Digitization is turbocharging supply chains and in the process, eliminating jobs. Politics, business and personal career choices are bending to this new reality, leaving people confused, concerned and even bitter about the change. Is digitization friend or foe?
Matt Davis, Managing VP at Gartner, recently presented an encouraging picture of digitization that shows how it can work for you. His view is that digital technology, while rapidly displacing human labor, is equally rapidly enhancing human brainpower. I interviewed him this week to get more insight on how this dynamic is working.
Kevin O'Marah: Technology enablement has risen steadily as a must-have supply chain skill. What does this mean for young people entering the field?
Matt Davis: Let’s start with what it’s not. Familiarity with software programming isn’t the same as command of technology enablement for supply chain. It’s about looking at a problem and seeing how technology might change it altogether. Don’t separate the technology from the business solution.
Traditionally technology enablement in supply chain focuses on breaking down work and then applying technology to automate process. Going forward, it will be essential that supply chain practitioners ask how technology can redefine the process entirely as things like 3D printing, robotics and Uberization make new things possible.
O'Marah: What about Gen-X or Baby Boomers leading and managing organizations?
Davis: The SCM World community’s experience suggests that first of all it’s necessary to break the hype. A great tip I heard once from a top supply chain executive was to be conscious of making the technology less scary. Amorphous, but real technologies like big data are potentially powerful, but their public image can be daunting. Demystify by focusing on use cases and then you can start the learning process.
O'Marah: Which technologies are most disruptive to the daily work of supply chain executives and why?
Davis: Machine learning may be most disruptive because it will change the work in two fundamental ways. First, because it applies to evolving the skill sets we use today. By observing and enhancing as-is realities of supply chain decision making, it will change work continually rather than promising a one-time step change.
Second, because it could radically change what it means to work in corporate functions. Cycles, timing, even the locations where decision-making work happens are all up for grabs. The nature of insight means value and work could disconnect. We’re likely to find that breakthrough ideas are worth more than continuous improvement on standard operations.
Breakthroughs in Decision Making
O'Marah: In Miami, you talked about planning. How would you describe the difference going forward?
Davis: Three things will redefine planning. One is that technologies like IoT and data analytics will democratize decision making. This will allow for high-frequency and high-impact decision making that taps more brainpower across the organization. Second is the shift away from procedural, pre-planned decisions to real-time, concurrent decisions, which will be faster and more precise. Finally, data historian capabilities will provide transparency to the context of past decisions, which accelerates learning from experience.
Davis: It’s interesting how widely this new approach to planning is taking root across industries. Colgate-Palmolive, Schneider Electric, Delphi and Amgen couldn’t be more different and yet all are starting to simplify their ERP and master data strategies to create pools of data from which information and insight can be extracted.
O'Marah: Have you got any advice for senior executives wrestling with these changes?
Davis: Get up to speed on Uberization. It’s the fastest-growing trend we see. People understand it intuitively and over just the past few months we’ve seen work started in trucking, warehousing, fulfillment and more. This trend is being driven faster by innovation among providers (think Uber drivers) than among supply chain strategists. You may think you’ve got it covered but the goalposts are constantly shifting.
Run, Don’t Walk to the Digital Future
Matt’s perspective is certainly futuristic and ambitious. A fast-follower strategy might seem prudent. Unfortunately, external pressures from private equity to protectionist politics threaten your very existence.
Better start now learning how digitization turbocharges your supply chain’s brain.
