer demands that can be related to these changes?

Tom Brouillette

Contact: Tom.brouillette@gmail.com

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Supply Chain Network Resilience

 

Supply Chain Network Resilience

 

Supply chain network digitization has become a  key factor in supply chain resilience with the need driven in large part by VUCA resulting in waves of disruption across markets.   The number of companies seeking approaches to measure and benchmark their digital infrastructure and processes is growing as a result. In order to achieve the improvements necessary to support the demand it is important to incorporate tools that can assess, and perhaps most importantly, monitor the benefits and challenges resulting from the digitization process itself.  This is another variation on a continuous improvement program and requires the same methods and practices to achieve the digitization objectives and benefits.  It is important to review and validate modifications because of the relationships between multiple digitization initiatives and their combined benefits and challenges.  

Kearney’s Resilience Stress Test “Strategic Options To Build Resilience”, assesses supply chain resilience outside of the common disaster scenario capability and capacity planning to be able to rapidly flex, or repurpose, assets, across your extended supply chain network to be able to respond to unanticipated supply shocks, such as trade wars, major weather events, or permanent shifts in demand.  The dimensions of this stress test framework include: geography; planning; suppliers; inbound transportation; manufacturing; outbound distribution; product portfolio and platform; and financial/working capital.

In order to be successful the framework monitoring must be spread widely across all supply network points, and processes, as well as those of suppliers and partners, initially starting with critical processes and partners, with a focus on measuring the degree of digitalization and capabilities in each of these factors. These digitization capabilities and processes include using IoT sensors in logistics or fulfilment operations, robotic process automation in production or distribution, and analytics and machine learning in production centers, inventory management, and financial capital management.  As a starting point, the initial evaluation provides the baseline that should be used to monitor and measure progress and must be developed to support monitoring across your extended supply network.

This is where automated control tower software can and should be utilized to support a process that will continuously monitor the network.  Ideally, this control tower solution would be capable of alerts and even prescribe how to resolve issues as well as actually resolving issues automatically as they occur.  The challenge in the extended supply chain network is caused by the velocity of disruption experienced across your network.  These disruptions can occur with such speed and spread across your network partners that it becomes impossible to perform the necessary analysis and adjustments to react and address the disruption in a timely manner.  It is not enough to identify after the fact because of the potential damage to your business.  The velocity of the disruption and the potential impact requires immediate response and this can be achieved by a robust software solution that spans the supply chain network.

Tom Brouillette

Contact: tom.brouillette@gmail.com

Thank you for reading my post on Linkedin in addition,  Here at my blog I regularly write about management and -technology trends.  To read my future posts on LinkedIn click 'Follow'

Tom Brouillette discusses supply chain trends and provides strategic business & technology advice to his followers and companies.

Partner To Develop Digital Enablement Strategy

 

 

The COVID-19 pandemic disruption created an urgency in reacting and redefining the global supply chain in reaction to the consumer market upheaval. The initial pandemic disruption set off waves of related disruptions in such a short period of time that companies and organizations are overwhelmed because they cannot wait until the dust settles to address the next event. We have truly entered into a time of severe VUCA (Volatility, Uncertainty, Complexity and Ambiguity) across the marketplace and the supply chain is in the eye of this storm providing the key capabilities to respond. Now, perhaps more than ever, the response depends on partnerships across the extended supply chain to effectively sense and respond to the disruptions.

We must now assume that the cycles of disruption have reached a point where this time of severe VUCA will be the norm for the foreseeable future. As such, we must develop a strategy and the capabilities that help partner organizations in the extended supply chain to sense the disruption early and respond to the disruption quickly and effectively in a manner that can be leveraged for the response to the next wave of disruption. These demands require expertise in the broad market along with deep specific expertise of partners to first navigate the events and then develop a strategy to utilize the network capabilities to respond. Quick response requirements do not allow for delay hoping the disruption will disappear. We should have learned by now that it requires a response that is based on a market impact and expertise in quick identification of an appropriate response.

This is where technology and specifically a robust digital enablement / transformation strategy comes into play. The velocity of the market coupled with disrupting forces make it almost impossible for humans to sense the disruption in time to respond and limit the impact and prepare for the potential next disruption. Technology that senses the changes in the market and then identifies potential results and impact is critical to the success of a business. Considering the extended supply chain as an example, there is just too many moving parts and participants in the equation for any one partner to hope to identify and implement a response. Success requires developing a partner network to be able to respond to the waves of disruption effectively. Further success requires developing a market partner strategy that informs and enables each individual partner strategy.

This new model requires a strategy that is at once flexible and also embraces extended partnerships to enable the response to disruption in a way that supports the business strategy. Organizations must partner with an expert(s) to help develop this strategy in order to meet the time constraints. You cannot wait for the current VUCA environment to settle and return to business as usual. We need to accept the fact now that business as usual is a VUCA state that requires organizations and partners to ‘walk and chew gum at the same time’. This requires the input and direction from an expert with the vision and the experience and perhaps most importantly the network of partners and contacts that can help in developing this strategy.



Tom Brouillette

Contact: tbrouillette@ncspartners.com

@ncspartners


Thank you for reading my post on Linkedin in addition, Here at my blog I regularly write about management and technology trends. To read my future posts on LinkedIn click 'Follow'


Tom Brouillette discusses supply chain trends and provides strategic business & technology advice to his followers and companies.

Discontinuous Demands Of The Market

Consumers are driving waves of discontinuous demands that are disrupting the market and all of the partners in the market. The cycles and the velocity of changing demands has increased as a result of the consumer embrace of technologies that allow the consumer to shape their demands based on their changing lifestyle requirements. Just as the market reacts to a set of demands it seems that the consumers shift and change the demands again. This cycle is complicated by the combinations of generational, technology and lifestyle priorities. The market must implement the process and tools to sense and respond to the demands in a manner that allows them to maintain the pace of the discontinuous demands.

Millennials and Gen X’ers are entering and as a result of their entrance are impacting the market in a big way as a result of their comfort with technology and their imagination in supporting and even creating their lifestyle demands. These millennial and Gen X’er generations are the ‘tip of the spear’ in utilizing technology to create new ways to meet their demands. They are also a significant reason for the decline of department stores, large retailers and brick and mortar stores that is especially demonstrated in reductions in mall and store traffic.

The largest impact though is from the baby boomers embrace of technology and capabilities. This generation is a quick learner and perhaps most importantly from a market impact perspective they are also quick to embrace new trends and capabilities. Technology provides the opportunity to explore and rebuild a market and a very large number of baby boomers are searching for ways to support their lifestyle demands. In addition, baby boomers are not afraid of technology and as a result are quick adaptors to new technologies and capabilities that can address their demands.

Technology is the great equalizer in the market from both the consumer and the partners supplying the consumer. The combination of generations and their propensity to new demands and quick adaptation of new capabilities has dramatically shortened the change cycles. This, in turn, has left the market struggling to maintain and react. This cycle and resulting impact is quickening and bringing with it a faster disruption to the market that must be addressed in order to survive.

The change cycle has reached the point now where there is really no time for the market to adjust and extend the new capabilities across partners. The cycle has reached the point where the market must react quickly or fall behind. Falling behind can be the beginning of the end though because of the difficulty in catching up with the market.

This is where the importance of the collaborative social network practices come into play for the market to allow the partners to collaborate in reaction to meet the market demands. In other words, a strong collaborative network allows the partners to react and adjust to changing demands more efficiently and quickly. This is where the social networking technologies and practices make a big impact on the market reaction.

Social network technologies combined with big data and artificial intelligence analytics provide the capabilities to sense change in market demands more efficiently and earlier to allow for reaction time by the partners. Collaborative practices and tools allow partners to react in a manner that does not require each partner to develop a reaction to the demand. Instead the collaborative practices allow partners to take advantage of the specialties of each partner in reaction to the changing demands. The strength of the collaborative network allows market reaction to demands at the speed of the changing demands.

The greatest difficulty though is overcoming cultural practices that historically have viewed the changes in meeting demands as a trade secret to create a competitive demand. The culture needs to change to increase sharing and collaboration to sense and react to the changing demands. The competitive advantage is in the sharing and collaboration to allow the partner to more quickly react to the demands.

The measures especially utilizing collaborative practices to respond to the changing market demands are not overwhelming. These collaborative practices have been utilized for years in the extended supply chain as a means to react and respond to changing demands. The difficult actions from the market reaction perspective have been related to cultural practices both in the market and in the responses to the market demands. This has shown that overcoming cultural challenges in market leadership will be the number one challenge and delays or continuing in the same cultural practices will only cause the continual decline for these current leaders in the market.

Artificial Intelligence - The Common Strategic Thread

All networks, social, business, integration and collaboration, news and extended supply chain networks are all related through a common thread, data and more specifically - how is the data used to drive decisions and execution strategies? The glue then that combines the data in a manner that can be used to sense and respond to the waves of disruption in the market.

I believe that the constant running through all aspects of the market place is the discontinuous disruption that is driven by consumer embrace of technology combined with the market reactions to the consumer demands. Marketplace partners must recognize this new reality and work to incorporate methods to obtain the data necessary to feed the decision making process. The value and the accuracy is based upon the amount and types of data that are incorporated and available to the process. This precept itself drives the need and the value of collaborative analysis and data collection across the partners.

This model is especially important to the retail marketplace where the market is continuously buffeted by changing demands from consumers that are themselves driven by changing technical capabilities. These reactions and impact from technology has been a fact of life for quite some time within the extended supply chain and the pressure of reaction to disruption combined with the demands of cost containment and reductions are driving collaborative partnerships in the extended supply chain. These partnerships along with the resulting data collaboration can be used as a model for the marketplace as a whole. This is a key reason for the importance placed on the supply chain by Amazon and others would benefit greatly by embracing this practice.

In addition to the importance of collaborative data, the marketplace partners must also take into account the level of accuracy changes that occur during the life cycle of the analysis. The accuracy of the decision goes through a measurable life cycle:

• Infancy starts with sensing the potential reactions to the demands. This is an unclear time where many options can be taken in reaction to the data and the analysis. This is the beginning of experimentation to test the options.
• Mid-term or decision childhood where the options are narrowed based on additional data analysis based on the results of experimentation from the infancy stage. This is the refinement of decisions and strategy based on the results of experimentation. This is marked by refinement and addition of experiments to support analysis refinement.
• Maturity or decision adulthood where the strategy is fully formed and executed based on the refinement resulting from the data analysis. This is also where the next disrupting concept begins to form and requires the continued analysis of results from the strategy to form the new concept and strategy.
• End of life of old age where the positive results of the strategy decline and the consumer and market are driving the new disruption. This is end of the strategy value and it is equally important to be able to sense the decline of the strategy as it is to identify the beginnings of a new disrupting factor.

You can see that the process I described above follows the PDCA, continuous improvement process, which is a standard practice of the supply chain. This provides a solid framework to sense and respond to the disrupting factors and has been incorporated across a wide range of marketplace practices. The disrupting factor that drives improvements to this process is the collaborative data collection and analysis that allows the process to sense potential changes earlier and then through AI analysis provides the guidance for experimentation and validation to formulate the change to react to the disruption.

Consumer Change Agents

Consumers control the velocity of change in the marketplace and they are continuously pushing the velocity as a result of change and developments in the wireless and Internet capabilities. Consumers learn quickly to take advantage of the gains in wireless technologies to push the changes in the marketplace to support their lifestyle demands. Now we are on the cusp of another major advance in wireless technology with 5g wireless networking to be delivered in the next year. This new wireless network technology brings the potential to dramatically change the networking and capabilities in a dramatic way and the retail marketplace must prepare to embrace these new demands and capabilities. There is simply no time to waist in preparation for this change because the velocity of change will only increase with the extended networking capabilities.




Consumers have used technology to become leading agents of change in the retail marketplace and the coming wireless changes are going to shift this role into high gear for a period of time. Understand that there is always a difference between the hype of new technology and the reality and this new technology will be no different. The change though opens the door for change that will start with a trickle in the market as the technology forward consumers experiment and will quickly increase to a rush when the new capabilities are flexed and niche vendors deliver trial capabilities. Technology forward consumers and niche vendors will very quickly drive the change into the marketplace and this technology, just like the release of the 4g wireless technologies, will have extreme disruptive impact on the marketplace as consumers quickly embrace the capabilities to support their lifestyles.




The consumer acceptance of the new 5g technologies will be must faster than the 4g technology. Of course it will take some time for contributors to roll out enhanced 5g capabilities, however, the consumer is now prepared and anxious for the change. This time around there is a much larger market of technology savvy millennials that will quickly push the capabilities of the technologies and and also the marketplace. The demands and the consumer capabilities will build quickly pushing the marketplace into another round of disruption.




The market must prepare and brace for this new wave of disruption because it will come with a breathtaking speed that can overcome those that are not prepared. This means that partners must increase their collaboration across all channels. This means that partners must improve and increase their interactions and collaboration with consumers. This means that partners must improve their integration flexibility to support new niche partner integrations quickly and efficiently. The change will start slow but it will grow in volume and velocity very quickly and this will require imagination, collaboration and flexibility from all partners in the market to meet the challenge.

Conversational Commerce

Omni channel commerce is growing and morphing now into new capabilities bring into reality a conversational commerce capability that will bringhe the next wave of disruption into the market. Consumers are continuing to drive the change through embrace and experimentation with technology. The tools available to consumers have been growing and expanding in capabilities and the Internet of Things is providing the type of capabilities that produce conversational commerce capabilities that can and will be pervasive across the market. I see these capabilities in the early stages now and experimentation from early adopters from both consumers and retailers are coming togehter with these experiments drive the changes to produce a new conversational market that encourages and allows the smooth blend and transition of shopping and purchasing across all attitudes.





These can be unnerving times for the market partners because of the level and velocity of the disruption. There is an almost overwhelming urge to focus on the change, however it is important during the early stages of this increased disruption on the basics. This is why partners must focus on the foundational framework that will allow them to react and change and experiment with the market to develop and support the new capabilities. Experimentation is the key trait and action required to respond to the change in the market begin driven by consumers and technology. The foundation framework though supports the velocity of change in a manner that is sustainable and robust.





Recently it seems that the focus of partners in the retail market has been operational capabilities such as pick up in the store. This was a requirement to the current stage of the market and I would even call this a type of founcational development because of the way that the operational functions support the retail demands across the shopping methods. The change from conversational commerce adds onto the operational capabilities and the integration capabilities to drive change into the shopping marketplace. This is now the time where data and analytics really shows value in providing a means to sense and respond to the changes. The focus must be the give and take between partners and consumers in a conversational mode that supports reactions to change more efficiently and also provides a means to sense change.





The challenge is that there is no roadmap for the capabilities and the direction that will be demanded for the conversational commerce marketplace and the market partners must focus on the capabilities to sense and respond to the changes. Operational processes focus on efficiencies and capabilities while shopping focuses on communication across platforms, partners and consumers. Shopping capabilities are taking the forefront now because the operational capabilities have already been put into place. There are two requirements to supporting the shopping demands and developing conversational commerce capabilities; interaction between partners and consumers and data analytics to sense and measure the demands and response to the demands.

Velocity of Failure

The twin to the velocity of change is the velocity of failure and these two opposite actions are closely related and end up driving each other in increasing discontinuous cycles. These are increasingly related and a failure to meet the velocity of change will surely increase the velocity of failure but meeting the velocity of change can also increase failure as well. The challenge in meeting these demands is the knowledge of insight and direction of the change. The challenge to obtaining the knowledge is the data collection and analytics required to collect and develop the knowledge from the data. There is really no way around this challenge because the velocity and types of change will surely overrun any retailer that ignores the challenge. What we should have learned from Amazon is that change is iterative and very much a trial and error process and this must be embraced in order to succeed in change.




This is no time to wait for the change to be identified by the industry to react and implement the change. The level and also types of change will interact and react in ways that create all new changes and the only thing that really can be predicted is that the rate of change will only increase, bringing with it an increased velocity of failure. This can be extremely intimidating for large retailers because they are not generally equipped for high velocity change and this is not their general practice. They are just coming out of a long time practice of generally waiting for the change to stabilize before responding. This practice no longer works because of the velocity of change and this is a great example of how the velocity of change increases the velocity of failure.




In order to avoid, or at least respond and change to the changes that will drive failure retailers must not only become more nimble and open to executing change and they must become increase their knowledge of the factors driving change, they must focus on the factors that will allow them to sense and respond to change. The most important aspect is the improved ability to sense the changes and then the analytics to understand how to respond. The sense practice becomes the early warning of direction and types but the most important aspect is the analytics to understand how and when to respond. The velocity of change and most importantly, the velocity and volume of data available in the marketplace has dramatically increased the velocity of failure and as the volume of data increases both the velocity of change and failure increases. Retailers, and truly all partners in the marketplace, must focus on the data and the analytics in order to sense and respond appropriately to the change.




There is an even greater change that is disrupting the marketplace now; the change that is important today can be the failure of tomorrow. This is probably the greatest marketplace disruption factor. Amazon is probably the best example of the velocity of change and change experiments to understand the marketplace. Amazon is continuously implementing change as a means to experiment and better understand the market and also the potential. Google is another example from the technology and retail sector that has focused on experimentation to meet and create the marketplace. These practices should be mimicked by others to ensure their success and most importantly reaction and change to avert failure.

Supply Chain Multi Sourcing

The velocity of change is impacting all aspects of the marketplace from customer relationships to partner relationships to the manufacturing relationships and everything between. Retailers in the fashion industry seem to be the first to recognize and many of them have reacted to the changes to implement the fast fashion market segment. I find this as a great initial example of the results of the velocity of change in the marketplace and believe this will be the model for many of the aspects of the changes. The collaborative supply chain is providing the tools and the network to support the changes and the partners are expanding their experiments into all aspects of the collaborative network to improve their ability to meet the demands. The next step from a sourcing perspective is the expansion of the multi sourcing practice to develop manufacturing partners locally to meet spikes in demand and support end of life cycle demand to reduce overstock.




We have reached the point now in the retail marketplace where the specialty service providers are expanding in the services and even products they offer to support the specialty demands. This includes the local manufacturing of products in the marketplace. These collaborative practices in the extended supply chain along with the growth in capabilities of data analytics provide the tools now for retailers and manufacturers to improve planning and forecasting so demand to a point where the majority of retailers can improve their abilities to support the consumer demands. These capabilities now provide the framework for any retailer to utilize to their advantage.




There is no way to go back and the supply chain partners including manufacturers, transportation and retailers must accept and embrace the change. I see technology manufacturers embracing the global manufacturing and marketplace along with home products. These have all blazed the trail of this model and going forward the collaborative supply chain network will provide the support necessary to link and communicate in this global model. I envision this model to grow and expand as the market demands change and grow to require the global model to meet the demands. The multi sourcing model provides the framework to support the changing demands.




Just as the retail marketplace changed with the growth and expansion of the collaborative and social tools integration with the sales and shopping, these same tools and practices will expand into the sourcing and manufacturing realm to support the consumer demands more efficiently bringing with them a quickening and shortening of the product life cycle. The result of the collaborative supply chain growth and expansion will spread through the forecasting, planning and manufacturing practices in the supply chain. As this multi sourcing model expands the through the collaborative marketplace the results will change the way that consumer demands are met, increasing the flexibility to meet the spikes more efficiently to increase sales and opportunities.

Visibility Across The Supply Chain

The need, and demands, for visibility across the supply chain has always been a key focus in the extended supply chain network and to this end, the extended supply chain network has always been focused on using technology to achieve results.  The extended supply chain recognized early on that technology must be utilized to meet their objectives and moreover, have always been open to the investments in technology to meet these needs. The extended supply chain partners have recognized and achieved dramatic benefits through the use of investments in technology.  The Internet of Things is the most recent wave of technology investments for the extended supply chain partners and these tools combined with the growth and improvements in data collection and data analytics is fueling the next wave of improved and extended visibility across the extended supply chain.

The supply chain extended partners have shown over and over again an ability to incorporate technology and network capabilities to increase the visibility across the supply chain to help improve services and capabilities and each time these efforts have provided a great return on investment.  Now with the increase of collaboration and the even greater extension of the supply chain reach there is even more opportunity to leverage technology through enhanced collaborative practices. The key now to the efforts is the collaborative capabilities through the network. The growth of consumer interaction and demands on the market through their embrace of similar collaborative technologies is now pushing the edges of supply chain visibility even further.

Every partner in the extended supply chain including the end customer of the supply chain is now demanding increased visibility and capabilities to optimize and even adjust within the supply chain.  You see the results of this especially within the retail supply chain where the end consumer is interacting directly with not only the carriers to coordinate the last mile delivery but also interacting directly from the manufacturer to the end retailer in shopping and purchasing.  The enhanced visibility supports the endless aisles concept beautifully and efficiently and these capabilities have moved the baseline even higher.

The visibility drive is enhanced from the improved data analytics and the tools incorporated by the supply chain to track and manage the processes through the supply chain provide a treasure trove of data to be used to increase the visibility and tracking through the supply chain.  The data is the driving factor of the visibility across the supply chain. The technology improvements in networks and wireless capabilities allow the tracking and visibility of each individual delivery and shipment and container from cradle to grave. This capability is truly available now and in some industries has been incorporated and other industries have already started moving in this direction.

Enhanced visibility in the supply chain is a reality and the visibility is driven by the demands of all partners across the extended supply chain that is fueled by improved data analytics and expansion of the Internet of Things technology to capture data from additional outlets.  To put it into a consumer perspective, the days are limited where consumers will sit at home waiting on a morning or afternoon appointment. The number of partners that provide specific time and tracking of deliveries and repair trucks is increasing every day. This is only a surface example of the types of capabilities available and the extended supply chain is continuously pushing the limit to increase efficiencies and eliminate issues.  The increased visibility becomes now a key tool in the validation process of the continuous improvement process.

Growth of Supply Chain Collaboration

The supply chain collaborative network provides great potential for benefits to partners and as their participation grows the benefits will also grow. The importance of the collaborative network has been growing, as well, as a framework to support the disruptive transformation currently at work in the supply chain and in fact, I really do not see another option that provides the foundation and the flexibility to support the change driven in the supply chain by demands of consumers’ embrace of technology. I am viewing this as a dramatic change in the culture of the market where there has historically been a focus on develop, license or acquire companies with capabilities the market is moving into a much more nimble environment driven by an increasing velocity of discontinuous change based on technology combinations and demands of the marketplace. In this market the collaborative network capabilities take on a new, much higher, level of importance because there is just no time for development or acquisition.





Amazon probably provides the best example of creativity in utilizing the power of the collaborative network. Amazon has shown their creativity in extending their product offerings through partnerships with small and specialty manufacturers and even private citizens to provide a powerful shopping and sales outlet and they are showing again their commitment to collaboration by partnering with small carriers and even private citizens in the delivery of products to the end consumers. I see that Amazon has been building infrastructure to support an extended collaborative network for years and they are now expanding their collaboration to take advantage of this foundation and help them to change the market again.





This puts others in the retail market at a distinct disadvantage, again, and this extends out through the entire extended supply chain, including all partners, as well. In this arena Amazon is the 800 pound gorilla driving the change and they are now in an advantageous position because of all of the preparation in foundational activities and their drive the create the future. I think this may be the key differentiating factor for Amazon, in this market Amazon seems to have the vision and are driving to create the future. This means that they are able to define the future as it fits into their foundational framework and it puts an even greater significance on the collaborative network and partnerships that others must follow to keep up.





I see collaboration as the next transformation mechanism and market disruptor and Amazon has shown from the beginning their commitment to collaboration to grow their offerings and market share. We are now seeing the results of this collaborative culture through their acquisition and growth over the last few years. They are continuously focused on leveraging all aspects of their offerings, technology and shopping outlets to produce a cohesive image and flow across their offerings. This collaborative culture will provide the ability to quickly sense and respond to the time of disruptive change that we are entering and there will be a great deal of fall out during this time.

Disruptive Forces On Supply Chain

Over the last 20 years there have been many disruptive forces on the supply chain, each one of these forces, whether technical or operational in nature, have made their mark on the supply chain indifferent manners to bring transformation to the supply chain. While disruption is not new to the supply chain the velocity has increases to a level of discontinuous disruption with cycles of continuous disruption driven by combinations of technologies, operational practices to incorporate the the technologies and the growth of collaboration and point solution providers in the supply chain. The disruption comes from putting together new solutions by combining these factors in new and creative ways to meet the demands. The greatest disrupting factor though is the the technology and the end consumer use of new technologies and collaborative opportunities.




The end consumer is eventually the customer that purchases the finished goods and the disruption starts and end there. The end consumer has embraced the the technology across generations now and there is an increased demand from younger generations that have grown up with and are comfortable with the technologies. I think that the growing acceptance and comfort in the technology from consumers is probably the greatest disruption force on the supply chain. This is, I believe, ground zero, for the disruption and the supply chain is driven by these disrupting forces of the consumer that now has the ability to build their own capabilities. Consumers now can develop their own shopping and and purchasing capabilities utilizing mobile technologies and network improvements that were not imaginable fifteen years ago and as the comfort and acceptance of technology has grown the disruption from the consumer demands has grown.




The supply chain is buffeted by these demands and is continuously looking to streamline and optimize the the disruption to bring transformation of the supply chain to support the demands. Technology has played a huge role in this supply chain transformation and the signs and direction forecast only increased disruption through technology. These demands have forced the supply chain to build a more collaborative network of their partners in order to quickly and efficiently sense and respond to the disruptive forces. Probably the greatest tool incorporated by the supply chain in their drive to react to these disruptive forces are data and analytics tools.




I believe that in the disruptive transformation of the supply chain the silver bullet factor, if you will, is data and the tools to analyze the data to allow the supply chain to effectively sense and respond to these forces. The knowledge brought about through the analysis of data will provide the supply chain with tools to identify trends and react more quickly than before and the objective for the supply chain in this current environment is reaction time. This is all new ground being covered and there are no off the shelf solution in the analytics of the data and then just to make things a little more difficult, the same data will mean different things to different partners within the supply chain. This requires the supply chain network to create a highly collaborative network to sense and respond to the same demands in the ways that make the most sense for each partner. The collaborative network will allow the supply chain to quickly sense and respond to the demands.

Innovation Cycle In Supply Chain

We have entered into a time of discontinuous disruption that is being driven by innovation demands in the supply chain. This disruption is spawned by recent innovations driving new demands that are in turn driven in large part by the technology improvements and capabilities. These demands have create an innovation cycle in the supply chain that has produced amazing results and produced a framework through data analytics and artificial intelligence to support the discontinuous disruption cycles through the innovation cycle responses resulting from the analytics and artificial intelligence innovations. In the future this will become the expected norm in the supply chain and will require increasing innovation in analytics and artificial technology delivered through a highly collaborative extended supply chain network to meet the disruption.




The question comes now of how to continue to meet the innovation demands in the supply chain in order to react and meet the disruption that is driven clearly by technology and customer demands. I am referring in this case to customer / partner demands in the extended supply chain, in other words, everyone in the supply chain is feeling the pressure from demands of their customer / partners and every partners is demanding innovation to meet the disruption in their process and procedures from these demands. In the extended supply chain demands and disruption can only be met with collaboration and innovation. The extended supply chain has been building the network and the collaborative partnerships especially over the recent years to give them the foundational tools in collaboration to meet the disruption in an efficient and robust manner.




This is now where all the efforts to build a robust collaborative network to provide the framework and foundation for partner integration comes into play to provide the basis to support the types of innovation required to support the demands. This network provides the ability for partners across the supply chain to plug in to provide goods and services to support the innovation demands. This is really where the value comes from the collaborative network. Innovation cannot be delivered in this environment without a robust collaborative network that can adjust and support the demands. As an example, the collaborative network provides the framework for pop-up point solution providers to jump in to quickly and efficiently support changing demands thereby eliminating the requirement for the service to be developed internally by a partner. This method of collaborative delivery is much more efficient than any previous model for supporting changing demands and discontinuous disruption.




The final piece of the puzzle necessary to support the innovation cycle in the supply chain is the control tower framework that supports efficient integration and collection of data that is necessary to support the data analytics and the artificial intelligence demands that are driving the successful response to the supply chain demands. Everything runs on data today and without a robust control tower framework to manage the efficient collection and integration of data the supply chain would quickly be overwhelmed with the changing demands. The control tower provides the means for the analysis and reaction to changes in the most efficient manner.

Disruptive Innovation In Supply Chain

There are so many factors driving transformation and disruption now in the supply chain that we have moved from a model of discontinuous change to a model of discontinuous disruption. The disruptions in the supply chain now are driven by the developments and incorporation of new capabilities that are more and more identified and developed utilizing the information and capabilities delivered by increased capabilities in data analytics and artificial intelligence technologies. The pieces of technologies are being brought together through the immense amount of data and abilities to fully utilize the data that themselves have been made possible by technology. In the same way that technologies have allowed consumers to mold their professional interactions to meet their lifestyle needs, technology is also supporting the supply chain and extended partners to meet the supply chain business interaction and operational needs.




In a very real way consumers are driving the disruption through their embrace of technology combined with increased network capabilities that are blending their interactions across every corner of their professional interactions. Supply chain leaders and partners have embraced growth in data analytics that is made possible by technology improvements in data storage, network improvements to move the data and then most importantly the computing power improvements to drive the data analytics growth in capabilities to analyze the data available to understand and define direction and capabilities required to improve the supply chain to meet the demands. The supply chain supports the consumer demands across all industries and the computing power along with the network capabilities available to every individual across the supply chain is driving the discontinuous disruption.




The pieces of discontinuous disruption have been developed and also been growing in their use in the supply chain starting with the growth of the Internet of Things technologies and tools and naturally expanding in the supply chain arena into automation of processes and then add to this the robotic movement that is growing now, especially in the third party logistics industry and you can see that these pieces required a technology and capability to coordinate and connect the dots. All of these technologies are collecting immense amounts of data for the supply chain to utilize to improve the services and increase their capabilities without necessarily increasing the long term costs.




Supply chain leaders are using these technologies and really driven by their own imagination and questioning ‘why not’ to drive this growth and expansion of supply chain processes and operational improvements and most importantly efficiencies. These technologies are disrupting through the implementation and growth of automated operational and process improvements that are driving efficiencies into the supply chain. The true disruption innovation in the supply chain is the imagination that has been released through the implementation of these technologies that are driven in large part by the improvements in analytics and computing power to release and encourage this imaginative approach to disruption.




This is the amazing thing in my opinion, that the consumer is at the center driving the disruption into the supply chain industry based on their demonstrated imagination and use of technologies to put together their own solutions. This has driving the basic need in the supply chain to understand and maintain the velocity of disruption in the supply chain processes and operations in order to meet the business partners that are now driving the same types of demands into the supply chain.

Low Carbon In The Supply Chain

Low carbon initiatives in the supply chain are important for both current and future supply chain initiatives because of the growing focus on climate change and the impact of the supply chain on the climate initiatives. The supply chain transformation includes low carbon as a key tennant resulting from the transformation initiatives that will impact the supply chain carbon footprint, especially demand forecasting improvements across the entire supply chain. Because the extended supply chain plays such a large role in the overall climate improvements initiatives it requires a focus from the supply chain to delivery on the improvements in a manner that does not dramatically increase the costs to the consumer. Also, and most importantly, these low carbon initiatives support the supply chain initiatives currently driving the transformation of the supply chain and the extended supply chain partner and services.




Low carbon initiatives have been an integral part of the supply chain for a long time. In reality low carbon initiatives started a long time ago with a focus on reducing costs of transportation in the supply chain to improve profits and these initiatives really kickedinot gear with the increases in fuel prices. These increased costs drove improvements in transportation efficiencies and with these efficiencies reduced carbon levels. The improvements in efficiencies was also coupled with new regulations into emissions which in turn also pushed increased efficiencies. These costs though were essentially a zero sum gain because the increased efficiencies driving the reduction in fuel consumption more than anything simply covered the costs of increased fuel.




Then regulations began to impact the supply chain by spreading the focus from transportation into buildings and also locations of the distribution centers to improve the transportation efficiencies. These regulations were coupled with tax incentives to offset the costs and entice supply chain partners to convert and build using the new efficiencies. These are also driving supply chain partners to reduce their carbon footprint through solar energy, low power LED lighting, increased insulation to reduce heating and air conditioning cost along with increased safety through the implementation of these measures. These building regulations though expanded the low carbon initiatives into the warehouse, distribution center and offices thereby lowering the overall carbon footprint of the supply chain along with the entire business community.




The supply chain in the last five to ten years has increased use of intermodal transportation methods to increase efficiencies in long haul transport, especially from import ports around the coasts. This is another area where the outcome will provide benefits to the environment while also not increasing the costs in the supply chain. In fact, I think this is one of the major areas where the impact on the environment and the supply chain may result in reductions. We are quickly reaching the point where transportation demands in delivery time reductions and efficiencies in the volumes of deliveries demand a model that takes into account all factors in the supply chain to develop the most efficient, cost effective and environment neutral solutions.




The latest piece in the puzzle is the use of the data analytics and artificial intelligence to develop highly efficient solutions that are flexible and highly efficient to improve the end to end supply chain while maintaining and reducing costs. We have reached the limit, I think, of what I would call non-assisted solutions and artificial intelligence solutions can take the vast amounts of information available to analyze and develop new solutions. The demand for low carbon solutions is only increasing and the supply chain will continue to be at the forefront of these solutions through the implementation and integration of AI designed solutions.

Artificial Intelligence Improving Logistics

Over the last few years there has been a great deal of interest and development in the area of artificial intelligence (AI) and the potential to improve the supply chain and logistics. There is an immense amount of data available across the supply chain from a combination of Internet of Things (IoT) devices connected directly to supply chain partners and the partners across the supply chain network. In addition to the data produced internally to the supply chain there is now also an immense amount of data available from external customers to the supply chain partners though the direct interaction with in the supply chain through through partner portals and direct interactions through integration points with supply chain external customers. The Internet and online interactions provide this data and supply chain partners would be foolish not to use this data to improve their logistics capabilities.





The challenge though for the supply chain has been two fold, how to utilize the data and what data to collect for the analysis and use of the data. Artificial intelligence starts with the collection of data for analysis and this is an important starting point. There is no way early on in the journey to determine what data will be important because the analysis must be performed first to understand the foundation and the potential. The intelligence part of the analysis also requires a great deal of information in order to validate the the hypothesis and then to determine direction based on the intelligence. Starting with the data then you can see why it is so important to collect everything because the intelligence part of the equation will generally require additional data from the same periods to confirm and validate direction.





It is important to collect all data then because you cannot tell what may be important for the analysis and then determining direction. The good news here though is that storage is cheap and the technology to analyze vast amounts of data has been improved through the improvements in technology. These two points have probably done more for the growth and development of artificial intelligence than any other developments over the last few years. These improvements in technology allow the supply chain to refine and redirect logistics activities and practices based on facts and data rather than hunches and hopes. Combine these two technologies with the growth of the Internet of Things capabilities and technologies and the potential for improvements is almost overwhelming.





These capabilities bring improvements and opportunities in automation including warehouse location and slotting, drones and robotics to improve efficiencies and reduce costs. These are not the only areas of improvement to the achieved through artificial intelligence. There will be improvements in volumes, inbound and outbound, forecasts for instance, that will bring dramatic change to the supply chain as the extended partners in the supply chain, especially manufacturers and transportation providers as the revise their processes to incorporate the analytics into their plans and procedures. The warehouse operation though will also be dramatically impacted as artificial intelligence brings the analytics to the equation that allows the operation to understand and immediately adjust labor forecasts to changes in the operation during the date based on near real time events. Artificial intelligence is just another force bringing transformation to the supply chain and the supply chain must start with a baseline of continuous improvements in the flexibility and continuous change practices in order to meet the transformations.

Smart Manufacturing Impact On Retail

The retail marketplace is poised now to truly leverage the capabilities and benefits of smart manufacturing with the integration and expansion of the collaborative retail network. Smart manufacturing provides capabilities to customize and deliver on demand and the practices in smart manufacturing supporting the efficient product changeover and customization allows retailers to refine and expand their offerings into a type of endless aisle without the expense of manufacturing an endless aisle of inventory. This is just one example of the opportunities available with the combination of the collaborative network when combined with the capabilities of smart manufacturing. This can be the next wave of improvements in the retail shopping experience and is really just in the infancy of development and implementation in the retail marketplace.





I believe that retailers have a great opportunity to develop a relationship with smart manufacturers to enhance the consumer shopping and purchasing opportunities for new and customized products for customer purchasing. This will be an awesome development in the retail shopping experience and is an important improvement and additional transformation for the consumer shopping experience. This capability potential from smart manufacturing combined with the capabilities of the collaborative network provide the framework for the next retail transformation.





I see this transformation utilizing smart manufacturing to start from two different directions both the smart manufacturer through direct interaction with consumers and through specialized service providers that partner with smart manufacturers. This will be the first wave of transformation in the retail marketplace because of the traditional retail culture this marketplace change will start with the small and nimble providers that are experimenters and forward thinking. The benefit to the marketplace starts with the collaborative network that provides the framework for the types of services and offerings that are required to introduce the opportunities from smart manufacturing.





Retailers and especially the large retailers should focus on embracing these capabilities offered by smart manufacturing to refine their product development and replenishment strategies. The smart manufacturing capabilities will provide retailers with the opportunity to develop a replenishment strategy to reduce overstock and refine and improve the replenishment cycle in a manner that transforms their forecasting and replenishment to reduce overstock and the costs associated with overstock. This requires though retailers to reevaluate much of their retail strategy because of the recent growth and expansion of the overstock marketplace. The capabilities fit perfectly with the collaborative network capabilities though and this is why it will catch fire with consumers.





Unfortunately, from an historical perspective, the large retailers have historically followed the lead of smaller retailers to experiment and develop the new technologies or capabilities in the retail experience. This needs to change though because of the speed in which the retail marketplace is changing now. The marketplace development is not slowing down and every new development and improvement in the marketplace is in fact speeding the changes in the market. This should be the next focus for the large retailers in their transformation because consumers will embrace these capabilities because it fits right in with their lifestyles.

Conversational Commerce

The retail omni market along with the entire retail supply chain collaborative network is being driven by consumer demand towards a transformation into a social commerce, or conversational commerce, marketplace. I think the conversational commerce name is highly descriptive of the transformation and provides a highly descriptive name to the next transformation wave. The next transformation wave will be focused on the two way interaction between customer and retailer or customer and service provided or retailer and service provider, I’m sure you get the drift. The next transformation will eliminate the hierarchy across the retail marketplace and replace the hierarching with direct connections to the appropriate partner at the appropriate time in the retail transaction. The benefits of this model are dramatic for all parties involved and provide the framework for interaction through the next transformation wave.




Conversational commerce is the next logical step in the transformation of the social commerce marketplace and provides a great way to frame the transformation. The focus of conversational commerce is a two-way interaction connections between consumers and partners to support shopping and purchasing in the omni market. This is a further clarification and more importantly an enhancement to shopping and purchasing in the marketplace. This creates a virtual shopping capability that incorporates virtually the interaction that normally occurs in the physical retail shopping trip. It provides the ability to interact across all of the parties involved in the shopping experience to provide the value added services and products during the shopping experience that would be difficult in the current standard eCommerce or omni market shopping experience. The two-way interaction is a very powerful tool that will improve the shopping experience and increase the opportunities for additional sales and add-on services.




The transformation definitely requires a means to coordinate and direct the communications across the involved parties and this is where the control tower concept and technology comes into play. A control tower framework is required to provide a plug-and-play framework for communication and collaboration with external partners and even consumers that allows the partners to focus on the business benefits rather than the communication requirements. The control tower framework must be embraced and implemented across all of the partners to maintain the communication and realize the benefits. This framework provides the basis for integration from a message perspective to allow the partner to communicate with a partner in the most efficient manner for the partner while maintaining a clean and stable interface with their own internal systems. The framework provides an externally facing tool that is flexible and robust to simplify the addition and integration with other partners, it does not eliminate the work to external partners, it eliminates the work on the internal integration though to the business applications.




Conversational commerce focuses on the two way communication between partners, including manufacturers, transport, service providers and consumers. This model will transform the omni channel retail marketplace again based on the consumer lifestyles and the consumer embrace of technology to support the social network. Conversational commerce is another term for what I have been calling social commerce which is the two way direct communications with all players or partners involved in the retail marketplace. Consumers view retail shopping as a social experience which is why malls were so successful and now the consumers are using conversational commerce to create a virtual mall.