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The Post-Modern Supply Chain: Connecting the Dots in the Age of Digital Disruption

You don't have to look too far, or listen too intently, to detect signs of digital disruption these days. We're in the midst of a veritable eruption of disruption, taking place across the business landscape and radically reshaping everything from customer interactions to internal processes to extended supply chains. Needless to say, it's far better to be the disrupter than one of the rudely disrupted.

The Post-Modern Supply Chain: Connecting the Dots in the Age of Digital Disruption

Forrester Research recently issued a seminal report named The Future of Business is Digital, a title that pretty much nails it. Its authors, Nigel Fenwick and Martin Gill, argue persuasively that the traditional linear value chain is obsolete and that businesses must create what they call “dynamic ecosystems of value” in order to deliver enhanced value to customers going forward.

To Forrester, this means being “part of an ecosystem of suppliers that customers assemble according to their needs and an ecosystem of collaborating businesses sharing data and services.”

When you think about it, this is heady stuff. Essentially, it means dropping the traditional stand-alone company mindset and connecting with a galaxy of suppliers and partners (some that you haven’t even considered yet) in ways that let you respond dynamically to customer needs and fast-changing business conditions.

So, what does this mean for today’s supply chain? It means that the modern supply chain that companies have labored to create over the last decade is ripe for digital disruption.

The digital revolution has thrust us into a post-modern era. In the past, the focus was on modernizing systems and streamlining processes for business efficiency. Relative to supply chains, businesses have been pretty successful in this endeavor. Today, in our post-modern era, the latest digital technologies are shifting the focus to one of driving agility, innovation and collaboration across all operations, the supply chain included – in fact, most particularly the supply chain. 

The post-modern supply chain will be the flexible foundation of the new digital enterprise and its “dynamic ecosystems of value.” What must it look like? For starters, it must have five core value points, including being:

1.    Connected – Extended supply chains are not often viewed as single systems, but rather as discrete segments. But given today’s increasing interdependencies across vendors, it is imperative to be able to see what is best for the system as a whole and to run the entire supply chain as a connected system with no silos of information, administration or technology.

2.    Collaborative – Businesses and their suppliers and partners increasingly need to collaborate in meeting customer needs and soaring expectations. Mobile, social and collaborative tools are the real-time grease on the connected supply chain skids, helping to maximize visibility and spur informed decisions and effective actions.

3.    Dynamic – The rise of the Internet of Things (IoT) and the proliferation of smart sensors are making it possible for supply chains to respond dynamically to all sorts of changes in manufacturing, transportation and general business environments. Companies need to embrace these trends along with complementing business intelligence solutions in order to further reduce the costs and increase the agility of their supply chain operations.

4.    Nimble – Forget about customer loyalty. If you can’t give customers what they want, right now, every time, someone else in the digisphere will. Businesses now need to be able to turn on a dime to react to or anticipate needs and trends, and that requires being able to collaborate effectively with partners and quickly orchestrate new and existing suppliers to speed innovative new offerings to market.

5.    Secure – As supply chains become even more extended and collaborative, companies face an interesting security challenge. Not only does data need to be comprehensively protected in an increasingly diffuse and porous environment, but it needs to be easier than ever for parties to interact with data and with each other in an unobstructed fashion, whenever, wherever and however they want. Neither of these two imperatives can be allowed to get in the way of the other. The most important step towards rationalizing them is to automate the securing and managing digital identities across the supplier, partner and customer ecosystem.

Digital disruption has created the need for companies to view their value from their customers’ perspective, and in these digital times, that perspective has less to do with brand and more to do with the ability to deliver almost-immediate 100 percent gratification. Delivering this consistently – because, really, you’re only as good as how you’re handling things at this precise moment – will take a connected, secure, post-modern supply chain geared for business agility and for collaboration across an ecosystem of suppliers and partners.

How prepared are you to connect all those dots? Think about it.

Source: Covisint

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