We began the series by stating that simply good isn’t good enough. That in today’s competitive climate, which requires companies to innovate, expand their service or product portfolios, and contemplate what’s next at a faster pace than ever before, satisfaction with incremental gains is a setback. Most companies put off digital transformations because they see the cost as overhead, an expense to avoid, and not a necessity for future survival.
For years, there’s been talk about the pressure to re-invent oneself and keep up with the fast-changing times. Yet, most managers are skeptical and somewhat suspect about whether the digital changes overtaking the industry impact them and, if so, the right way to go about incorporating them. Most who are ready to take the plunge believe that all they need is the next incremental version of their ERP, WMS, or TMS.
This narrow thinking is a big mistake. Technology and its applications within the supply chain is transforming in a substantial way, so changes to business processes must be equally substantive. Consider the ways in which new processes and technologies are impacting operations:
“The Amazon Effect”
Lightning-Fast Delivery – Speedy shipping models like Amazon Prime have transformed product and service delivery expectations for both consumers and businesses.
Broad Product Selection – The internet has long been “the great equalizer.” Expansive online marketplaces driven by sophisticated search and ranking algorithms offer limitless comparison shopping. Differentiating by price, quality, and service is no longer enough. Businesses must now figure out how to be seen and discovered online.
Precision Execution – As supply chain practitioners continue to adopt cloud-based systems, expectations for pitch-perfect execution in accuracy, handling, and delivery become the new standard.
The Challenge of Integrating Online & Offline Experiences
Cross-channel Fulfillment – Businesses are waking up to asset repurposing. While many concede the loss of brick and mortar, some are converging worlds through creative programs like Buy-Online-Pickup-In-Store (BOPIS).
Industrial IoT, AI, and Voice Assisted Everything – In the not too distant future, businesses will ask “Alexa, how many XYZ widgets are in-stock in the Dayton warehouse?” or “Siri, what percent of orders were shipped complete today?” You can only imagine where this is headed, so you better be prepared for it!
Constant Mobile Connectivity – Everything – and I mean everything – is centered around constant mobile connectivity (i.e. your smartphone). These powerful mini-computers connect us to the world in countless ways, through innumerable apps. In fact, a 2017 study by global tech protection and support company, Asurion, reported that the average person checks their phone 80 times a day. That means our personal and professional lives are entwined, though most businesses haven’t realized – to their growing disadvantage – the importance of this new reality.
Social Media Influences – If you think social media influences today are only about consumers, think again. Consumer experiences drive brand success, and brand success relies on effective back-end business processes. Experiential reviews are instantaneous, and reputations grow and fall in a flash – whether deserved or not. Your business, as part of a greater ecosystem, has to deliver as promised 100% of the time, or the downside will prove disastrous.
A great deal of change is happening outside your control. If you don’t deal with it and go with the flow (Walmart, Target, Costco), you risk serious consequences (Sears/Kmart, Toys R Us, JC Penney). Years ago, I was the CEO of a company that provided e-commerce fulfillment for a top tier, multi-billion-dollar retailer with thousands of locations. Unfortunately, they didn’t heed the warning signs and were set in their ways, focusing on generating in-store foot traffic to the detriment of online sales. Rather than leverage thousands of storefronts as warehouse locations, they operated with self-imposed blinders and squandered what could have been a significant advantage. Needless to say, they are fighting for their survival today.
Transformative digitization is a priority in all industries – automotive, industrial, medical, CPG, consumer electronics, aerospace and defense – not just retail. Today, new and non-traditional technologies affect everyone from manufacturers and distributors to shippers and 3PL operators. Those who’ve embraced these advances use unified platforms to converge and optimize planning and execution processes, AI cognition to calculate such things as inventory levels, IoT sensors to report on container temperatures and locations, 3D manufacturing to revolutionize production, and mobile devices to conduct business for greater convenience and satisfaction. These companies are setting the “best-in-class” standard. Anyone who fails to meet or exceed them will begin losing opportunities.
Waiting to transform is a growing issue. Putting off upgrades widens the divide between where you are and where you must go, between acceptable performance and operational excellence. As technology continues to accelerate, a digital transformation will become an increasingly daunting game of catch-up. The longer you wait, the harder it will be to avoid a ‘rip and replace.’
If you’ve been following the series, you’re likely entertaining a digital transformation and aware of what you’re up against. You might be brimming with revolutionary ideas within a company that prefers to play it safe. Don’t take your role lightly: You’re standing on the brink of exponential potential. Take the initiative toward more transformative steps and have the courage of your convictions – as well as the facts to support them. Demonstrate to your team why incrementalism is no longer the answer as both the industry and technology continue to evolve. Be detailed in illustrating how the lines between the physical and virtual worlds are blurring and why your system must reflect this new converging reality.
A lot of people hold back from doing what they really want because they’re worried about “group think” and company policy. I’ve always admired those who were brave enough to advocate a contrary course of action. “Rocking the boat” may feel uncomfortable, but it’s your job to help your team think bigger and bolder, to understand the risks of complacency and why their legacy systems are holding them back. When you make the case for a digital transformation and you see that there are still some nay-sayers and non-believers in the room, that’s the time to embolden yourself. We talked about trust as it applies to your company’s network; the same applies within the company too. Inspire a new outlook, but also substantiate your claims and help them see your vision not as a disruption, but as a growth enabler and revenue multiplier.
The greatest advancements of our age were not achieved by playing it safe. It’s called a transformation for a reason. Take a stand, prove your convictions, do the work, and uncover what is possible beyond simply ‘good enough.’
For more resources on this topic, please visit our Digital Transformation Toolkit.
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Bryce Boothby is an MPO board advisor and former executive of Flextronics, Celestica, ModusLink, Regenersis PLC, and Lulu.com. His blog series, “Making the Case for a Digital Transformation,” will investigate the topic of “Achieving the perfect order” and how companies can differentiate between solution providers, calculate returns on investment, choose a vendor, integrate with legacy systems, sponsor and sell the business case, and ‘try before you buy.’