Five Practical Steps to Data-First SCM

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Margarent TedlieMargarent Tedlie March 8, 2017

Organizational change can appear scarier than having Amazon.com coming for your industry. But with big data business analytics on your side, it doesn’t have to be that way. 

“Executives – in the C-suite and at the top of SCM (Supply Chain Management) organizations – must embrace organizational change management.”

That’s one of the key takeaways from Data-Driven Visibility and the Next Revolution in Supply-Chain Management, the first white paper from the newly formed Clear Peak Supply Chain Advisory Council.  Look for this compelling report to publish this month.

Our research found that, while data-driven SCM is the goal of almost every organization, too few plans have gone from the drawing board to real-world implementation. Despite the disruption of new competitors, channels and manufacturing and delivery technologies, as well as uncertainties in sources of supply, SCM that’s based on total visibility of every link is still an aspiration for the vast majority.

SCM Impacts Almost Everything

There are understandable reasons for this “aspiration/reality” gap.

The changes required are almost always profound, and they’ll affect the entire enterprise, as well as supply-chain partners and customers. Many executives are wary of change. They fear that adopting data-driven SCM can be almost as disruptive as, and more immediately painful than, external threats like aggressive new competitors.

But overcoming that reluctance, and bridging the gap, can be the difference-maker in a company’s long-term survival. If you or your executive management is struggling to move forward with data-driven SCM, how can you get off the starting block? A good way to start is to consider the transition process in five discrete steps.

Begin With a Data-Gathering Blitz 

  • Change is only made viable through data visibility. Gain as close to a 360-degree view of your supply chain as possible.
  • Break down silos and aggregate and incorporate information from all relevant data sources within your organization and from supply chain partners and 3PL providers.
  • Identify gaps in information and prioritize their importance
  • Harnessing the torrent of information from big-data sources can be intimidating. Use third-party data and exterior sources and consultants, including from non-competing industries and markets, to verify/challenge assumptions, identify strategies, and flesh out data for analysis.
  • Then, focus on the critical data – while knowing where your blind spots are.

Know Your People and Your Culture

  • Assess the risk tolerance of your corporate leadership and the skillsets of your staff. Supply chain pros traditionally have been experienced, longer-tenured personnel; a 2007, pre-Great Recession Inbound Logistics study found that SCM managers skew older – largest segment is 48-52 – and may be averse to change. More recent studies underscore the language-skill diversity of warehouse personnel. And the demand for SCM talent is astronomical and expected to intensify during this decade, per Supply Chain 24/7.
  • Factor in the human costs of change and develop strategies to mitigate negative impact of transition. Determine how to keep your best employees and grow their capabilities in the next-generation organization.
  • Work with academic institutions to develop the skillsets and talent you need for your longer-term goals.
  • Provide training and positive feedback to engage all levels of the company. After all, a data-first culture is about creating insights and empowering efficient decision-making everywhere in the organization.

Formulate and Articulate Your Long-Term Vision 

  • Determine your company’s long-term strategic objective. Look forward a minimum of three to five years – or longer if possible.
  • In addition to your personnel, what other resources, processes and systems need to be aligned to achieve that objective?
  • Understand that the transition demands times of awkwardness or pain; can you anticipate when these will happen and how you will move through them and minimize their duration?
  • As your vision/plan takes shape or stabilizes, appropriately articulate the changes upcoming to your field, your supply chain partners/3PL providers, and your strategic customers.

Put Plans – Piecemeal or Wholesale – in Motion

  • Take action … but your rollout or implementation strategy may be driven by real life considerations or circumstances. Plan accordingly.
  • Absorbing or integrating a company post-M&A, for example, may demand accelerated or wholesale changes in SCM practice and technology to enable a data-first environment.
  • A coordinated series of pilot programs may be a preferred alternative for implementation. It can cause less stress on the organization, provided it drives to the ultimate goal of a data-first supply chain and continuously improves the transition process itself.

Measure Results and Don’t Be Afraid to Pivot

  • From the outset of implementation, establish clear KPIs and measure performance consistently.
  • Use performance metrics up and down the chain – help C-suite understand the effectiveness of the program, and reward operational personnel through demonstrating the positive impacts of their actions.
  • Use data to identify new opportunities, refine strategies and adjust your plan as needed.

Few reasonable people would argue that changing established processes and organizational cultures – flawed though they may be – is easy. But most would argue that, faced with the disruption in modern commerce, the adoption of data-driven SCM is urgently needed.

Does the projected pain of change get in the way of a truly data-driven supply chain for your company? 

Do you have enough confidence in your knowledge of the facts to lead your team to success?
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