Peter Hinnsen, Wednesday’s guest keynote speaker at the Gartner Supply Chain Executive Conference, hit the nail on the head when he applied that famous (if somewhat trite) Dickens quote to the state of the supply chain industry today.
It’s an exciting time to be a supply chain professional – there’s no question about that. The industry is ripe with technological innovation and change, a buzz palpably felt in Gartner’s exhibit hall. Attendees were appropriately on the hunt for “the next big thing” to help streamline or automate their operations.
At the same time, we’re also dealing with some of the worst challenges the industry has ever faced. Freight costs remain high – up to 15% higher than 2018 averages, Gartner estimated. The capacity crunch is still taking its toll: One prominent CPG company reported that its load tender acceptance dropped from 90+% in December 2016 to 56% in December 2018. And transportation managers are faced with delivery penalties and pressure to constantly do more with less.
As an added expectation, supply chain professionals are being pushed into the digital age. Gartner research shows that over 65% of CSCOs are actively pursuing some form of digital supply chain initiative, and the conference – aptly named “A New Era: Converging the Physical and Digital Supply Chains” – was entirely focused on that theme.
The Tuesday keynote, led by Gartner analysts Amber Salley and James Lisica, outlined three paradigm shifts:
- —> Integration
- —> Ecosystem
- —> Automation
- —> Autonomous
- —> Optimization
- —> Synchronization
Throughout the three-day conference, Gartner analysts and guest speakers alike described the future of digital supply chain as a synchronized, autonomous ecosystem in which artificial intelligence drives decision-making, and partners work together in real time to maximize operational efficiencies. Sessions focused on case studies and strategies to best undertake a digital transformation.
But what is digital supply chain transformation, really?
Gartner research suggests that most initiatives currently in place are really just cleaning up shop with current technologies. For example, they might be ensuring that your systems are integrating properly, or establishing decision-making criteria to pave the way for AI capabilities down the road. Many companies are stuck between the first couple stages of these processes, unable to start groundbreaking digital transformations until they have un-siloed operations first within their supply chain, and then cross-functionally within their organization.
In a recent study, Gartner asked supply chain executives where their digital initiatives will be focused over the next two years. Responses showed that 70% of executives expect to still be integrating within their supply chains and their organizations. Only 16% expect to be working on new digital business models within the next two years.
Is your supply chain ready for the digital transformation?
In the session titled, “Lead supply chain down the road to digital success,” 3M described its objectives for digitization, which included standardizing its ERP foundation, improving cloud-based supply chain visibility, and experimenting with new technology (in this case, machine learning).
The same sentiment was echoed in a panel session moderated by JDA. Panelists emphasized that the key to a successful digital transformation is thinking about end-to-end change, artificial intelligence and real-time collaboration. No one company can keep their digital supply chain entirely in-house, and they need partners to help you accomplish those goals. To that end, Darren Coil, Director of Business Strategy for Microsoft, shared these four questions to ask yourself when choosing a partner to assist on your digital supply chain journey:
- Are they going to be around to take the journey with you?
- What else can they offer besides just a place to house your data?
- How fast can they innovate?
- Do they have a clear understanding of who they are as a company, and of what they do well?
Coil argued that the fourth question is important not only for the success of the project, but for the security of company data. If partner companies know their respective strengths, they’ll stay in their swim lanes and do everything in their power to execute.
What does a digitally enabled supply chain look like?
Land O’ Lakes was one of many companies at the conference who presented use cases for innovative digital supply chain technology to solve industry dilemmas. Nick Najjar, Senior Manager of Transportation, described how his organization is using real-time and predictive visibility (full disclosure: FourKites) to maximize collaboration among supply chain partners – including both managed and unmanaged freight. He also described several projects between Land O’ Lakes, FourKites, Uber Freight, and others aimed at reducing dwell, streamlining transportation procurement and eliminating deadhead miles.
Land O’Lakes has proven itself to be a true thought leader in the space, and its organization-wide innovations illustrate Coil’s strategies presented above: forward-looking, rapidly innovating, and based on collaboration with trusted partners.