Supply Chain Elasticity

There is more and more bluster focused on the dangers of the global supply chain and the only solution is to move manufacturing back to the US. This sounds great in sound bites as an option but is really not feasible and would never move forward to be executed. There are a few significant challenges to moving manufacturing back to the US starting with the fact that no one will pay the increased cost required of products manufactured in the US. The US has been addicted to the cost savings delivered by global manufacturing and it will be next to impossible to wean off that drug. There are a number of additional challenges including; materials supply chain and people and manufacturing plant capacity that have both been redesigned based on global manufacturing capacity and cost savings.

This leaves us in a state of risk for high impact disruption from global events such as pandemic that impacts entire regions and reverberates around the world. The issue is not a global supply chain, the issue is deficient risk identification and mitigation to react and address disruptions as they surface and not after the marketplace has been disrupted. The goal is to limit the disruption to limit the impact. This requires a focus on VUCA analysis and reaction to respond and address the disruption.The solution involves a global supply chain that incorporates key process and partner backup and alternative options for the supply chain including, raw materials, plants and even transport options to reduce the risk of disruption.


This is not a simple solution though because of the diverse and continuously changing supply chain! This requires a coordinated collaborative effort that combines people, process and most of all technology in ways that support the sense and response capabilities of partners and processes across the global supply chain. Luckily, we are entering a time where advances in technology, and especially collaborative technology, can be incorporated to support the velocity of change. The waves of disruption unleashed by the pandemic have started an era of extreme VUCA requiring enhanced technology capabilities to respond with the same velocity.


This is where control tower technologies come into the picture as a means to support a coordinated collaborative response to the waves of disruption. Control tower capabilities and opportunities have come into their own, and really stepped up during the pandemic to quickly show value. With AI, machine learning and process automation added to the control tower tool box you can quickly come to the point where you can quickly meet the velocity of disruption to react to changing demands and continuous waves of disruption. You must come to accept the fact that you will never eliminate disruption, the point is to build the capabilities to sense and respond before the disruption gets out of hand.


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.

There Is No Normal

 

I am concerned about what I see as a strong tendency to return to the status quo rather than learn, and plan, for change as a reaction to the disruption cycles, or waves, that we are currently experiencing.  This is a tendency that I see across the US culture to return to normal when there really is no normal and I would say the normal is actually the continuous cycles of change we have experienced through history..  Its not a new normal, there really is no normal!  

In fact, in looking back you can see that businesses and governments and cultures have struggled to recognize this reality as a requirement move forward and be successful.  In fact, the business world cannot afford to ignore the waves of disruption and address the disruption by attempting to return to a perceived normal.  Maybe that is the point - there is no normal and the sooner we accept this reality, the sooner we can actually move forward and create a process that imagines risk to prepare for the disruption.

We must focus not on implementation and execution of a process that enables the business  reaction and response to continuous waves of disruption.  This process must enable moving from a single stream focus to a multi-stream focus and most importantly the process must be practiced until it becomes second nature.  This is developing a new muscle that is critical to the success of business and the market.  It seems that the majority of people and businesses are so set on returning the pre-pandemic 'normal' that they are overlooking reality and the need to develop methods that can sense and respond.  The telling point, or proof, of this observation is the seemingly never-ending series of black swan events that buffet the global market in waves.  If black swan events occur on a regular basis it means they are not by very definition black swan events.  These are rather the 'new normal' that we must first accept and then embrace and incorporate into our world vision.  

This is difficult, human nature does not want to change and that is the continuous and compelling theme for a significant number of people and by extension businesses and the market as a whole.  This is a struggle for many and our challenge is to provide the road map to sense and respond to the waves of disruption.  I think that we are reaching the point of actually creating a new series of disruptions as a result of not accepting the change and attempting to return to the previous comfort level.

This new process requires a robust risk management process that defines a business continuity program.  The goal of the risk management process is to imagine disruption and the potential for description and then determine how to respond to the disruption.  This is where multi-stream definitions and planning comes into play because as we continuously see demonstrated in real life; disruption impact is a reaction to multiple pressures and events combined to force a reaction.  This requires a risk management and business continuity program that is robust enough to first identify the potential and second identify responses to the waves of disruption that are combined based on the waves of disruption.  

A key issue and single greatest factor to the COVID-19 disruption is not the actual physical and structural disruptions but the lack of imagination and forsight to first imagine the potential and second to imagine a response.  We see this over and over - the so-called black swan even that surprises everyone.  As an example, whether you subscribe to climate change you should be developing response to the weather based disruptions we are experiencing.  

Here is the key challenge; you cannot hope to define all possible risks and define reactions for all posible impacts.  This is where the risk management process comes into play, you must define the potential of the risks and then based on the risk define the potential reaction.  Imagination of the possible allows reaction and response to the reality.  

How can you implement a robust risk mitigation program?

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.

Business Continuity In Extreme Disruption

The coronavirus pandemic is another Black Swan event that highlights the importance of a robust and flexible business continuity plan that utilizes big data analytics technology and artificial intelligence to support a reactive and flexible framework rather than a structured process of recovery. We see a discontinuous river of disruptive events that are impacting the supply chain along with businesses and customers and the reactions to these events must be swift in order to limit the impact. The world will not slow down and in fact will only speed up in the types of disruptive events that must be addressed in creative and flexible ways.

The seemingly continuous stream of Black Swan events speaks to the need to sense and respond to these events to limit or even eliminate the impact. Early detection and response to the pending event dramatically reduces the impact of the event and this should be the goal going forward! It makes no sense at all to develop a quick response system that leaps into action when the impact is upon us. This goal of early detection requires a focus on risk analysis and that allows early detection in order to act before the crisis. I suggest that a key to the rise and frequency in Black Swan events is due in large part to a lack of focus on detection.

This is the reason I have been focused on the continuous improvement practice of sense and response. The supply chain is in the position of canary in the coal mine and the continuous improvement practice including and focused on robust identification, or sensing, analytics to sense the coming disruption early in order to respond early. The goal should be in risk identification and then analysis of the pending impact and most importantly the likelihood of the risk manifesting itself. After the 5th ‘500 year flood’ it's time to understand and take action to focus on risk analysis and early detection!

This increased importance of sensing the disruption requires an increased focus on risk management and especially risk identification as a key area of identification in the continuous improvement process. This is a big change in focus from short term cost control to risk and disruption control. Focus on risk and disruption control will increase supply chain costs however will reduce disruption impact. This reduction in impact will in the long term reduce costs of the impact on the supply chain and the economy.

The challenge for risk management is incorporating the lessons in day-to-day supply chain management and especially the extended supply chain. The correct answer to the global disruption is not eliminating global manufacturing and the global market, the correct answer to global disruption is early detection and risk management plans to address the disruption. This means alternative supply chain capabilities for materials, manufacturing plants and delivery. These all would produce different effects on the success of reaction to the disruption and each of these require focus on risk and cost analysis to identify when it makes sense, financially and production-wise to make the change.

Unfortunately we are in an age of quick and easy answers and this does not work well in a global economy and supply chain. This requires a level of continuous effort to monitor and analyze the risks and likelihood of occurrence. This process of risk mitigation must be incorporated in the regular review and analysis process of the continuous improvement practice. The good news, in my opinion, is that this risk mitigation can be supported more accurately and quickly by embracing data analytics improvements brought about through artificial intelligence technologies. This is a baseline requirement to the effective analysis of the amounts of data available!

Disruptive Forces In The Supply Chain

There are so many factors driving transformation and disruption 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 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 capabilities to analyze the data 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. These strong outside influences are driving the basic need for the supply chain to understand and maintain the velocity of disruption in processes operations and especially functionality in order to meet the consumer and market demands. Most importantly, though is the continuous improvement process and data analytics capabilities that must be implemented to allow the supply chain to sense and respond to the disruption that is now impacting the supply chain marketplace.

Disruption Driving Transformation Of The Supply Chain

 

Disruption displaces an existing market or industry to produce something new and more efficient and worthwhile. It is at once destructive and creative. Disruption in the marketplace is driving a transformation of the supply chain into a more efficient and flexible framework that can support the continuous disrupting forces. This transformation of the supply chain is driven not only by reaction to disrupting forces in the marketplace but also from the enabling technologies developing at a breakneck pace.

Historically, supply chain disruption has been described as a major breakdown in production or distribution nodes that comprise a supply chain. This definition of disruption implies an event within the supply chain that interrupts the normal process and flow that must be overcome to return to the pre-event state. However, technologies, especially eCommerce technology, coupled with improvements in network capabilities that are driven by consumer lifestyle demands have redefined disruption into a break that will never return to the pre-disruption normal, the disruption creates a new normal.

NOTE: The COVID-19 disruption is another example of disruption driven by consumer demands, in this case though there are additional disrupting factors that add to the equation. These factors include disruption in the manufacturing capabilities and also, more importantly, business continuity disruption that has highlighted the brittle nature of the pre-COVID-19 extended supply chain.

This process of recovery into a new normal is what makes up innovation and new capabilities for the market. Rather than a recovery to the pre-disruption state, the disruption produces a recognition of a need for innovation and change based on the market demands for innovation in the process. Disruptive innovations tend to be produced by outsiders and entrepreneurs in startups, rather than existing companies. This innovation cycle is now driven by consumer lifestyle demands colliding with the existing market practices creating an innovation cycle. This innovation cycle disrupted the continuous improvement cycled to a continuous innovation cycle and the market leaders recognized and adjusted to the change.

Currently, the waves of innovation in the market are driven by supply chain participants recognizing and developing features and functionality designed to meet customer expectations, partner needs and financial requirements. Supply chain disruption is the repurposing and realigning of existing capabilities to support changing consumer lifestyle demands. Then, just for good measure, the great disruptors add new supply chain capabilities to enhance the innovation.

The best change agents in the extended supply chain implement these features and functionality before the consumer recognizes the need. This drive to experiment based on sensing a market shift that creates the demand for goods and services is the actual driving force of disruptive innovation in the market. Disruptive innovation in the supply chain is a leading influence in remaking the market to meet consumer demands. Consumer demands are being driven at an enormous speed and this velocity of change requires robust tools and practices to react. I believe the supply chain is particularly ready and capable to develop these required tools and capabilities because of the history of disruption within the supply chain.

Shifting demands from all corners of the market—ranging from product and consumer services to supply chain partners—contribute to supply chain disruption and in turn are driving innovation in the supply chain as a reaction. Consumers as the ‘Great Disruptor’ in the marketplace and are driving the supply chain to innovate in capabilities and flexibility in order to react to the disruption. The supply chain innovators are driven by a spirit of experimentation that in turn allows them to innovate in the face of the discontinuous disruption. The best of the innovators incorporate the continuous improvement (PDCA - Plan, Do, Check, Act) practice to support the innovation cycles driven by the disruption.

This transformation will only increase in speed as disruption drives new disruption. We have entered an age of disruptive transformation driven by the demands of the market that is no longer accepting the status quo. In order to survive in the age of disruptive transformation the market partners must also embrace a practice of experimentation based on flexibility.

Supply Chain Reshaped By COVID-19 Disruption

There is no question that the Coronavirus has disrupted the world and in the face of all this disruption, the supply chain is being reshaped in reaction to the waves of disruption started by this pandemic. It is safe to say that the world social and economic order has been turned upside down during this time in reaction to the speed and the range of disruption driven by this virus. There has been no area left untouched at this point and the focus is on reaction and adjustments in reaction to the disruption. This requires more than ever extreme flexibility and robust collaboration and communication to sense and respond to the disruption.

I firmly believe that one of the key strengths developed over the years on the extended supply chain is the ability to sense and respond to disruption in a manner that efficiently identifies disrupting factors and resolves through a robust process of continuous improvement. The baseline tools, practices and procedures are in place to respond to the disruption and these have really been the foundation framework that has helped the supply chain to respond and continue to support the market.

The question now is - What process and procedures should be incorporated to allow the extended supply chain to support the multi-faceted waves of disruption that will continue?


These are some key factors that will support the velocity and impact of disruption:

First and foremost is robust, open and holistic collaboration practices. This is key to the ‘sense’ process in sense and response to the disruptions. This requires open sharing of information collected from all quarters in order to better understand relationships and impact of the disruption. Without the collaborative practices the response portion of sense and respond runs a great risk of reaction to the wrong cause of the disruption.

Data collection and analysis provides the information and identifies the relationships that are driving the disruption. There is really nothing new to the level of importance of data in the ability to first sense the disruption and then determine the cause and identify a reaction to the disruption.

Define and implement actions and change based on the data analysis in response to the disruption. One key to the implementation of change is the realization and acceptance that there is no silver bullet that will address the disruption. The disruption is fluid and the changes and reaction must be fluid as well!

The reaction in the system to the change must be reviewed and validated to confirm the response to the change provided a positive impact. This is starting the process over again.

Finally, the most important factor now is speed of reaction! This means multithreading reactions and actions with the analysis of the data. There are two key tool in this time to analyze reactions; the use of Artificial Intelligence and robust collaborative practices.

The guiding factor in this time of disruption must be ‘Don’t Panic and Respond to Data’! This will be the most difficult and greatest time of disruption and when you add the cultural and health disruption to this business disruption the impact can initially seem overwhelming. In order to overcome this feeling we must identify a program that includes a process of actions to address the disruption. We should be using the experience gained over the recent years driven by business and consumer disruption in order to meet the demands of the current disruption.

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.

Social Networks Driving Supply Chain Disruption

Social network collaborative technologies have left a mark on the personal communications world in the way that the technologies encourage both immediate connections and in the communications capabilities between connections. You can see the impact across all areas of interaction and these tools and the new collaborative capabilities they enable have disrupted not only personal social interaction but also the retail marketplace and the extended supply chain network. The disruption in the supply chain network can be seen in all aspects of the supply chain that thrive on collaboration and interaction, in other words these capabilities have disrupted the supply chain network practices. The resulting waves of discontinuous disruption will continue to be felt across the supply chain network for a long time to come.

Social network technologies and the resulting collaboration technologies are founded on open and efficient communications through networks and across technology platforms. The extended supply chain and partners processes and procedures require open and efficient communications through networks and across technology platforms so this has been a match made in heaven. This embrace of technologies was simply waiting for the right moment of technology and extensions of network technologies and frankly imagination to rise and disrupt the supply chain.

The pieces and practices have been in place in the supply chain for a long time and really waiting for someone with the imagination and will to define and deliver the potential. The tools for communication between have been available through EDI technologies, for instance. These technologies have been enhanced though to support extended connectivity demands via improvements in network and wireless technologies. The Internet of Things (IoT) has played a key role in the disruption of the communication. These technologies continue to disrupt process and practices as capabilities are developed to support the demands.

The areas of focus and disruption change based on reactions to demands and imagination in delivery and capabilities. The LTL market, for instance is in the throws of a major disruption now based on shared ride technologies. This has flowed into freight forwarders and also customization demands to support inventory management for last mile deliveries. This is a great example of consumer demands driving the market to incorporate social technologies, in this case ride share technologies, into the business process to improve the practices. Another example of technologies and network capabilities impact on supply chain is the Iot tools and capabilities utilization to improve tracking and planning capabilities that has been a continuous improvement process for quite some time.

Blockchain tracking and tracing capabilities are incorporated to support demands of lot trace and date management for food products to provide historic product pedigree information accuracy. These capabilities were initially slow to acceptance and now the combination of market demands (read consumer demands), regulatory requirements to support recalls and improvements in technology and network capabilities are driving this to mainstream usage. Blockchain technologies already provide a great deal of benefits and while already delivered significant impact in the supply chain it is really still in its infancy and I expect the capabilities and usage to expand with new imaginative demand.

Retail disruption has combined with technologies to produce a discontinuous disruption in supply chain to support changing consumer demands. Disruptive forces have always been around and the big difference now is the speed of the disruption. This speed has been increased as a result of technology and network capabilities available to the consumer more than any other factor, the key factor to the discontinuous disruption is the embrace of technology by consumers. The technology, combined with the improvements and growth in networks allowed the consumer to drive change into the market. Then social networks and social network technology encouraged the spread of consumer and business use of the technology. Putting technology into the hands of consumers is driving the rate and size of disruptions.

The challenge for the market and the supply chain is the identification of important and key disruptions, in other words what disruption will have legs that allow the disruption to grow and expand in usage. Unfortunately, there is really no way to determine the winners and losers and so the supply chain must act on all. This is where social networks and collaboration really show their value. Social networks provide the means to sense the disruption and measure the speed of growth along with clarification of the disruption. Collaboration and collaborative development allow the supply chain to respond and react to the disruption.

Retail Renewal

The retail market is in a process of renewal as a result of the disruption brought about by the omni market change by consumers to the marketplace. This is a good thing and a necessary thing that drives the market forward to support consumer demands. This time though the renewal is in part driven by consumers through technology and collaboration and in part driven by consumer focused Internet retailers like Amazon that are themselves encouraging and experimenting with consumer changing demands. I believe though that this renewal cycle is different from previous cycles in that the renewal will be a continuous cycle of disruption and renewal in the market. This is the key theme coming through in this cycle of renewal and this is one of the key differences i this new cycle from previous market cycles.

During the market renew driven by eCommerce and essentially lead by Amazon there was a theme carried through the disruption and the market renewal; the consumer demands to simplify their shopping via the Internet and eCommerce. This theme carried retailers into the next generation of the marketplace to produce and omni channel shopping experience. This was comforting to the market players as well because it was a proven direction that they could copy to produce results. The challenge to this cycle in the marketplace is that there is no common theme that carries through each example of disruption and renewal.

There is no visible common theme that can be reproduced for success, the success of one retailer cannot simply be reproduced by others. There are two key differences in the current cycle of disruption:


There is no common thread of success in the market. At odds with previous cycles of market disruption and change; the success from one cannot be copied by another. One retailer thrives and grows because of the strength of their brick and mortar outlets while another succeeds because of their online presence.


The disruption comes in a discontinuous cycle that does not give the market a chance to really settle. This presents a struggle to maintain the pace of the change and also does not allow for the response to be duplicated for across the market. Almost as soon as a disrupting force is recognized and addressed the next disruption is sweeping the market

This cycle of disruption is driven by consumers rather than by some retailer, as in the past and this is a very important difference in this disruption cycle. The last major disruption to the market in my opinion was the explosion of Amazon on the market. This disruption, like previous disruptions, was driven by a retailer with a vision that was embraced by consumers. This disruption, also like previous disruptions, spread through the market quickly with the concept, in this case the drive for the lowest price combined with ease of purchase and vast selection, was accepted and extended by other retailers until it seems to be embedded in the market DNA. This disruption is also in many ways at the root of the current disruption.

This current disruption started with the concept and the drive for the selection, price and ease of shopping. In the beginning, consumers' focus on low price was supported and driven by the opportunity of Internet retailers to cut prices. This was the result of retailers reacting to consumers and these same retailers attempting to gain market share. This drive from Internet retailers was borne of the drive to succeed and the ability of these new Internet retailers to take advantage of the market and cut costs dramatically because of their reduced overhead. Now this lowest price concept and drive has become the foundation of the retail market in many ways has also in many ways now bitten the creator of the concept.

Now the combination of technology and the growing ability of the consumer to direct and even change their shopping is also disrupting the market in a series of discontinuous changes that are driven by the imagination and the demands of the consumer. Now this new renewal is all about the consumer ability redirect and direct their shopping in ways that support their individual lifestyles along with their desire to spend less and get more in return. This new discontinuos disruption cycle also is creating a model for continuous renewal with technology providing the means and consumer lifestyle demands providing the direction.



This new market driven by continuous disruption requires each participant in the market to sense and respond to the disruption in a manner that is based on their own imagination and capabilities. This is the change that is impacting the market in the greatest manner because in previous cycles there was always time to confirm the most effective response and then this response would be reproduced by others. Now when the most effective response for a particular retailer is identified the market has already entered the next disruption cycle which changes the success factors. Retailers must change their culture then in order to succeed in this discontinuous disruption cycle.

Supply Chain Collaboration

Supply chain collaboration practices will provide the framework and the foundation for the retail extended collaborative practices across the marketplace including partners, service providers and consumers. This is how important these collaboration practices and framework are to retailers in the marketplace. The challenge for retailers is to recognize these capabilities for the critical nature that they represent in today’s retail marketplace and then to take the appropriate actions to embrace and integrate these capabilities as a critical aspect of their shopping and purchasing framework. This is where the partnerships and the culture of collaboration come into play and requires the retailers to recognize these trends and take actions to incorporate and remake their offerings in a way that incorporates collaboration with partners and most importantly with consumers to allow them to sense and respond to the demands of the marketplace.




Most retailers continue to focus on integrating and adding eCommerce type goods and services to their offerings and then integrating these goods and services into the brick and mortar outlets. This was a very valid action to allow these retailers to attempt to catch up to the the consumer in their demands. This practice highlights the fact though that the retailers are still following trends in the market and acquiring companies that have developed the service or offerings after the trend is identified. From this perspective these retailers have not changed their culture or their practices that have been ingrained in the culture over many years - wait for the trend to be proven and then move to incorporate or acquire the trend. The recent trend from retailers now, to acquire the goods or services, has shortened the delivery lead time, however there is still a longer lead time from initial trend to the retailer responding and delivering the goods or services.




These retailers that do not change their practices and culture to one of extended collaboration and add to this a culture of experimentation are doomed to repeat the same cycle of slow failure that many of the large legacy retailers are currently experiencing. These retailers must change their culture to encourage and drive collaboration as a means to support experimentation in both goods and services. The supply chain has experience in this type of market upheaval and can provide support and guidance, along with new services that will support the market demands, if only retailers embrace more open collaborative practices.




Retailers must shift their focus from internalized measures to external collaboration and experimentation in goods and services. These retailers will never catch up by chasing trends and acquiring companies that are supporting these trends and they will also never gain enough time by cutting costs, Retailers must go back to their roots of experimentation and invention rather than following the leader. This is exactly why Amazon has been able to disrupt one market after another, Amazon is the master of experimentation in the retail market and have shown over and over again that they are willing to experiment and fail in the marketplace in order to move forward.

Omni Market Supply Chain

The omni market renewal is a massive undertaking that will span years and will in all reality probably not end and the extended supply chain plays a major role in the success of the renewal. As a result of the market renewal, the extended supply chain is also experiencing and in turn also being driven by the same disruption renewal in the retail marketplace. The extended supply chain began to recognize and take actions much earlier in the cycle than the key retailers because to a very large extend the extended supply chain and partners experienced a major market disruption a result of the great recession and this disruption forced the supply chain partners to address extreme pressure on costs and capabilities with similar impact as the disruption currently being experienced in the retail marketplace.




I think the leaders in retail disruption and renewal have long recognized the importance of their extended supply chain in supporting demands and they have shown their understanding through their focus on working with their supply chain to incorporate new capabilities. As example, the key retail players in this current disruption and renewal cycle, Amazon and Walmart, have both been early adopters of supply chain services and capabilities and have shown their recognition of the potential of a robust collaborative extended supply chain. Their demonstration of this understanding has come across as a focus on the automation that can improve throughput and costs and most importantly efficiencies. Early on efficiencies in supply chain execution were a key focus and these were critical to support the retail model in a global supply chain.




Now we have entered into a time where the retail marketplace is highly dependant on their supply chain to support the consumer selection and delivery demands and the supply chain has stepped up in many imaginative ways to address these challenges. This extended supply chain is able to now only support these demands but also develop and implement new solutions to simplify the process and they are able to do all of this because of their historical drive to manage costs, and improve services. The extended supply chain partners may be uniquely positioned to provide guidance and support to their retail partners to help guide through the challenges and demands of changing a culture while flying at 800 miles an hour.




The solution and means to meeting the marketplace disruption are rooted in collaboration and partnerships. This requires an extended focus on changing the culture of both organizations and the market. The market culture really starts with the consumer and consumers now are driving the disruption through technology tools and services available to them and most importantly these tools and services are continuously changing and improving as well to provide new capabilities and combinations to consumers. We have seen that consumers can be impatient in their demands and require a continuous interaction and reactions from all retail marketplace partners to sense and respond to the demands.

Market Repurposing

The market is changing at a breakneck pace an impact on participants in ways that never would have been imaginable just 3 years ago. This is the result of breathtaking advances in technology and especially the network and connectivity of the technology and tools across the marketplace. I live in an urban area and can just look out the window and see the impact of the technology and the connectivity. Add to this the promise of 5g wireless technology and this pace will only increase and the disruption based on the technology will increase as well. This all leads to a focus on market repurposing of technology capabilities and more importantly of real estate and the use of physical locations to extend and provide new capabilities to the brand. There is really no telling right now how the market will look in the next 5 to 10 years but I think it's safe to say that the retail brick and mortar location will be completely re-purposed.




We are in the midst of almost complete market disruption where many of the largest historic retailers are failing in new ways as result of the digital retail competition coupled with consumer embrace of the technology and the opportunity to reshape their shopping and purchasing to meet their lifestyle needs. This change has reached a level of velocity that is most difficult for the legacy retailers to maintain as a result of their need to redesign their services and practices to support the new digital demands of consumers to support their shopping. Another result of the digital disruption is the impact on the brick and mortar stores and malls. You can see the results everywhere with empty malls and store fronts and as the larger retailers are fighting to survive they are also shedding real estate. This leaves new opportunities in the market to address other demands of the market but it will take imagination to re-purpose to meet the digital demands.




Repurposing is an important method recycle and reuse processes systems and most importantly physical structures. Retailers have been very adept at adding new processes and systems to meet the market demands and now these retailers must also become adept and re-purposing processes and systems to quickly and efficiently adapt to the market change. Frankly I don’t see a way that retailers especially can survive the velocity of change and market disruption without re-purposing. Repurposing becomes even more valuable when you extend your capabilities through enhanced and increased collaboration with network partners.




Repurposing is also becoming important in the brick and mortar side of the omni market as well. Real estate re-purposing presents and allows the market to reuse the real estate to better support the changing market demands. As the real life shopping decreases it leaves more time for life style enhanced activities and drives the re-purposing of the real estate landscape. For instance, with the increase in eCommerce sales, the demand for big box stores and brick and mortar outlets is changing and decreasing which provides the opportunity for retailers and malls to repurpose building, perhaps converting large big box stores into direct to consumer fulfillment centers, for instance, or even entertainment centers or even living spaces.

Disruption Includes New And Obsolete

Market disruption, and especially the current market disruption, must include two side, the new and the order or obsolete. This is an extremely important concept for the long term success in meeting the change and in my opinion should be viewed as an opportunity to replace legacy inflexible processes and interfaces with a more flexible and robust framework that can support the velocity of the change. The key to success is in reduced reaction time and this means reduced time to sense the change and then reduced time to react and respond to the change. One of the key limiters to the reaction and response to the change is the technology infrastructure and framework of tools and processes supporting the framework. The actions taken to address obsolete functionality and processes will be large factor in the ability of market partners to react and respond to change from within and outside of the organization.




In my experience, every company or organization is enamored with the new and this is especially true in the social commerce marketplace and you see examples over and over again of organizations acquiring new technology in the omni market space to allow them to provide new sales and delivery options. This is all well and good however these organizations also must obsolete and retire services as well. Again, in my experience, there is less of a focus on the obsoleting process than there is on new service development. This weight of the maintenance for support and also more importantly the cost and effort to take into account the obsolete services and technology required for implementation of new capabilities will quickly overwhelm the organization. In the past, an organization could conceivably implement new capabilities and just stop using the legacy capabilities without much of an impact. In this current market environment though the level of change is only increasing and this will require the retirement and removal of obsolete capabilities and services in order to support the velocity of change.




The challenge now for organizations is how to balance, or include, the effort to retire obsolete capabilities while implementing new capabilities. This can be a bit overwhelming at first because the level of effort required to obsolete and retire capabilities is not included in the organization effort plans and schedules, at least initially. These organizations must quickly overcome these issues in order to incorporate the retirement as part of the new capabilities delivery. This can be addressed by updating the capabilities delivery process and procedures to include the questions initially when reviewing the new capability to identify the legacy services and capabilities that should be reviewed for obsolescence. In my opinion this is the best place to evaluate and also enforces the process and procedures in new development.




Traditionally large legacy organizations focused on the new initiatives and this focus tended to leave at least remnant technology and services after the new product delivery. This practice did not impact the organization when change moved at a slower pace. Now with the increased change velocity turning into market disruption, these organizations must focus on the process to obsolete technologies and services because of the impact these unused legacy technologies have on the ability to delivery new change in the manner and speed demanded by the marketplace.

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.

Optimize Fulfillment Through Logistics

Customer order fulfillment services remain front and center in the priority list of retail services and capabilities and this will remain for the foreseeable future. The customer is continuously demanding improvements in fulfillment services in support of their changing lifestyles and this has been increasing in velocity of the years and again these changes in demand show no sign of slowing. These points come have been coming together to push the demands for change even earlier in the supply chain to require changes in supply chain logistics to support the fulfilment demands that are coming in quicker and more powerful waves. The supply chain and the partners in the supply chain from fulfillment services, to product and material supplies, to demand forecast and planning are all coming together now in the extended collaborative network to optimize fulfillment services.





According to Wikipedia ‘in a general business sense, logistics is the management of the flow of things between the point of origin and the point of consumption in order to meet requirements of customers or corporations’. Based on this definition, fulfillment is a piece of the logistics chain and benefits from the improvements to the entire chain. This is important to understand the interactions and dependencies across the entire extended supply chain in order to understand both the demands on the entire supply chain and also the dependencies and interactions required to support the demands in any function within the supply chain. Based on these demands and the relationships across supply chain you can see the importance of the network and the importance of the means and the methods to communication across the entire supply chain in order to optimize the fulfillment services within the network.





Communication and collaboration requirements have increased dramatically and will remain a key requirement to the continued support of the changes across the supply chain. This requires a control tower network and process that allows the supply chain partners to plug in and provide integration and communication tools through the entire supply chain to reduce the cost and effort for new partners to participate and support new services and products across the entire supply chain. The retail extended supply chain cannot afford to continue in a command and control practice and procedures and must transition to collaborative practice a procedures in order to effectively support the demands with the velocity that the changes demand.





The extended supply chain partners are in a position now to support the changing demands to improve the end fulfillment of goods and services. The network partners are in place now with the goods and services to optimize the fulfillment and not only that but to also to provide the framework to support the changing demands. The focus now for the extended supply chain should be implementing the control tower communication and collaboration capabilities to support the collaborative interaction required to create the supply chain collaborative network. I believe we will begin to see an increase in discussions and topics focused on this control tower communication and collaboration tools and capabilities to support the optimization not only in fulfillment services but probably more importantly in the entire extended logistics supply chain.

Importance Of The Network Control Tower

The rise of the collaborative network and expansion of the social network practices increases the importance of the network control tower concept to help in coordination of the collaborative practices.  The practices and capabilities making up and supporting the collaborative network will not allow for any one partner to control the network. This requires a control tower concept implementation by the retailer to allow the retailer to coordinate the integration and communications across multiple partners and consumers.  This social relationships and practices required by the collaborative network requires a control tower type of capability in order to coordinate and encourage continued collaboration across all of the partners. The strength and stability of the collaborative network does not just happen, it requires effort by the partners within the network and this requires a control tower practice to coordinate and encourage collaboration.

This is where the collaborative network maintenance and support gets a little interesting, and complicated at the same time.  The collaborative network is based on a social network framework design that allows and expects each partner to maintain the connection and the communication.  Consumers are used to this and perform the connectivity maintenance as a matter of course and as the end consumer in the connection they are comfortable with maintaining the social links and connections themselves.  Consumers are accustomed to this maintenance as a result of interaction with other social networks and it should be a truly short trip for consumers to engage in the retail market collaborative network.

The challenge I see is with the retailers because of the requirement to release controls in interactions and in relationships.  This will be especially difficult for the larger retailers that have become accustomed to a level of command and control they have maintained for a long time.  This is where the benefits of the control tower practices and software capabilities can help to smooth the transition. The control tower provides the retailer with the ability to bring together the connections into a cohesive process that will allow them to control the flow and the interactions.  This is critical to the success of the collaborative network and will require a high level of focus to maintain and especially while the collaborative network is in the initial stages of integration and also communications.

The collaborative network creates a great deal of connections, both direct and indirect, and these connections themselves require a great deal maintenance, care and feeding, to grow and and expand over time.  This means that the partners much each maintain their own control tower process to maintain the number of relationships and demands from their partners. This control tower concept becomes essentially the collaborative network connection both to and from each partner and allows for the easy connection to new partners as well.  

This control tower must be easy to maintain and easy to connect to new partners and maintain the communication and interaction to existing partners.  This control tower allows the partners to provide access as necessary and also insulates the internal processes and data from external snoopers. The security provided by the control tower is an especially important aspect because of the potential impact of failure.  This security aspect is critical to the success of the entire collaborative network and cannot be scrimped on to ensure the comfort and the security of the network and the partners.

Supply Chain Strength Through Collaboration

The supply chain has always been under an intense level of pressure to contain costs while improving services, and service levels, and this pressure has required, or forced, the supply chain to develop a strong network of partners that can provide on-demand support of services.  The supply chain first of all is built on the partnership of the many service providers, contributors and the users of these services such as manufacturers and retailers that depend on the supply chain for their livelihood. This network of partners supports the ability of the supply chain to meet the demands and also new services that are changing the marketplace.  The supply chain depends on a strong network of collaborative partners and service providers to deliver benefits and services from one end of the supply chain to the other end.

The supply chain has been at the receiving end of almost overwhelming demands to improve services and reduce costs for retailers, manufacturers, carriers and intermodal partners and as s result, the supply chain has been forced to develop a collaborative network of partners that can quickly and efficiently react to changing demands.  Rather than breaking under the pressure of these demands, the supply chain developed into a collaborative network with a large number of specialized partners providing the services, as needed, to react to the wide array of pressures and demands. This puts the supply chain in a position of strength supporting the needs of the partners across the chain.  The various pressures from customers, weather events, changing marketplaces could have only been met by a resilient and flexible supply chain of collaborative partners.

This collaborative partnership should be viewed as a case study in the potential of a collaborative partnership that not only supports the market demands but also actually disrupts and reshapes the market.  There are so many examples of successful change initiatives over the years that can be used as examples and benefits of the collaborative partnership. The supply chain requires support of disrupting factors in weather, materials  and changes in the global economy, the supply chain is really the tip of the spear supporting the demands of the global economy and the engineered approach and focus on continuous improvement has truly allowed the supply chain to meet these demands.  It must be understood that the supply chain is not perfect, however the continuous improvement practice provides a strong foundation of methodology and process address issues and changes as they are identified. This continuous improvement process provides a strong means for the supply chain to sense and respond to changes and issues.

Other marketplaces and participants would gain significant benefits by implementing the collaborative partnership network framework that the supply chain has proved to be resilient and successful in meeting disruptive forces.  The combination of the global economy and the improved abilities delivered through technology have combined to force the market into a path towards collaborative partnerships. I really do not see any other options that can react to and address the market disruption with the same level of resilience and success as the collaborative partnership framework.

Omni Supply Chain

The retail omni market requires an omni supply chain in order to support the demands and the velocity of change that is being driven by the omni market and the collaborative partners across the market.  I think one of the most challenging aspects of the omni supply chain is the interaction required between the retail omni market participants. This means that the omni supply chain must also develop and continue to enhance a social collaborative aspect and integration into the omni supply chain in order to ensure they fully participate in the omni market and also in the collaborative aspect of the omni market.  The omni supply chain must be robust and yet flexible in order to continue to meet the demands and actually help to drive the demands across the retail omni market and this requires an open and collaborative viewpoint in order to both support the demands and even provide guidance to the retail omni marketplace.

Let’s face it, over the last few years there has really been a renaissance of features and function in the supply chain along the path to developing the omni supply chain.  In fact I think that he omni supply chain has developed a set of capabilities that allows and supports the efficient integration of the Internet of Things technology to support the end to end transparency that is necessary to support the changing demands for the omni marketplace.  These capabilities combine and compliment the retail omni channel capabilities to provide and opportunity for end to end transparency and interaction with participants to deliver on the demands. The supply chain has continuously focused on transparency, connectivity and collaboration across the entire supply chain and these capabilities complement and enhance the capabilities of the retail omni channel.

The retail omni market will need to focus on the integration to these supply chain capabilities in order to build out the omni market capabilities and meet future demands.  These demands include fluid and transparent product visibility and delivery across all channels and will also require visibility and even the ability to take action to direct an redirect future deliveries across channels to efficiently meet consumer demands.  As the market becomes more fluid the supply chain must also become more fluid and flexible to meet the demands.

A critical factor to the future success of both the omni supply chain and the omni retail market is the support and embrace of collaborative practices across and between all participating partners.  This collaboration and interaction will allow the participants to react to any change in the environment and also support fluid reactions across all channels and participants to changes in demands and abilities along the way.  The fluid interaction and collaboration will allow the participants to quickly react to changes in circumstances and then utilize network capabilities to react and adjust to quickly meet the demands.

The great benefit to this collaboration and extension of networks is the increased flexibility to reach to changes in shopping and purchasing requirements.  What we are seeing in the market is an increase in imaginative reactions to consumer demands along with new shopping and purchasing capabilities to meet the demands as they materialize.  The goal of the omni market along with the omni supply chain must be to increase transparency and collaboration to reduce reaction times and also increase the choices for reactions.

Retail Relationship Collaboration

I am convinced, and have been for a long time, that collaboration in the supply chain environment and among the extended partners is critical to the success of the supply chain and all the partners within the supply chain.  I have seen evidence now of the extension of these collaboration practices extended by supply chain partners to the end consumer. The best example is parcel delivery of orders where the major carriers have developed collaborative tools to interact directly with the consumer to plan and re-plan parcel deliveries.  This example shows the benefits that can be achieved by all parties in the transaction when they are open to the suggestions and comments of the other participants in the transaction. This example can, and must, be extended throughout the retail omni marketplace to proved reasons for the consumer to return.

Retailers and especially the large legacy retailers fell into a trap of chasing the lowest price offerings for the goods and services in the hope of encouraging consumers to return when in fact the practice created a monster that required continuous feeding in order to survive.  The fact of the matter is that consumers only returned and purchased when the retailers offering was the lowest price and this drive to the bottom created an almost overwhelming need to continuously reduce costs and expenses. Rather than a continuous improvement program this created a continuous cost and expense reduction process that may have produced sales but the sales could not be expected to support a vibrant business offering.

In the meantime leaders in the dCommerce marketplace such as Amazon were focused on developing the collaborative relationship with the consumer because they realized early on the importance of the collaborative relationship with consumers.  Amazon came into the market realizing they must develop a relationship with their customers and as a result they focused on collaboration and continuous improvement of their relationship with their customers. Now, I agree and understand that Amazon came into the market with a huge cost advantage that it leveraged to provide the lowest cost offering for so many of their products that consumers gave them a chance and placed their orders.  Amazon also focuses on technology to enhance the consumer experience. These a big differences than the viewpoint and direction of the legacy retailers who moved into the eCommerce channel as a means to reduce the sales transaction costs and open another sales channel.

The large legacy retailers must now extend their focus and their efforts towards developing a collaborative relationship across the marketplace as a means to survive.  This is a huge shift in focus and effort and most importantly a shift in culture for these large legacy retailers to collaborate in decisions that will benefit all participants and engage with the participants.  While this is extremely difficult it is also absolutely necessary activities for the large retailers in order to survive. This is not a project though, it is a program that requires continuous effort to engage and collaborate.  This will be difficult at first however when they begin to realize the benefits it will encourage them to continue and grow the collaborative relationships. This has been a great area of success for Amazon and there is no reason that the large legacy retailers cannot also gain from these activities.