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.

Manage Disruption Through Process Automation

  

In order to manage disruption it is important to focus, focus is the key to success for all strategic initiatives and programs. The challenge then becomes overcoming the day-to-day priorities and challenges that seem to continually interrupt your focus and energy. It seems to me the challenge is to define a process and incorporate tools that allow you to reduce distractions from interruptions and I see the perfect tool for this challenge to be Robotic Process Automation. Process automation capabilities has reached broad acceptance and usage to support mundane tasks in the operation and customer facing activities. This same capability and utilization can also be extremely important in the leadership suite to help maintain focus is a robust Dynamic Risk Sense and Respond program.

A key responsibility of senior leadership in any organization is the development and execution of business strategy. Business strategy is the single most valued role of leadership and two things are continuously fighting to distract leadership from this responsibility:

Most significant is disruption in the business or the market. This year has provided not just several major disruptions but waves of ‘complimentary’ disruptions adding to the impact that are being driven by events from the impact of COVID-19, to environmental disruptions such as fires and now hurricane season.

Distractions to the day to day operation that in many cases are driven by aftershocks from major disruptions. Distractions can be just as impactful to the development and execution of strategies.

We are in times of VUCA and this requires focus and determination to sense and respond to disruption in a cohesive manner that enhances business strategy rather than disrupting the business strategy. The goal of senior leadership during these times must focus on limiting distractions so that leadership can remain focused on the business strategy rather than day to day operation and continuous reaction to distractions. The challenge now is to define and understand the distractions so that a response can be quickly. This is where RPA can help leadership to identify and understand the distraction so that it can be addressed with a predetermined response.

Senior leadership can be overwhelmed by the waves of day-to-day challenges and tasks and especially during the COVID-19 pandemic the related recovery plans and activities. This focus on day-to-day becomes a drain on focus that quickly slows the strategy activities and plans that effect the long term success and survival of companies. Many of these challenges and tasks may drive change into strategic plans and because of this they cannot be ignored, however RPA provides a means to identify events and disruption that may impact strategy and warrant analysis.

RPA would allow the monitoring of these many day-to-day challenges and interruptions using process and analytics for an early warning system to define and even identify potential responses to the daily challenges and priorities. This would allow leadership to maintain a greater focus on the higher value objectives of your Dynamic Risk Sense and Respond program. 

 Additional benefits to a robust RPA plan include:

1. Utilization of a robust RPA program shows senior leadership commitment and support to a program that adds value at all levels
2. Provides the senior leadership team the opportunity to understand, first hand, the potential of RPA
3. Encourage senior leadership team to evangelize RPA initiatives providing personal experience as examples
4. Expansion of business dashboards that support alerts and views based on current events and defined alert levels
5. Promotes ability to focus on value add objectives and strategy

Focus may be one of the most significant benefits of RPA from a business and market perspective. I am beginning to think that one of the best and most efficient ways to demonstrate value is to increase the focus on automating repetitive tasks and activities performed by senior leadership. We see hundreds of examples and discussions on the benefit of automating repetitive processes and tasks from an operational and customer support perspective and I suggest adding senior leadership tasks and activities to this list.

Senior leadership can be overwhelmed by the waves of day-to-day challenges and tasks and especially during the COVID-19 recovery plans and activities. This focus on day-to-day challenges becomes a drain on focus that quickly slows the strategy activities and plans that effect the long term success and survival of companies, or worse lack of focus and review on current strategies risks implementing an incorrect or ineffective strategy. It seems to me that in order for the process automation trends and especially RPA trends to really push to the tipping point requires a commitment at all levels to the capabilities and the benefits of the RPA capabilities. What better way to display understanding and commitment than to incorporate and expand RPA into the executive suite. This is an important capability that could truly change the focus to allow and encourage more forward view.

A successful RPA strategy must focus on the process and must be viewed as a journey in this example of distraction management. This is because it is difficult to define potential distractions and the response automation in many cases requires refinement in order to truly complete the automation. This continuous refinement process however is one of the RPA 'super powers', RPA allows for quick iterative refinement that supports the necessary enhancements to refine response to the challenge and the distractions.

What does this mean and how can it be delivered? As with all initiatives we must start with the 'what' before we determine the 'how'.

This process automation initiative must start with a clear strategy that defines the first most critical deliverables and then as part of the continuous improvement process that is integral to the success of the process automation initiative the next step is to validate the success of the deliverables and second to confirm and refine the process automation strategy for the next steps. The key to the executive suite adoption is to define the business critical success factors and meaningful alerts that will support the business management at the senior executive level.

It is important to follow this process with the executive suite in order to demonstrate the value and the inherent importance of the process automation movement. It is also important from another perspective - to demonstrate the level of commitment from the executive suite to the organization. It seems to me that in order for the process automation trends and especially RPA trends to really push over the tipping point requires a commitment at all levels to the capabilities and the benefits of the RPA capabilities. What better way to display understanding and commitment than to incorporate and expand RPA into the executive suite.

This is an important capability that could truly change the focus to allow and encourage more forward view.


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.

Benefits From COVID-19 Disruption In The Supply Chain

With each significant disruption in the supply chain and in the global market our supply chain practice and procedures must perform a lessons learned exercise to identify the areas of successful response and areas for improvement. I know it sounds counterintuitive to call out benefits however every event should be evaluated to identify areas of success and improvement. There have been areas of success in the supply chain, especially in the way that the entire supply chain reacted to the disruptions in both product types and manufacturing. There are also many areas for improvement and most importantly this pandemic has identified significant weak areas in the global supply chain. The challenge now is to look back to evaluate the disruptions to determine improvements to incorporate in both sensing and responding to the disruption.

First let me call out that I believe the disruptions in the global supply chain are the result of poor risk analysis and business continuity responses to disruption. The overarching answer is not moving the supply to local manufacturing but to implement improvements in the process and procedures for sense and response to disruption. We know that the impact of a pandemic can and should be defined and practiced, while we can’t tell the exact nature of a pandemic, we can plan for a pandemic response. We also know that the global supply chain has grown and developed as a result of the global market demands on the supply and there is no easy answer to the challenge, especially moving manufacturing locally!

We have learned some key findings from this regarding the importance of the response to the disruption that could reduce the impact in the future. These are the factors that must be documented and a process implemented to review the market conditions on a regular basis. I believe that we have let the supply chain become fragile and brittle as a result of a focus on cost only. One learning or benefit from the experience is the need to plan for disruption of many types and combinations to improve supply chain resiliency. There are two factors that improve the resiliency of the supply chain;

Risk and response analysis is critical to the successful response to any disruption. This is a complex exercise because it requires imagination to identify the potential risk and then another type of imagination to define the response to the disruption. This is a major area of improvement.

Supply chain partner collaboration is another critical success factor to the response to any disruption. We have seen improvements in supply chain partner collaboration recently, however it has not been nearly fast enough, nor far enough. The supply chain is just that a chain of links from partner to partner that must work together to successfully support the market. The supply chain activities have met the challenge of the global market, however, the partners have refrained from extending and growing the collaboration that is necessary to react to significant disruption.

The future success of the global supply chain is based on the ability to quickly sense and respond to disruption, and more importantly multiple combinations of disruption. This is where process automation and analytics come into play. This is also the same areas showing dramatic increases in interest and expanded implementation. We must be careful in our response and strategic planning that we focus on flexibility and resilience when developing our strategic plan and reactions to the multiple disruptions. We have the process in place for the process automation and this has become critical to the response to the disruption. We must now develop the analytics to allow us to sense the disruption before significant impact and define the potential responses to any disruption. The third point that cannot be shorted is expanding collaborative practices across the extended global supply chain to improve response and reaction time to the disruption.

What steps have you taken to evaluate your response to the pandemic and identify areas of improvement?

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.

Risk Scenario Analysis

Risk scenario analysis requires imagination and most importantly collaborative brainstorming in order to identify all risks, even and especially risks that today seem outlandish. As an example, I would have never considered Amazon stopping non-essential product shipments but this is exactly what was enacted as a response to this pandemic. One of the consequences of this action has been a significant impact on small businesses that utilize Amazon for their warehouse and order filling support. This in-tern impacted the success of a great deal of small businesses that were dependant on the Amazon fulfillment services which impacted the livelihood of many employees along with the success of the small business. This then fed into the overall economic impact from the pandemic. This is a great example of the relationships and overall impact of seemingly unrelated decisions on a wide range of people and businesses.

The above example is the key reason why it is so important to perform robust risk scenario analysis. In the example above the impacted businesses now must evaluate the risk of the fulfillment disruption and how they can react to this disruption to support their business. Business must develop a strategic risk management process that views scenarios for any and all risk to the business. Starting in the beginning of this yea the waves of disruption experienced to date have shown that you cannot eliminate a risk because it will never happen. We have gone through a series of disruptions that previously were simply unimaginable as a real risk and so there were no response strategies developed.

The first step is to identify and fully document the risk scenario. This means that the risk scenario must not only identify the potential risk, it must also identify the potential impact to the market and also the business. The definition of the risk is not complete though until you have identified and documented how to sense the risk so that you can execute your planned response. This means that you should identify and document 'outlandish' risks as well as generally accepted risks. The outlandish risk may never materialize however it is important to call out the scenario so that you can take steps to minimize the potential as well as prepare for the realization of the risk.

This is an important point - one of the objectives of the strategic risk analysis and a key outcome are steps that can be taken that will minimize the potential for the risk. This is a concept that needs to become a focus of every risk mitigation strategy because the best way to react to a risk is to eliminate the cause of the risk. Simply defining the risk and the potential impact to the market in general and your business specifically will help to identify how to sense the risk. This exercise of risk identification and early recognition will provide the framework to define the steps necessary to eliminate the risk from occurring.

Risk scenario analysis and mitigation has always been an important aspect of project planning and management. We must institute this same practice now in the supply chain management and business continuity process. As a result of the rate and impact of disruption hitting the market and businesses we must recognize that risk analysis can no longer be viewed as an inward facing exercise. As a result of the disruptions hitting this year we must finally recognize that business continuity must be and outward facing strategy that recognizes early the factors developing of the disruption and takes steps to mitigate and avert major impact.

Tom Brouillette

Contact: tbrouillette@ncspartners.com

@ncspartners

Strategic Risk Management To Counter VUCA

Hope For The Best And Plan For The Worst should be a consistent and shared mantra for all businesses as a means to focus on strategic risk management. The importance of this has increased to the highest level as a result of the COVID-19 pandemic and the activities to both recover and prepare for the next disruption. This requires a significant investment in strategic risk mitigation definition and development and must include partner risk management in the scenario development and risk mitigation strategy. This includes all partners and integrations in the extended supply chain. The weakest link in the supply chain will continuously change depending on the type of disruption and your strategic risk scenarios must be developed to define a response for all scenarios.

One critical activity, or requirement, is implementing a regular risk scenario review process that evaluates the likelihood of scenarios and most importantly, new scenarios. As we have seen from the many disruptions experienced so far this year risk scenarios and potential changes continuously with new risks rising and other risks declining and disappearing. You will never in a million years be able to identify all risks, and the point is that a regular review process provides the means to review so that you can add and remove scenarios as necessary.

The next activity is developing and implementing the appropriate data analytics capabilities that will support the ability to sense the reactions to disruptions and most importantly, the reaction to combinations of disruptions. The risk scenarios must identify the reactions to combinations of disruptions and then you must have a means to measure the responses. This is where data analytics comes into play, along with a healthy helping of imagination. Different disruptions and combinations of disruptions will cause different reactions in the supply chain and these reactions must be identified quickly in order to determine the appropriate response. The risk scenario identification and evaluation is important but it is based on assumptions and personal viewpoints of the team that developed the scenarios. Data analytics brings the facts to the table to help to determine the appropriate response.

The glue that connects these processes and activities is imagination. Risk scenarios require imagination to create, risk response exercises require imagination to develop, data analytics requires imagination to develop the queries and identify the appropriate data and source to identify the reaction to the disruption and then to validate the effectiveness of the response. As you can imagine, this is not a ‘once-and-done’ exercise. This requires continuous review and evaluation in order to grow and evolve with the market and the supply chain. Each disruption and reaction to the disruption creates a new reality stream that changes scenarios and potential for disruption and it is important to continuously evaluate and develop new scenarios.

Data analytics is a very nebulous practice that requires continuous experimentation and evaluation to validate assumptions. The data analytics initially produces the outcome reaction to disruption and combinations. This is only the start, however, because after identification of the outcome you must then try to trace back the results through the responses and combination of responses if you want to tie them back to a particular disruption. I’m not sure that it is critical to tie everything back to a specific disruption though. The point of this whole exercise is to identify a reaction to mitigate the specific business disruption that has occurred and this should be the initial focus. After the mitigation exercise you will need to go back and evaluate the actions that resulted in the disruption on another day.

Tom Brouillette

Contact: tbrouillette@ncspartners.com

@ncspartners

COVID-19 Crashed Into The Economy

Covid-19 crashed into the economy causing supply and demand side disruption that continues to ripple through the supply chain impacting planning and forecasting in addition to transportation, storage and manufacturing disruption. This disruption requires robust data analytics to sense and respond to the dynamic changes that ripple through the economy. The challenge and first priority is developing the capabilities based on a robust data analytics business intelligence model to sense and respond early to risk so that the impact of the continuously changing disruption. This challenge requires a great deal of imagination and focus in order to develop the tools and framework that is both robust and flexible to respond to the disruption.

This is not a single event, it is a significant event in a series of events that will continue to impact the economy and as a result the extended supply chain into the future. This fundamentally changes your business continuity planning requirements to include a larger number of scenarios and combinations of scenarios in order to manage the risk. In addition to the expansion of risk scenarios this also requires more frequent reviews and most importantly - data analytics to sense the disruption early in the life cycle. This combination of additional and improved strategic business risk scenario evaluation and improved analytics to sense the disruption are key to successful response to limit the impact of the disruption.

We have reached the point now in the global market where these capabilities are critical not to the success of your organization but they are now a critical factor in the survival of your organization! The current situation is a perfect example of how risk is driven by multiple events to disrupt. In the last year we have experienced severe climate related events such as wildfires, hurricanes and tornadoes that impact the market and product demands Then add to this the US / China trade war that initiated the manufacturing shift from China to other Asia Pacific countries. Then before the trade war settled the pandemic crashed into the market first impacting manufacturing and flowing through a shut down of the world economy.

All of these factors come together for a 500 year disruption that must be resolved. We must reset our scope and risk management though to plan for the 500 year disruption continuously. In a global market there are so many factors that influence change and disruption along with the impact of the disruption. These factors change with the season and the relationship and impact of the combination of factors require a focused risk scenario strategy in order to sense the factor early so that the response can be identified to limit the disruption.

It is no longer acceptable to react to the disruption after the fact. The disruptions are coming too quickly and more importantly the disruption builds on previous factors and disruption to create new impacts. Your organization will not be able to survive unless you implement a risk management sense and response strategy that is frequently reviewed and revised for new scenarios and responses. The good news is that the tools are available now to support this initiative and only require the focus and priority to develop and monitor the strategy.

COVID-19 Requires Optionized Supply Chain

I have been discussing supply chain disruption for quite a while now as it relates to consumer demands and natural events such as destructive weather. The COVID-19 pandemic now adds a new and even more real, and more serious, disruption that must be addressed. The key underlying challenge is how to address disruption and especially extreme disruption. We have already entered into a time of extreme discontinuous disruption that demands and absolutely requires immediate response to survive and support the demands created from the disruption. We can no longer ignore the disruption cycle and as a result must focus now on an optionized supply chain rather than an optimized supply chain so the response can be supported through pre-planned actions. The critical requirement is to continue the supply chain and minimize disruption through a robust risk sense and respond strategy. This risk management strategy must become a critical aspect to the supply chain management overarching strategic plan.

The global supply chain is a fact of life now and as a result of the length of time this supply chain has been developing, it is now the norm. Frankly, it would require an unreasonable length of time and money to change, and most importantly, the cost would never be recovered. We must look past the angry demands to move manufacturing ‘back to the US’ and instead take a more reasonable approach to accept and plan for disruption and then develop options and practices to quickly and efficiently adjust to disruption. This means adding an enhanced risk analysis and risk management strategy to the supply chain planning and forecasting tool kit. We must now focus on disruption scenario planning and response option development to ensure that we are able to minimize the impact to the supply chain.

The good news is that we already have practices and tools available to enable disruption options risk analysis and determination. The current state of supply chain software with the addition of big data analytics provides the framework for a robust early risk warning capability to allow implementation of options to address the disruption. We must develop the strategy now utilizing the framework of available tools to support the process. The result of this initiative will be a framework of process and procedures that will allow the extended supply chain partners to sense and respond to disruption based on scenarios and options that have been identified previously.

The challenge with implementing the disruption sense and respond risk analysis framework is not the supply chain management tools. These tools are quite robust and provide the capabilities to adjust quickly and efficiently to the disruptions in a truly efficient manner. These tools over the years have progressed to a state of flexibility in configuration capabilities that is truly quite amazing. The flexibility and configurability has been built into the software to allow a super user to support standard and general maintenance requirements without support of an engineer or software developer. These configuration capabilities I believe are quite capable to support the demands of the ‘optionized’ supply chain to support the risk sense and response framework.

The challenge now from a technology perspective is related to sensing and identification of the risk in a timeframe that allows the supply chain to identify and then implement the appropriate configuration options to manage and flourish during and (most importantly) after, the disruption event. Fortunately, big data and analytics has reached a state that is beginning to support the requirements to sense and determine how to respond to the disruption based on a predetermined business continuity plan. The analytics requires an efficient tool in order to bring the data together from disparate sources into a pool where the analytics can be utilized. This is one of the new continuing supply chain management requirements.

This leads to the next challenge which is to define a robust and flexible business continuity plan that provides suggestions for predetermined options based on the type of disruption. This business continuity plan takes on new meaning and also new use in the supply chain. This plan must be extended first to identify any type of business and supply chain disruption that may occur and then identify the potential for the disruption (risk) along with configuration options to react and adjust to the disruption. In my experience, the business continuity plan has been reviewed at a minimum and normally on an annual basis. The review process must be more rigorous and reviewed more frequently in order to provide the flexibility and direction required to address disruption.

I suggest a two-pronged focus on the review of the business continuity plan to extend the types of disruption and the potential impact along with identification and implementation of a data analytics tool that supports efficient and flexible identification of disruption early. It is most important to identify the potential for disruption so that you can react early and adjust to address the disruption prior to serious supply chain impact. The key focus must be the big data analytics in order to sense and respond to the disruption. Disruption is a way of life now, it is critical to manage the disruption in a way that limits the supply chain disruption.

Tom Brouillette

Contact: tbrouillette@ncspartners.com



@ncspartners

Supply Chain Strategy For COVID-19 VUCA

While the COVID-19 pandemic is certainly the most significant disruption that the world is facing, it is by no means the only disruption the world and especially the supply chain is facing.  In fact, the level of VUCA (Volatility, Uncertainty, Complexity and Ambiguity) has increased over the last 5 - 8 years through a series of natural disasters, political unrest and most recently of course the pandemic.  What we must learn is not how to address specific disruption events, we must instead develop a strategic plan that identifies potential disruption events that may or may not occur and then identify potential responses that can be selected singly or grouped to respond to the disruption.  

This VUCA response strategy is simply a more robust business continuity plan.  This is dramatically over-simplified, I understand, however what I am focused on is the definition of continuity which has been an established practice for a long time.  This VUCA response strategy requires a more robust process that defines every type of response for every type of disruption that would then be reviewed on a regular basis to validate and update.  This enhanced response strategy must be incorporated as part of the regular continuous improvement process to analyze not only potential process improvement but also potential disruption.  The risk analysis must become part of the regular process for the business and especially the supply chain to allow for a well thought out response that will reduce the impact of the disruption.

I know that many think - how can you evaluate potential risk of a disruption such as a pandemic?  The evaluation is not based on any specific type of risk, it is based on potential impact if and when any service, supplier (especially raw materials or parts suppliers in manufacturing), transportation partner or customer is suddenly shut down.  Another very critical aspect to the risk analysis is the impact sudden changes in package quantity when specific areas of demand are impacted.  For instance, when institutional demand dried up as a result fo COVID-19 and dairy farmers were forced to discard milk.  The risk analysis and continuity planning must focus on the areas of impact and not the impact event in order to be effective and support the needs of your business. 

The continuity analysis and planning must be planned and executed as a continuous process that is reviewed on a quarterly basis and the events that can impact the business must then be reviewed to confirm that the potential impacts are still valid and also review and the response is still valid and most importantly, the triggering events analysis and review process is still valid.  With the increase in business threatening disruptions it is critical to get ahead of the events as much as possible so that the reaction to the event can be triggered in a time frame that will control and limit the impact of the disruption.  The best time to plan for the response to a disruption is before the disruption occurs!

We have entered into a time of VUCA that will continue to impact professional practices and capabilities and then this will carry over into the personal side as well.  Everything is connected and there is a ripple effect across industries that must be anticipated.  It is no longer acceptable to say - who would have expected this type of disruption?  We all must be prepared for disruption of any kind that may occur and then have a response planned and ready to implement.

COVID-19 Disruption Demands Supply Chain Elasticity

The time to react to an extreme disruption such as the COVID-19 pandemic is not when the pandemic is imminent, or in the midst of the pandemic. The time to react is before the pandemic, or the disruption event, to prepare reactions based on the potential. This enables your organization to identify and evaluate potential reactions prior to the event and this dramatically reduces reaction and also ensures appropriate and effective reaction. Reaction to a disruption requires elasticity in the process and the organization in order to bend and stretch rather than break. Reaction to disruption also requires the ability to sense the disruption in time to react.

Recently there is a great deal of bluster focused on the dangers of the global supply chain that suggests the only way to eliminate the risk is to move manufacturing back to the US. This sounds great in a sound bite but is really not feasible and would never move forward. There are a few significant challenges to moving manufacturing back to the US starting with the challenge of an increased cost resulting from

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. The other challenge is the people and manufacturing capacity that would be required to meet the consumer demand.

The appropriate solution involves a flexible and nimble global supply chain that incorporates backup and alternative options for both raw materials, manufacturing plants and even transport options to reduce the risk of disruption. The issue is not a global supply chain, the issue is the deficient risk identification and mitigation to react and address disruption. This requires a focus on analysis and reaction to respond and resolve the disruption. The supply chain must be able to react to difficult situations and conditions best described as VUCA (Volatility, Uncertainty, Complexity and Ambiguity) that requires the continuous ability to sense and react to disruption as it materializes.

As an industry we have implemented the process and the tools to respond to disruptions to ensure business continuity and now the use of these tools must be extended in order to react to the VUCA earlier in order to limit the business disruption. The challenge for the industry is the early planning and preparation for VUCA events so the reaction can be predetermined and practiced so the disruption can be limited. This requires robust tools and capabilities to sense the disruption earlier to allow time to implement the business continuity procedures.

The business continuity procedures must be predefined and practiced regularly so that they can be executed quickly and efficiently in response when the disruption is identified. This is standard operating procedures for businesses in the supply chain. One of the new factors to this continuing challenge is the types of disruption and the ‘surprise’ of the disruption. I think sensing and responding to VUCA must be the key starting point to business continuity. The definition of business disruption must be expanded to focus on VUCA and the analytics must be improved. The business continuity is not all or nothing and should be viewed as modules that should be engaged depending on the situation.

We must accept the fact that we have entered a time of extreme disruption and must focus on the ability to sense the disruption and quickly implement the response to the disruption. This means the business continuity procedures must be extended to be utilized in response more efficiently to the disruption. The first step though is focus on sensing the disruption! This is where tools and technology will play a key role, including advanced analytics and artificial intelligence and even process automation.

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.

Robotic Process Automation And You

Robotic process automation is a capability segment that is growing quickly in large part because of the speed in which it can be delivered with limited risk. This is a natural progression to the growing autonomous automation capabilities including robotics. This next logical step of business process improvements combines business process analysis and improvements with software robots identified and driven by artificial intelligence tools and workers. Combine the potential benefits with the limited risk and the robotic process automation provides a very alluring opportunity to quickly add benefits and efficiencies to processes in the operation.



The challenge in the operation is continuous pressure on improvements in efficiencies; to do more work with less human interaction. Unfortunately for the operation, and logistics in the supply chain, robotic implementation can be very disruptive because of the dramatic change to the operation. This is where robotic process automation can bring value to automate the existing process without dramatic disruption. This will provide the opportunity to improve efficiencies while the disruptive projects can be implemented. In fact, I would suggest that robotic process automation be viewed as the first step in a robotic strategy because it provides the first step to proving the automation.



Within the operation the greatest disruption is brought about by the dramatic and sudden change that is demonstrated by physical robotic implementation in the warehouse operations. Robotics not only disrupt the operation and the process and flow of people and operations, it also disrupts the physical layout of the warehouse resulting from the robotics implementation. While there have been dramatic increases in efficiencies, volume and accuracy this must be tempered, initially at least, with the disruption in the warehouse. Don’t get me wrong, I’m a strong advocate of automation to improve the operation, I am only saying you must go into this with eyes wide open to understand and plan for the holistic impact to the operations.



Robotic process automation allows for a trial at increased automation to improve the efficiencies of the operation without dramatic change. This is a benefit not only to the operation, it is also a benefits strategic planning by providing a point of validation for the automation. This is a critical benefit because of the investment required for increased automation with autonomous robotics. The resulting increased efficiencies delivered by robotic process automation allow for a refocus by the operation to more complicated processes that may be more difficult to automate or require autonomous robotic automation.



Automation is a multi-faceted opportunity for improvement and must be viewed as such in strategic planning and strategic initiatives. The organization and operation especially must evaluate options based on the process and automation opportunity, all processes will not achieve improvement from the same automation tool. This is why it is so important to implement a robust and forward thinking strategic planning process to help identify the improvements.



Automation is another flavor of process evaluation and improvement that brings a new set of tools to the toolbox. It must be remembered that these tools excel in different scenarios and situations and the strategic planning process must be a focus to incorporate these new tools as appropriate. This incorporation of new tools is critical to the long term success of an organization and especially now considering the velocity of disruption. There is no time to wait and see how others use the tools. The key to success is embracing a strategic process that experiments and looks toward incremental change to stay ahead of disruption. Disruption is the tipping point of incremental change, unfortunately it is tool late to react to disruption and best case scenario is creating your own disruption.

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.

Data Analytics And Artificial Intelligence Driving Disruption

One of the most critical capabilities to responding to change and disruption in the marketplace is the ability to sense the change in a manner and, most importantly, timeframe that allows a response to be identified and executed. The frequency and discontinuous nature of change rocking the market requires a robust process that takes into account as many factors as possible to identify the change. This process then must describe factors and relationships to allow them to be analyzed to develop the response. The difficulty lies in the volume of data, both new and old, that must be taken into account to first identify the change and second to guide in determining a response. This is where data analytics practices utilizing artificial intelligence comes into the equation to support the business.

The two challenges; data for analytics and the actual analytics require a thoughtful strategy and approach that will allow you to sense the demands from the market in both a manner and a timeframe that will meet the velocity of change requirements. These challenges go hand-in-hand as two sides of the same coin; you cannot sense the change without a great deal of data to analyze and you cannot analyze the amount of data without the artificial intelligence to process large amounts of data.

From the data perspective it is very fortunate that the big data tools and storage technology has advanced to the stage were the collection and maintenance of the data is no longer an issue. This allows the collection of vast amounts of data available from all points of the supply chain and especially from the eCommerce channels. This data along the supply chain can now easily be captured for detailed analysis and because of the volume of data available the results of the analytics can be more accurate and more informative of trends. The important point here is the collection of data from the viewpoint that the more data the better because you never know where the analysis will take you and in order to come to a conclusion you must have the data to analyze and also prove the concept.

Ten years ago, in the early growth stages of big data, the challenge was the ability to collect and store the amounts of data for analysis and the analytic query tools to quickly perform the analysis. This required careful review of the data available to select the appropriate elements that you believed were necessary to produce the analytic results. Then the data collection required over night collection and the analytics were run to produce large reports in a daily schedule. Everything took time and you had to be careful to analyze the expected outcome. Now though because of the dramatic improvements in the technology the process and results are much more robust and immediate. Now there is no concern about the amount of data and the queries themselves are also much more interactive.

The analytics of the data presents the challenge in this equation and this is where the focus should be placed now. Artificial intelligence tools really come into play from this perspective to provide a value add to the equation. Artificial intelligence and machine learning will be a baseline requirement to allow the market to sense and then determine how to respond to the changing demands. These tools will are necessary to first sense and understand the demands of the market and then these same tools will provide the means to analyze the potential solutions and even forecast the impact to the market of change.

The key benefit of these tools is the speed of analytical results and then combine that with the delivery speed of a solution. Speed of sensing the demand and then speed of response are the objectives that must be front and center for the market and the participants in the market. All indicators based on technology lead to increased speed of demands and resulting disruption in the market and market participants will not have the time required for any manual analysis of these trends. In addition, only failure will come from participants that wait for the market to deliver a solution that they can adopt.

The participants that embrace artificial intelligence combined with machine learning will be the players that succeed and prosper in the market. The rate of failure that we have seen in the market will only increase as the velocity of changing demands increase. The good news is the building block tools to quickly and efficiently sense and respond to the increased velocity of changing demands are already available. The bad news is that the market participants must embrace the tools to develop their own practices to use the tools.

Discontinuous Demands Of The Market

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

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

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

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

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

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

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

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

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

Artificial Intelligence - The Common Strategic Thread

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

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

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

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

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

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

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.