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Supply chain transformation refers to the transformation of a company from operational efficiency to operational effectiveness, says Rich Sherman, "principal essentialist" at Trissential. "It is all about creating a culture of process improvement, which eventually leads to a culture of process innovation where you continually adjust your supply chain to adapt to changes in the market."
That is an end that most leaders say they want, but going through transformation "is probably the most painful thing companies and employees ever experience," adds Robert Sabath, also a principal essentialist at Trissential. That's because the supply chain touches so many parts of an organization and transformation targets a lot of issues people don't want to address and processes they don't want to change, he says.
While these forces work against change, an equal or greater force in favor of supply chain transformation also is at work and that is the fear of being left behind, says Sherman. "Real leaders are continually asking how they can beat the competition, how they can leverage the supply chain to compete and win," he says. Interestingly, research over the years has shown that laggards work just as hard as leaders, he says. "The difference is that laggards are working to survive while leaders are working toward a goal and a vision," he says. "So the key question you have to ask is, are you working to lose or are you working to win?"
One key aspect of working to win is building processes with the visibility and flexibility to see and respond to market changes, says Sabath. "One thing we encourage our supply chain clients to do when they are looking to the future is to bring people in that they tend not to talk to - for instance, bring in the customer that really cannot stand you and does business with you only out of necessity. Sit down and talk about what he doesn't like. Then bring in your best customer, bring in someone who just left one of your top competitors. One of our favorites is to interview the guy who has just been fired from a competitor and let him objectively talk about why he thinks the competitor is better or worse. The point is to start moving in the right direction before you are blindsided."
That includes staying on top of emerging technologies, says Sherman. Mobility and cloud computing are enabling whole new worlds of visibility and analytics, he says. "There are a lot of technology advances on the horizon, and companies that are not scanning the horizon to see how those changes will converge to make a big-bang change are in danger of being left in the dust."
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