Leadership Response

The case company supply chain leadership developed remediation strategies for three main focus areas: Data Quality, Technology, and Talent/ Organizational Capability.

Data Quality and Integration

This set of workstreams was intended to improve the data governance, quality, and accessibility of data and information from a variety of disparate sources. A solution that would allow for access to disaggregated legacy data, mapping it to a data lake and applying data quality analytics to improve alignment will be critical. Creating a mechanism to provision data to company analyst and data scientists is also needed. A key outcome of the data quality initiatives is to improve forecasting capabilities. Forecast accuracy improvements were viewed to have very high business impact to this firm as surprise orders had the potential to wreak havoc on large batch production schedules.

Technology Efforts

A separate but related effort the firm initiated was to develop and implement strategies for Internet of Things (IoT) sensor-based data, as well as develop and deploy better process control automation. Given the particular type of products this case firm manufactured, supply chain leaders felt that developing capabilities with IoT sensor technology might yield significant digital supply chain performance improvements. Ideas that were floated were as follows:

IoT sensors on bulk chemical freight to keep track of inventory in transit. IoT sensors placed on customer owned bulk chemical storage tanks to monitor inventory levels and calculate usage statistics, also to help in replenishment forecasting and manufacturing runs. Ideas were also floated about improving process control automation to improve manufacturing yields for batch chemical production processes. Waste reduction and the reduction of lead times and fewer changeovers were cited as possible benefits.

Talent and Organizational Efforts

The case firm recognized that it did not have enough talent and capability on hand to activate some of its digital supply chain strategies. Process control automation problems, in particular, seemed to require an ability to solve complex mathematical problems, something beyond the skill sets of the supply chain staff, and even some of the engineers in the firm. The case company began to develop relationships with doctoral programs in local universities and engaged promising PhD mathematics students in joint efforts to share data sources and collaboratively work to solve complex issues. It also began to assign its recruiters certain kinds of supply chain problems through research projects, rather than search for skills, recruiters had defined problems with which to attract and recruit expertise. One of the challenges the firm faced was developing a recruitment strategy that was appealing to highly skilled data scientists. Being an older manufacturing-oriented brand, the firm suffered a disadvantage in recruiting talent compared with its more up to date digital native companies.

For the talent the company did have to work with, agile crossfunctional scrum teams were developed that were focused on issues of data integration, as well as decision processes for prioritizing projects for digital automation.

Digital Supply Chain Case Questions

  • 1. What are some of the challenges associated with digital supply chain transformation for business conglomerates?
  • 2. Do you think the firm’s legacy organization creates a unique set of challenges in its digital supply chain transformation?
  • 3. What sorts of challenges do you think the firm will encounter as it attempts to implement some of its technology strategies like IoT sensors?
  • 4. How common do you think it is to have a risk averse culture in organizations like the case company? What can be done from a leadership perspective to help change culture and reduce cultural barriers to implementing digital supply chain strategies?
  • 5. Can this firm afford to defer it shift to a more digitally integrated organization?
  • 6. How would you decide where to start in developing digital transformation plans? Do you think the case firm has done a good job of prioritizing its efforts?
  • 7. What about more consumer facing businesses, like home improvement products? How would the case firm go about developing plans for those segments and sectors? Do you think they would be a lot different than efforts required for the industrial chemical division?
  • 8. What are some examples of competitive threats that the case firm should be aware of? What kinds of digital supply chain strategies might they be competing with?
  • 9. How do you think the company’s marketing and sales departments differ from those of other industries and markets?
  • 10. Are there potential risks inherent in the digital supply chain strategies outlined by this firm? If you do think there are risks, what are they and why do you think they might be causes for concern?

Summary

  • • Risk management in the digital supply chain is more critical than ever due to the changing nature of the supply chain itself. A digital supply chain is inherently more complex and data intensive. It is also highly dependent upon shared activities as it becomes more integrated, collaborative, and end-to-end.
  • • Two factors illustrate the new risk environment for supply chain leaders, an increase in data complexity, and a commensurate increase in data connectedness. Data complexity is the result of the large amounts of data from a wide variety of sources now being utilized to power new business models. Data connectedness is driven by the increasing degree to which data are shared both inside as well as outside the firm.
  • • In addition to data issues, the number and variety of business and compliance risks are increasing. Business performance risks include quality issues, On-Time-In-Full targets, pricing pressures, credit impacts, supplier dependencies, political disruptions, and now pandemics.
  • • Compliance and regulatory risks vary by region and include labor issues, environmental, health and safety, human trafficking, data privacy, intellectual property protections, and cyber security.

To become a more mature risk managed supply chain, leaders should focus on developing their firm’s risk management culture, increase their use of data analytics to reduce risks, placing a special focus on cybersecurity and data protection, and becoming more selective in managing specific risks.

Notes

1 https://news.sap.com/2019/03/bumble-bee-foods-sap-create-blockchain-track-fish/

References

Dolgui, A., Ivanov, D., 5c Sokolov, B. (2018). Ripple effect in the supply chain: an analysis and recent literature. International Journal of Production Research, Taylor Francis, Leading scholars in Production Research, 56(1-2), 414-430.

Digital Supply Chain Institute (DSCI). (2017). Digital supply chain transformation guide: Essential metrics [white paper]. Center for Global Enterprise, https:// www.dscinstitute.org/assets/documents/Digital-Supply-Chain-Transformation- Guide-Essential-Metrics_DSCI_Oct2.pdf

Duhadway, S., Carnovale, S., 5c Каппа, V. (2018), Organizational communication and individual Behavior: Implications for Supply Chain Risk Management. Journal of Supply Chain Management, 54(4), 3-19.

Korpela, K., Hallikas, J., 5c Dahlberg, T. (2017). Digital supply chain transformation toward blockchain integration. Proceedings of the 50th Flawaii International Conference on System Sciences, 2017. https://doi.org/10.24251/ hicss.2017.506

Kshetri, N. (2018). Blockchain’s roles in meeting key supply chain management objectives. International Journal of Information Management, 39, 80-89.

Lu, G., Koufteros, X., Talluri, S., 5c Hult, G. T. (2019). Deployment of supply chain security practices: Antecedents and consequences. Decision Sciences, Decision Sciences Institute, 50(3), 459-497.

Moss, C. (2020, July 9). Risk management in the digital supply chain [Conference presentation!. Digital Supply Chain Institute. Leading the Digital Supply Chain Program, Zoom Presentation, United States.

 
Source
< Prev   CONTENTS   Source   Next >