The DSC Maturity Model for Leadership Actions

Here are some key principles to keep in mind as you embark on developing your particular set of digital business actions. First of all, your firm is not alone in this struggle to change and transform. The challenges you are facing are similar to the ones facing your competitors. Digital innovation is happening at an increasingly rapid pace and keeping up is not optional. There are risks to taking digital actions just as there are risks to inaction. In reviewing a three-horizon model for transformational business actions, the critical first step is to develop a strategy and begin the journey. The next steps in the growth horizon are to stay focused on the goals of creating hard-to-replicate integrated capabilities and to enable new business models that allow for the capture of previously inaccessible revenues. Our horizon three goals are to realize the strategic promise of the DSC and bring us full circle back to our premise

DSC Maturity Model for Leadership Actions

Figure 9.2 DSC Maturity Model for Leadership Actions.

in Chapter 3 by expanding in-text pareto performance to a level reflecting fewer trade-offs between costs and customer satisfaction. By achieving mastery over competitive threats while opening up your firm to new business opportunities, the role of the supply chain leader is ripe for elevation. The supply chain leader who transforms into a DSC leader elevates their role and that of the supply chain in the success of an organization.

Figure 9.2 illustrates the leadership transformation efforts needed to change the organization from a traditional supply chain to a DSC across key focus areas. The central idea being that operational actions needed to deliver performance in the traditional environment are not sufficient for digital business. DSC leaders will need to shift their focus to become more integrated, cross-functional, and technologically sophisticated. The following are some key transformational drivers for each area.

Leadership Focus

The leadership focus for the traditional supply chain has been established for decades. Traditional internal metrics such as perfect order performance, days inventory, transportation costs, and forecast accuracy are the main drivers for everyday operational decision-making and leadership actions. Transformational leadership requires rethinking selected current operations and allowing vision and strategy, informed by priorities, to be unconstrained by current operations. While not a blank slate, the creative use of insights, technology, and business modeling will ideally bring about top- and bottom-line business performance improvements that expand beyond the internal supply chain function.

Operational Focus

The traditional operational focus of the supply chain leader is narrowly on order fulfillment while managing costs. The leadership mindset shift needed for operations is more of a cultural change to support supply chain as a set of processes that are a source of competitive advantage for the firm. By driving and implementing new sensing and stimulation actions, the supply chain function will play a more central role in driving customer satisfaction which means shifting away from order fulfillment.

People Focus

In the traditional supply chain organization, the performance of associates is measured by how well they deliver on their functional metrics and goals. Planners are measured on forecast accuracy, sourcing professionals on the lowest cost for inputs to production acquired, manufacturing leaders on reducing waste, and delivery leaders on the cost of transportation networks. In the DSC, a more integrated view of the end- to-end supply chain requires that leaders reward and measure enterprise performance. Information sharing, incentivized by customer experience metrics rather than siloed functional measures, becomes the new organizational culture (Saenz & Cottrill, 2019). The key in this focus area is to reduce the amount of conflict between functions, such as sourcing being measured based on the lowest cost of raw materials as input and production conflicting with manufacturing quality standards. Another common example is transportation networks being developed based on the lowest levels of inventory and delivery which cause stock-outs and possible delays in meeting customer expectations. The DSC reduces information latency, improves visibility, and allows for more integrated decision-making across functions (Houston et al., 2012). Leaders will need to make this happen because this kind of organizational change will not happen on its own (Wieland et al., 2016).

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