Digital supply chain transformation and customer-centricity

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Turning a digital business strategy into a reality remains elusive for many organizations. Even businesses that are forward thinking and have already begun developing a digital transformation strategy will find new gaps to fill and new challenges to address that didn’t exist last year in the areas of new regulations, new trade policies, and new customer demands, to name a few.

As a result, many businesses are recognizing that digitization is not only about improving business processes or automation. Digital transformation is about redefining business. It’s about wrapping services around products, or going a step further, replacing products with services.

Cloud technology is a catalyst to new business models, with data, digitization, and networks serving as the underlying core. When this is applied to a supply chain — where hundreds of people and parties impact the order, production, and delivery of goods — it spawns new ways for businesses to service customers.

Supply chains are rife with inefficiency, bottlenecks, and information silos. They tend to be set up as long, winding linear trails of business transactions. Data and visibility remain bottled up in each trading partner organization. This fragmented landscape has become inadequate in today’s world of always-on commerce and ultra-demanding customers. On the surface, there is low-hanging fruit in digitization of processes such as order management or supplier collaboration. But digital transformation possibilities run much deeper, into the foundational infrastructure of business-to-business commerce, where a network approach to business can deliver massive returns by finding new ways to deliver value to customers.

Transforming entire industry supply chains

Digital transformation is a broad term being probed and defined in multiple ways. In some industries, such as automotive, the movement is not so subtle — and more of a change locomotive. Disruptive factors such as connected cars and autonomous vehicles are reshaping the industry. The transformational vision for automotive companies is a new ecosystem of suppliers, original equipment manufacturers (OEMs), dealers, and complementary services that enable new customer experiences and products to be delivered.

The industry is well on its way. Major players like Ford are investing heavily in technology. Ford just raised $2.8 billion to drive new innovation. The company has already committed to spending $4.5 billion to bolster a lineup of electric cars, with plans to release a fully autonomous car in 2021. The ability to integrate new innovations, technologies, and suppliers into the automotive ecosystem will be key to excelling in the future.

In retail, digital disruption is being spurred by immense pressure from consumers. And similar to auto, where outsiders like Uber and Tesla bring disruption, retail has been upended by the Amazons and Alibabas of the world. Consumers are accustomed to Walmart-like low costs and Amazonian convenience and delivery. As a result, retailers across all segments are being forced to be hyper-sensitive to consumers’ needs and wants. But competing with Amazon on delivery services while offering competitive pricing comes at a cost — to profitability.

Retailers recognize the need to transform how they order, produce, and deliver goods to be customer centric in new ways, while remaining profitable. New experiences and services are essential. Consider how retail is already evolving and leading to supply chain transformation. Some of the growing trends in shopping today include social shopping, pop-up stores, mobile commerce combined with trucks and vans, click-and-collect, personal shoppers, subscription-based shopping …

In-store, retailers are innovating as well. Ralph Lauren has introduced interactive touch-screen mirrors in its fitting rooms. IKEA has deployed virtual reality to allow shoppers to envision new rooms in their home. West Elm, a furniture provider owned by Williams Sonoma, has announced plans to open five hotels, which will act as showrooms where consumers can purchase goods.

Under pressure from nontraditional competitors and demanding consumers, the future supply chain relies on a network of manufacturers, suppliers, and service providers built around the customer to deliver new experiences, services and value.

2017 will sharpen focus on customer-centric commerce

The bounds of traditional business are being stretched. In 2017, we’ll see technology trends that go deeper into the reshaping of business models and further redefine industries.

Automotive companies are evolving into transportation service providers. Competition from non-traditional players raises the bar on technology and connectivity, forcing automakers to find new suppliers and partners that can deliver tech savvy innovation.

Retailers are evolving to deliver new forms of experience to the consumer. Competition from beyond the traditional industry is forcing retailers to get closer to customers through fast or free shipping, free and simple return programs, customized goods, and seamless order fulfillment from any shopping channel.

Consumer product brands like Tide are getting into homes with their detergent pods; consumers push a button from their laundry room to place an order. This bypasses the retailer and goes direct to the consumer.

In 2017, questions such as “What defines a true automotive company?” or “What defines a true retailer or consumer product company?” will have to be examined and redefined.

At the centre, of course, is the customer. Customers expect and demand more. Delivering on these expectations and fulfilling orders requires manufacturers and retailers to rewire the way they produce and deliver goods to their customers.

2017 looks to be a year of uncertainty and change. Social, technological, environmental, and political disruption will have massive impacts on commerce and supply chains. For businesses operating in nearly any industry, this means more pitfalls and challenges, accompanied by more pressing demands from customers. Companies and trading partners that fail to adapt are at risk.

Supply chains of the near future will have to operate as customer-centric networks. This should be the end state, or vision. Getting there requires a long road, starting with digital transformation.

 

About our Guest Blogger

Helen Masters
Vice President & Managing Director, Infor South Asia — ANZ & ASEAN

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Helen Masters is Vice President, South Asia – Infor ANZ & ASEAN where she is responsible for the development and promotion of global corporate products and seamless customer experience to augment market presence in the Pacific and ASEAN regions. These comprise Australia & New Zealand, Indonesia, Malaysia, Philippines, Thailand and Singapore.

In her role, Helen maintains new product lines with a focus on customer and partnership management and strategy-setting to grow business in Infor’s key micro-verticals in the South Asia region.

Prior to Infor, Helen was Vice President, Commercial and Emerging Markets, SAP; and Head, Emerging and Transformational Alliances Group, Cisco Systems where she was responsible for the launch of data business solutions.

Helen is a graduate of Macquarie University, Sydney, Australia and is also certified in Computer Programming.

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Is your business disruption ready?

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A technological storm is brewing, one that has many different names. The Fourth Industrial Revolution. The Cyber Physical Supply Chain. Industry 4.0. The Age of Disruption. The Digital Age.

Whatever name you prefer, the concept behind them all is the same; we are facing a wave of change driven by innovations in robotics, autonomous vehicles, additive manufacturing, smart machines, e-commerce, big data, artificial intelligence, machine learning and cognitive computing. Machines are becoming smarter. Jobs are becoming automated. Management is becoming outdated.

It is poised to affect the entire end-to-end supply chain. It’s impacting every area from digging stuff out of the ground, through to the factory, the warehouse and now the transportation of goods. Your children are unlikely to do the same job you did. In fact, the entire concept of a job for life, even just a career, is something that may soon be a relic of the past.

It’s a winner take all model. For those winners, the spoils will be enormous, concentrating great power into the hands of a small group of technology driven organisations. Unlike the First Industrial Revolution, which benefited people both as participants in the production and consumption of goods, this time round the greatest beneficiaries will be those with capital; the shareholders. The benefits to ordinary people will be limited to that of a consumer.

To demonstrate how big this shift is, according to a 2014 estimate, the three leading companies of Silicon Valley had a combined market capitalisation of $1.09 trillion and employed 137,000. Just twenty-five years earlier, in 1990, the three largest companies in Detroit had a market capitalisation of $36 billion – but they also collectively employed about 1.2 million workers. The trickle down model seems to have stopped trickling.

So while the World Wide Web provides many things for free, such as knowledge, many workers are seeing their traditional skills become redundant by new computer technologies and the new employment opportunities have mainly been created for highly skilled workers. The scary point is, we are only at the very start of this economic and social transformation. By 2025 autonomous vehicles –cars, lorries, drones – will be commonplace, replacing the multitude of driving jobs currently carried out by people. In the US alone there are 8.7 million trucking-related jobs, and approximately 1 million car drivers (180,000 taxi drivers, 160,000 Uber drivers, 500,000 school bus drivers, and 160,000 transit bus drivers). Very few of these will have a job moving forwards.

The transformation will affect more than blue collar workers; the nature of occupations and whole industries is changing. Technology is enabling not just the automation of repetitive tasks but also cognitive tasks involving subtle and non-routine judgment. All the signs indicate that we are entering a period of disruptive change of a scale not seen since we decided to put down our pitchforks, stop living an agricultural existence and head for the cities to become part of an industrial society.

Companies like Amazon, who have a clear vision as to how these technologies can aid their mission to dominate the world of retail, are mercilessly pushing their virtuous cycle of innovation, changing the way we buy goods, and our expectations around when and how they are delivered. They envision an end-to-end value chain dominated by platforms that they are in control of, a model where the consumer only has to say out loud what they want, and behind the scenes a fully automated global supply kicks into gear to provide your goods within hours.

The days of mass production are now over. The future supply chain will be personal, automated and local. The question is – are you ready?

To find out the answer to this, and to learn more about the nature of this new wave of creative destruction, be sure to attend my full day workshop on Disruption in the Supply Chain.

During the day we will explore the nature of the changes currently underway, how they will affect your business, what companies like Amazon are doing with these technologies to ensure they orchestrate the whole international supply chain, and how companies need to change their mindsets and organisational structures in order to adapt to this new world.

Learn how to not just survive, but thrive during this time of disruption.

About our Guest Blogger

Sean Culey

Member of the European Leadership Team of the APICS Supply Chain Council SCOR-P, FCILT, is a recognised strategic advisor, business transformation expert, keynote speaker and author focusing on helping companies develop compelling value propositions and strategies that get executed. Previously CEO of SEVEN, Sean has 25 years of global experience across numerous verticals, and is also CMO for an international software company. Sean will be delivering a series of workshops on the impact of disruptive innovations on business across the Asia Pacific region in November 2016, and his first book; Transition Point: Revolution, Evolution or Endgame? is due in 2017.

http://www.supplychaindisruption.com

Change afoot: Pokémon Go fast-tracks augmented reality uptake

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You don’t have to be a gamer to know that Pokémon Go has taken the world by storm. You may have caught onto the craze. What is evidently apparent is that augmented reality, on which the game is based, is here is stay.

According to Clint Bertenshaw, apicsAU’s Education and Training Senior Officer, technology is battling two ways forward: virtual reality and augmented reality. He says augmented reality trumps every time over virtual reality because it incorporates the real world, including the workplace.

“Augmented reality will become a game changer for businesses because it will drastically transform the way we do our jobs. Some of its characteristics – including remote support; hands-free training; and the visualisation of pictures, data, text and other information – lend perfectly to the logistics and operations environments.”

apicsAU’s upcoming Symposium, “Navigating your supply chain into the future” is a theme on trend right now as it addresses the elements affecting our supply chains, including technology.

In a recent article “Prepare for the augmented reality workplace: The tech behind Pokémon Go will be in offices sooner than you think,” by Stephen Mercer, UK technology consulting leader at Deloitte, augmented reality could even be responsible for providing employees with instructions on how to respond to real life situations as they happen.

If augmented reality technology in the workplace uptakes as quickly as the Pokémon Go craze, then our workplaces could be completed transformed in the next few years. There will only be one constant. Our workplace culture.

According to John Bradbury, co-founder of The Operations Academy, introducing change as a learning process will mean employees are more likely to embrace change. It boils down to a strong workplace culture. He says a strong workplace culture is characterised by:

  1. Vision/Mission– A commitment to a clearly defined compelling future that is explicitly understood not just by the leadership, but throughout the organisation.
  2. Listening Generously – Learning to listen for the contribution in each other’s speaking as opposed to interpreting from one’s own assessments, opinions and judgments.
  3. Speaking Straight – Speaking honestly in a way that moves the business forward. Making clear and direct requests. Being willing to raise ideas or take positions that may result in conflict when it is a necessary step towards reaching objectives.
  4. Being There For Each Other– Supporting each other’s success. Operating from the point of view that we are all in this together and that any one person cannot ‘win’ at the expense of someone else or the business. Looking for each other’s greatness and providing rigorous support when needed.
  5. Honouring Commitments – Making commitments that move the business forward. Being responsible for our own commitments, holding others accountable for their commitments and supporting those who need assistance to achieve this goal.
  6. Acknowledgment and Appreciation – Each employee commits to be a source of acknowledgment and appreciation for the team; this includes giving, receiving and requesting acknowledgment.
  7. Inclusion – Learning to ask the question: “Who needs to be included in this conversation, decision or project to produce speed, effective action and the required result?”.
  8. Alignment– Maintaining the concern: “Are we addressing this issue, policy or problem with a regard for building alignment?”, as opposed to forcing our view or merely going along with the prevailing view.

Developing this culture requires a long-term commitment from the leadership, focusing on how employees are working, as well as on the systems and tasks required by the business. If this focus is maintained, the culture and business performance will develop hand in hand and augmented reality in the workplace becomes an opportunity rather than a threat.

John Bradbury is presenting at the upcoming Regional Symposium, Navigating your supply chain into the future being held as a one-day event on 25 August in Seven Hills, Sydney – at the heart of Western Sydney’s manufacturing and distribution hub. Further symposiums will take place in Melbourne on 19 October and Perth in November. Register now to receive an early bird discount of over $100.

To become an apicsAU professional member, to register for the symposiums, or for more information, please visit our website or call us on 02 9891 1411.