PREREQUISITES TO A DIGITALLY TRANSFORMED SUPPLY CHAIN

In the preceding article; Transforming Supply Chain through Digital alignment, we looked at four key Supply Chain management functions – namely; Procurement, Transportation Logistics, Manufacturing and Inventory management, and focused on how digitalization of these functions transform Supply Chain in general.

In this article, we proceed by talking about prerequisites that have to be in place, for these digitally transformed functions to interconnect, align and operate as one digitalized Supply Chain structure.

Prerequisites to a digitalized and transformed Supply Chain will include:

1. Culture conducive to digital transformation.

2. Leadership with skills to drive the transformation. 

Culture conducive to digital transformation

To digitally align and sustainably transform a business; Supply Chain from analog or manual to digital processes, an organizational culture conducive and welcoming to such a major transformation should be in place.

An organizational culture fundamentally describes the values and social-psychological atmosphere that define an organization. 

It mainly consists of; the environment, systems, attitude, behavior or shared beliefs senior managers or founders of the business/organization would have established and inculcated into the whole organization its workforce included. 

In this case, a culture anchored on behavior that is welcoming to progressive change – in this case being a digital transformation of Supply Chain, in pursuit of delivering optimum value to the customer, career growth for staff members and a lasting return on investment for the business. However, the truth must be told. In most instances, change can be challenging and unsettling, especially in the beginning.

Therefore, to create a culture that is welcoming and conducive to a major transformation let alone digital, management and employees have to go through orientation and training programs, so that they are adequately informed beforehand, of the positive impact the change would have on their careers, as well as the expected growth the transformation would bring to the company.

A workforce that understands the benefits a transformed Supply Chain would bring to individuals and the business as a whole is more motivated to wholeheartedly drive and deliver the change, and keep improving on it moving forward. 

A conducive environment for Supply Chain transformation will provide room for and embrace new skills, whether insourced or outsourced. For it would be understood by all that at the end of the day, it is for the benefit of the business and its stakeholders in general.

Given the economic devastation of COVID-19 has had on individuals and businesses globally, now is the time for companies to dismantle departmental barriers which perpetuate silo mentality, and install end-to-end transparent Supply Chain systems which usually improve collaboration hence, a conducive environment for digital transformation.

An atmosphere full mistrust, dishonesty, misalignment and lack of unity, can not appropriately transform.

Supply Chain transformation requires an operating system that is interconnected, visible and therefore, able to provide the impetus needed to tackle operational challenges and provide real-time data, especially on issues affecting customers.

Creating a progress-oriented atmosphere is vital for the ultimate creation of a well-aligned and digitally transformed Supply Chain. But first and foremost in this digital transformation journey is to have the right Leadership in place.

Leadership

The key to any significant change is Leadership.

For a digitally aligned Supply Chain to function as a coherent structure, it will require leaders who will be willing to be at the forefront of championing and managing the transformation.

Managers with the capacity to integrate new technology, existing culture and the workforce into a system that functions as one unit – towards a shared objective.

These ought to be inspiring leaders able to communicate and invoke excitement among members of staff, especially when explaining the benefits digital transformation would bring to the organization and members of staff in general.

In the process, making every member see the need, importance and value their contribution will have on the business progress or growth that would accompany the change. For example, to emphasize the importance of his employees, Jack Welsh, former Chairman and CEO of General Electric (GE), used to have a one-on-one with his staff. Where he would sketch the GE operations model on a piece of paper, then point out where the individual fits in. Highlighting the importance of the contribution made by every individual towards the overall success of the business. That is the type of a team leader, a systems thinker, who appreciates his employees and motivates them into giving their ultimate best. 

A visionary can inform and inspire his staff, by explaining where the company is, where/why it needs to go, the dots it needs to connect or milestones it should achieve, for its Supply Chain transformation to take hold and for the business to efficiently and cost-effectively get there.

A team-leader who by example fully embraces, integrates and drives the digital transformation across all Supply Chain functions. 

In some people, it is time to fully become accustomed to a major change. Therefore, a successful digital transformation will require empathetic leaders able to motivate and where necessary, provide support to staff members that may mentally or technically struggle to adapt and move with change.

Experiential Learning (EXL) is another approach to managing embedding change.  EXL is mainly about learning through hands-on experience. And with the necessary training, expert support and guidance, learning by doing is the best approach management can apply for their staff to better understand and grasp new operational systems. 

By ensuring that everyone is technically on board, it would be easier to usher in Supply Chain digital transformation steadily.

Cross-functional collaboration and process coordination are highly required in Supply Chain, more so during a major transformation process. 

A leader can not be everywhere at the same time. Therefore the ability to delegate through clear instructions will be a skill needed in a leader if functional alignment and digital transformation across the Supply Chain is to achieve. 

A knowledgeable leader who would recruit on merit and assemble a team of experts to supervise the digital transformation project.

Digitalized systems enhance the free flow of information between functions, and prevents intruders from tampering with data. Digital systems like Blockchain technology has already proved that they can neither be misinterpreted nor manipulated. 

Real-time end-to-end visibility is the ultimate goal of an effective Supply Chain. And digitization technology once collaboratively aligned and appropriately deployed, would transform and provide the needed transparency into the supply network. 

With social distancing now becoming the new global norm, digitalizing and remote controlling is the best option forward; hence, Supply Chain can not afford to lag behind. In fact, digitalizing supply chains is no longer an option for businesses, but a mandate if companies are to survive and thrive into the future. 

In all, the impact of digital transformation across the supply network is revolutionary.  Supply Chains need to be more responsive and strategically quick in their digital transformation.

Despite the large sums involved in transforming Supply Chains from manual/analog to digital, the long-term benefits are all worth it.

To compete on the global stage businesses will need Supply Chains that are aligned, agile, digitally inclined and resilient to disruption. Achieving this would require a shift in the mindset, culture, technology and Leadership.

In this case, business leaders capable of putting necessary prerequisites in place, then shifting; culture, people, and operational systems towards a digitalized Supply Chain that is well aligned and in sync with the strategic direction of the business.