It has been over 15 years since the internet has started revolutionizing the way we do business. But even today, there are still companies who commit only the worst of knee-jerk reactions to these digital developments.
Rather than explore the world of big data analytics, leaner production and the innovation of e-commerce, these firms prefer sticking to an old world of politics and unsustainable excess.
Unfortunately, numbers do not lie and the conclusions are painfully simple. It is either your company improves its delivery to end-customers or drown in the cost of maintaining an inefficient operation.
That said, here are a few examples of poor management reasoning that results in the latter.
- “We distribute our products digitally. Do we really need a supply chain expert?”
First, let’s tackle those who immediately think that the digitization of a product is a magic bullet that eliminates all possibility of distribution problems. It’s nice to think that you’re actually innovating but it should not lead to your organization underestimating the capacity of disruption having its own digital incarnations.
And yes, even a digital means of delivery is prone to disruption. Think about the limits of your server load. You also have the threats of hackers and Denial-of-Service (DoS) attacks. You think Cyber Monday does not have its own version of a retailer’s Black Friday mob? Try asking the I.T. professionals charged with ensuring their e-commerce websites don’t crash.
Going even further, presumably you will have suppliers requiring someone skilled in supplier management, who have contracts, thus requiring someone skilled in contract management. You will also have customers, who provide demands, so you will need some sort of demand management and what about customer experience (CX), all of this is incorporated in supply chain management.
- “Our process is time-consuming for a good reason. We need to maintain quality.”
None of this is sufficient to conclude that your lead time can’t be reduced elsewhere and/or there are not opportunities for improvement that would emerge from such an assessment.. You could be handcrafting quality textiles and there will still be areas like sourcing, shipping and the customer interface to improve upon via a digital initiative.
Look at the film industry. We can download a hit series or a blockbuster in less than an hour but we still have to patiently wait for a few years for a solid sequel. The onset of digital technology should not be seen as an attack on quality methods if they are value drivers. It simply means that other drivers could still use a digital upgrade.
- “The majority of our customers don’t use digital channels. Why should we?”
It could be because it can still improve your lead times and reduce inventory holding cost? It could also be because digitization is not limited to the innovation of the front-end?
Again, there are other ways that today’s digital revolution can be injected into your supply chain network and safeguard it against disruption. What if you could create a collaborative leadership team simply by increasing communication between them? That would save you loads of time instead of waiting for paper reports to show up on each manager’s respective desks.
The same goes for the construction and approval of process maps. Gone are the days when we have to wait weeks to have these reviewed and discussed. Doing so via business collaboration tools leaves you no room for any more delays.
No matter how small or how niche your business is, you have a supply chain that could be hiding tremendous value and need only innovate the means to realize it. The digital revolution should mean an evolution of your supply chain management. Not the other way around!