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.

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.

RPA As Transitional Bridge To Digital Transformation

Digital transformation is a wide ranging and disruptive strategy that realistically will take years. This strategy will also define the framework that will regularly and continuously replace technology tools based on the changing demands and continuous waves of disruption in the market. You must accept and support this concept in order to be successful in developing a resilient supply chain that is capable of suppurting these transformation efforts. You must accept that there will always be strategic digital transformation initiatives that will focus on areas of greatest return in value. Maybe most importantly, this does not mean that you can afford to only focus on a small number of areas because you will be left behind in the dust of market disruptions.


This means that you must develop a method that will allow you to ‘bridge’ the gap between your current legacy technologies and new technologies that result from market and consumer disruption. One very robust method to bridge the gap is RPA because RPA technologies will allow you to automate processes through the use of technology tools that ‘bolt on’ integration and work flow management capabilities to legacy technologies. There are many examples of these capabilities that bring great value very quickly to your business that will allow you to focus on other strategic initiatives.


I think of RPA as a key tool in your continuous improvement process that will allow you to quickly and efficiently prove out your automation initiatives and strategy. We can no longer afford large initiatives of wholesale change and hope they meet the initiative objectives. We must have a way to prove out the process quickly and RPA provides the tool to support a more resilient and flexible supply chain.


I hear many people stating that RPA is ‘just’ a new and updated method of the old screen-scraper technology from the 90’s in an effort to detract from the technology and encourage the focus on what they feel a better long term capabilities. I am afraid that this focus on the ‘perfect’ will delay the ‘good’ of value delivered quickly through RPA. This strategy is a recipe for failure in these times of continuously changing demands and waves of market disruption. The best course is a focus on resilience and flexibility to sense and respond quickly to the disruption.


My feeling regarding this view is that we do not have time to only focus on the perfect because, quite frankly, perfection will never be achieved. There will always be the new market or customer demand, the new technology, the new application, the new business process that will require inclusion in your strategy and your operation. The focus on perfection will lead to a business failure to meet the demands of your customer and this failure will cause you to lose customers.


Instead, focus on speed of delivery using bridge technology that will allow you to prove the concept prior to a large investment. This is the space where RPA will shine and you can move your business forward while implementing a more long term solution. The first step then is to define your resilience strategy that identifies your weakness in resilience and then use this information to select and utilize a robust RPA tool.


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.

Generation AI Influence On The Market

Artificial Intelligence has greatly impacted the supply chain and ‘you ain’t seen nothin yet’ as they say. The market disruption is driven by the combination of consumer embrace of technology and the growing embrace from technology savvy, older generations in the market and the workforce. These converging influences are driving the supply chain now to incorporate these same new technologies in combination with artificial intelligence in order to sense and respond to the disruption. Disruption in the market will only increase because of technology capability improvements and the imagination of the consumer. This imagination and experimentation will increase the disruption as the new generations increase their involvement in the market.

We are seeing now a dramatic increase in market participation by millennials and gen-x and in turn the market must be prepared to incorporate their reactions and demands. As for sensing the demands, there is so much information available now in the market based on the online habits that there is really no way to sift through this vast amount of data to succeed in reacting and meeting the demands without Artificial Intelligence. We are seeing now the results of poor the poor sense and respond capabilities in the marketplace with legacy brick and mortar retailers struggling with the disruption and lurching from one attempt to react to another. The market itself and the consumers have moved on before these retailers can react. This is essentially a real time demonstration of the disruption in action and this will only increase in velocity.

The key disrupting factor now is mobile technology and how the younger generations are using this technology to support their lifestyle demands. This disruption has increased in velocity as the concepts are proven by early adopters and then spread through other consumer groups. Based on the embrace of mobile technology, what was once a strategic weapon is now almost a strategic albatross, I’m speaking of the number of brick and mortar stores. This embrace of mobile technology requires an equal embrace of the omni channel shopping experience by the large retailers. The current major disruption rolling through the retail market is related to the demands of consumers for a true omni channel experience. The retailers struggling are the larger retailers that have been slow to invest in technology to develop the experience.

Now we are seeing the results of this shopping disruption, especially in the large department store sector, where the early adapters are succeeding and the late adaptors are struggling! The struggling retailers are seeing the results of previous strategic practices to hold off on investment until the market settles and the winning technology has been selected by the market. As a result of the velocity of change in technology and use of the technology the winning technology is not selected by the market, instead the technology is embraced and usage of the technology modified and enhanced based on the users of the technology.

I see that the most significant disrupting factor in the market now is not related to technology use by the marketplace but related to the technology use by consumers within the market. Consumers have now turned the table on the market by developing methods that must be adopted by the market and retailers rather than the market pushing capabilities to the consumer. This is really where consumers are driving the market and this is also the most significant opportunity for a retailer such as Amazon or now Wal Mart to really reshape the relationship with the consumer and in doing this reshaping the market itself.

Market Technology Transformation

Disruption in the market is now being driven to a very large extent by technology and this technology transformation is being led by the demands on the supply chain from consumers on the market. In all aspects of the market we are seeing a transformation that is being driven by the changing lifestyles of consumers. These changing lifestyles are, to a very large extent, enabled by technology that is available to consumers in every aspect of their daily activities. Consumers have embraced technology in every aspect of their daily activities and the impact on their lifestyle has been dramatic in the opportunities to meet their changing demands. This presents a challenge to the extended supply chain partners to support the market transformation that is driven by changing technology.

The most obvious example of technology that has dramatically impacted consumer lifestyles is the smartphone. Consumers have embraced the smartphone in every aspect of their daily activities to enable them to meet their changing lifestyle. These demands have transformed the methods in which they communicate, shop, pay bills and share experiences. The smartphone, in combination with improvements in wireless network technologies, are key factors in the market transformation and this transformation is only increasing in velocity. I know in my own activities that this technology has transformed my ability to meet the daily demands of family and career to allow me to blur the line between all activities; I can shop any time and then plan for delivery to meet the immediate demands, I am available for response any time the need arises whether personal or work related and the technology allows me to react based on the demand.

Technology has become pervasive across all activities and this has transformed the consumer market into an expectation of 24/7 shopping and delivery to meet the demands at the time. These demands have required the transformation of the extended supply chain to quickly and efficiently address the demands first and foremost. Most importantly this has required the transformation of the extended supply chain to develop the methods and processes to quickly and efficiently sense and respond to the changes. The transformation requires not only efficient response to new demands but experimentation with capabilities to create new consumer demands. The velocity of transformation has reached a level where the ability to react to demands is not enough to maintain share in the market participants must anticipate demand before consumers realize in order to maintain share.

Experimentation can be frustrating because of the potential for mistakes and failures. However, the market is changing at such a velocity that there is no choice but to experiment with creating future demands. This is especially difficult in the retail market because the culture and accepted practice is at odds with leading edge experimentation. We are seeing now though especially with Amazon and niche eCommerce retailers the rise of experimentation as a key capability. This transformation has dramatically impacted large legacy retailers causing failures and a struggle to keep up with the changes. The market is now seeing early signs of leading retailers such as Target or Walmart finally transforming their practices to leverage the multi-channel marketplace to transform their business.

Change has been supercharged into transformation and consumers are driving the retail market into continuous transformation that requires new methods and processes to anticipate demand rather than react to the demands. These processes must support faster and more flexible adjustments that are driving continuous transformation of the market. We have reached a point with technology where the speed of change requires anticipating and adjustments rather than sense and respond. This will further shake out the market and drive transformation in the supply chain.

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.

Preparing For Disruption

Disruption is defined as a break or interruption in the normal course or continuation of some activity or process and so you would also assume that this disruption is caused by some time of surprise, unplanned, event that causes the interruption. Then by this definition it is very difficult to plan for disruption, however you can prepare for a disruption by developing flexibility and improved sensory tools to quickly react to the disruption. The challenge then is; how do you prepare for a surprise or unplanned event? Considering the worst case result of the disruption, though it is one of the most important activities for any business and especially for the retail marketplace and the partners and infrastructure supporting the retail marketplace. In short somehow preparing for disruption is at least as important and should receive the same focus and effort as sales forecast and product development.




I say this because disruption by its very definition cannot be planned and as a result there is no way to forecast how or when the disruption will materialize. So the disruption can be in products or sales channel or even marketplace and the disruption ripples across a large number of participants and even other marketplaces impacting process and activities in its wake. We have reached a point though in technologies supporting the marketplace activities and processes that has dramatically increased the partner flexibility capabilities along with the analysis and forecast capabilities that can be incorporated to support the sensory early identification of potential disruptions and allow the partners in the marketplace to quickly adjust in a manner that allows them to react to the disruption and address the interruption.




The focus in the retail marketplace must be on sensing or even creating the next market disruption. This can be achieved through robust collaboration and data analytics. The key though, in my opinion, is the sense potential change and move to react and take advantage of the change. In order to succeed in the response to change the partners must embrace failure and understand that the only way to meet the challenge is through a continuous improvement process of plan, do, check, act, or, trial and error. This process must increase in velocity though in order to reduce the reaction and action timing. The goal of this process is to not just improve the ability and the speed of reaction but to actually help to disrupt the marketplace base on the reactions of the consumers. This, in effect, has been the path taken by Amazon in their market disruption over the years, Amazon has recognized signs from consumers and taken action to react and support the consumer demands.




Unfortunately this is a culture change in addition to the change in process and the culture change will be the most difficult to install. It will require a continuous focus and engagement from all levels and all partners in the marketplace to succeed. However, there really is no other option and the sooner this is realized and embraced, the sooner the disruption will be understood and embraced.

Conversational Commerce

For a very long time the brick and mortar retail could be considered what I would call conversational commerce in that there was a give and take type of interaction between the consumer and the sales associate. This was disrupted with the entry of eCommerce bringing online sales and also a push towards cost savings in the the brick and mortar market that all but eliminated the give and take. Recently though I see a resurgence in in the conversation in the omni market between the consumers and starting to see an increase in the virtual personalized service which leads me to believe that the retail marketplace is on the cusp of a return to the conversational commerce practice. I see the entry of the 5g wireless network capabilities and the growth of the unlimited data as two driving factors that will push this over the tipping point.




In the last few months I have experienced a semi-personalized retail experience with an online retailer that made me rethink the potential for conversational commerce in this omni marketplace with the growth and expansion of consumer utilization of technology. This online retailer uses a combination of email that was personalized based on the service and the potential sale and then continued follow-up using both personalized email with special offers and targeted text messages with special offers. These are not uncommon things by any means, however this retailer used the combinations of technologies to try to create a direct and personalized message. This made me think about the potential available from tools and technology in combinations to create direct and personalized messages to create a conversational shopping and sales experience.




The goal of the eCommerce retailer is the customer return and the ability to keep the customer on the site for a longer period of time. This goal is necessarily expanded for the omni market retailer to encourage the customer to not only return to the eCommerce site but also to return to the store for shopping and purchasing. This enticement to return is much greater when customer is engaged in a personalized conversation with the retailer that is continuously reaching out for reaction and interaction with the customer. This conversation requires a strategy plan to utilize the social networking tools, email and texting in a coordinated manner the engages the customer cohesively across the tools and the channels. This requires an increase in focused customer service human support to both identify and coordinate the conversation topics focused on individual customer shopping and purchasing habits. This is where the big data and AI technologies play a critical role to help the retailer identify the these conversation topics and then to track and revise the conversations based on the responses.




I see this conversational commerce as a coming major disrupter in the retail marketplace and the retailers that have been focused on AI and data analysis will be the retailers that are best prepared. This is another development that does not require a great deal for the initial entry, however the retailers that invest early in the technologies and participate in the early discovery aspects of the conversational commerce will be the retailers that thrive in the coming years. This will also be the retailers that are best prepared for the next wave of change and disruption.

Market Obsolescence

Obsolescence is a by product of the market experimentation that must be recognized, accepted and reconciled by the participants as a real an looming outcome of the drive to experiment within the market and especially the supply chain. Experimentation produces both new features and functionality to push the market forward and also elimination or obsolescence of existing or previous capabilities that are not longer necessary or relevant. This obsolescence must be accounted for in the process in order to ensure that the portfolio of services and capabilities remain current and provide value. This effort to specifically identify obsolescence is important to the vitality and support requirements for the market participants to eliminate the support for obsolete services and functionality. The continued support of obsolete services and capabilities will place a drag on the ability to experiment and move forward.





Every experiment will potentially create an obsolete process or function and this must be recognized and taken into account and planned as part of the process. The effort and impact to the business increases with each obsolete process or function that is not retired and eliminated. Elimination of the obsolete functions and services must be a key part of the experimentation process because of the overhead required for ongoing maintenance and support. Planned obsolescence is an important practice in the market from a maintenance and value perspective. The value of the improvements realized from experiments will be quickly overwhelmed if the obsolete functions and processes are not retired.





Planning and executing obsolete service retirement is not the fun, or sexy, part of the experimental improvements proces, however it is an important part of the process to ensure the function and service catalog is appropriately maintained and services and functions are bringing value. The costs of maintaining obsolete functions and services will quickly escalate to overwhelm benefits of the improvements realized from improvements realized through experimentation.





In addition to the increased maintenance and support costs, the obsolete functions and services also impact and delay the realization of improvements from experiments, in other words, working around obsolete functions impacts the complexity and delays the delivery of experiments because of the effort to work around the obsolete functions. Eliminating the obsolete functions improves the velocity of change through experimentation. Google is a great example of eliminating obsolete services and functions. They regularly announce the retirement of functions and services that have outlived their useful lifespan and the value added capabilities are provided through new services or functions that have been created as a result of experiments.





The challenge for many of the partners is recognizing and accepting the obsolescence of services, features and functionality and most importantly eliminating the obsolete items. This can be especially challenging when you are focused on responding to change in the market. This challenge must be rationalized and prioritized through the realization of the potential impact to the partner in the event that the obsolescence is ignored. The weight of obsolete services, features and functionality will become overwhelming in the event that they are not retired and this challenge comes down to the focus; it is too easy to walk away and ignore because of the demands of the changing market.

Market Experimentation

It is abundantly clear from the industry leader practices that a key aspect of success is the practice of experimentation. This practice has become necessary to confirm demands of the consumer and other partners within the extended supply chain. Data and analytics will take you so far in responding to the demands of the marketplace and then the final clarification and confirmation requires experimentation as part of the continuous improvement process. In fact, the experimentation is a critical piece of the continuous improvement process and these leaders in industry are extending the continuous improvement practice to the the business decision process. This is an important factor in the ability to sense and respond to changing demands, the reaction to change must utilize the continuous improvement process to test validity of process and change in meeting the market demands.




The growth and importance of experimentation in clarification and implementation of change is a reaction to both the velocity of change and the almost overwhelming cost of bad decisions in the model of increased velocity of change. There are really two factors involved in the increase in experimentation:


The velocity of change and the amount of data available to help the market to sense and respond to change is increasing. First the velocity of change has reached a tempo of discontinuous velocity that requires continuous evaluation and re-evaluation. While the volume of data available has increased exponentially with the growth of omni channel commerce the analytics can take you so far and then the final steps require a series of trial and error experiments.


The cost of change has increased to a level that almost prohibits very large change. This means that the change must be coordinated and executed in steps that allow for validation and corrections prior as part of the change delivery cycle.

These are important factors to encourage and expand the level of experimentation.




When the market partners reach of level of capabilities to segregate the back office planning and forecasting and financial systems from the customer and partner facing capabilities to allow for change in the customer and partner facing applications to be implemented efficiently and without significant change to the back office operations then the model of experimentation can really take the center stage. This takes significant investment from the retailers and an especially large investment from the larger retailers. Unfortunately for the retailers, they must perform both activities at the same time in order to continue to succeed. Amazon and Google both excel at these activities as they have built the foundation with the concept of integration and segregation to reduce effort and impact of change on their back office and both us experimentation as a foundation function in their activities.




One of the lasting effects from Amazon is their practice of experimentation and willingness to drop a concept when it does not succeed. This impact of this practice is the market of discontinuous change and increased velocity of change. Others must also embrace this practice now in order to survive and this can be very tough for the large retailers. The initial reaction was to acquire operational capabilities and now these retailers much change their culture and framework to support quick an iterative change to react to the demands of the market.

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.

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.

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.

Predictive Analytics In Omni Market

Retailers and their supply chain partners including carriers, manufacturers and other service providers have come into a treasure trove of data for analytics and the challenge is using this data to guide their interactions with consumers and other supply chain partners to improve the retail omni market shopping and purchasing. The wireless and network capabilities provide these partners and retailers with a great deal more data than was available from the brick and mortar outlet only and they are taking advantage of this information in many ways to improve consumer shopping and also the products and services offered to consumers. Combine the data available with the connectivity of the collaborative network and the consumers have the opportunity now to collaboration with the retail market as a whole to transform the way that consumers interact with the marketplace.




You see the reactions from the data analytics now in every outlet that interacts with consumers, from delivery services supported by the individual retailers to the final mile delivery customization now offered from UPS and FedEx. These services will start to expand across multiple partners with the expansion of the collaborative marketplace. This is the next frontier really, to socialize teh predictive analytics to put together combinations of services and offerings crossing the entire marketplace. All partners in the marketplace should be building the social network capabilities to allow theme to fully utilize the data and improve the support and interactions with the consumer.




The marketplace now is made up of a series and groups of partners that support different aspects of the consumer shopping experience. This is changing and flattening the relationships across the network that creates a flat social network with the center being the consumer and the network being the partners supporting the individual consumers shopping experience at that point in time. The partners in the marketplace must use data collected from consumers utilizing predictive analytics practices to determine the types of goods and services that will support the consumer demands at that point in time. This means that the collaborative network is critical to the marketplace to meet these needs.




This end result of this transformation of consumer shopping and the marketplace is that there is no single partner in the network that can support all the needs of the consumer and that the goods and services must have the capability to be put together at the point in time of the consumer shopping. This calls out the importance of the collaborative network to support the consumer demands across retailers, suppliers, carriers and specialized service providers. Another important point of this observance is both the importance and the benefits of retailers participating in the collaborative network and the benefits to the retailer of this network. The collaborative network allows the retailer to focus on the activities that differentiate them from others and utilize the collaborative network to support the standardized processes and procedures. This is extremely important for retailers, and especially the large retailers, because they can then focus on the data collected to support refinements and improvements in predictive analytics.