The coffee shop was buzzing.
I was meeting my longtime friend Gagan, and we managed to find a reasonably quiet corner to settle into for what I anticipated to be a long conversation. He and I went to school together and started our supply chain careers at nearly the same time. I joined a supply chain software company while Gagan joined a large global manufacturer and quickly grew through the ranks to be the vice president of supply chain IT in his company. Throughout our careers, we continued to meet up whenever our travels crossed paths. Gagan is typically an upbeat and optimistic person, but on this day, something was clearly weighing him down. As it turned out, it was about his job, his sense of ownership, digital transformation and his company’s supply chain. Gagan was reporting to the CIO, and the board of directors recently mandated the company embark on a digital transformation journey. As part of the initiative, Gagan’s CEO brought in a new chief digital officer (CDO) as a peer to the CIO. And that’s when Gagan’s troubles started.
Two sheriffs in town
Almost immediately, the new CDO declared responsibility for all new technology initiatives in the company. Quite naturally, the CIO started digging in his heels, increasing tensions between the two executives. Their differences were eventually settled by the CEO, who decided legacy assets and most back-office systems should be the domain of the CIO. Any newer digital technology portfolios would be cloud-based and mobile, and where appropriate, open source. These would belong to the CDO.
The result? A disgruntled team
Gagan’s team of young analysts continued to support legacy supply chain applications from an established vendor. However, his team grew disgruntled as the CDO took on newer, more interesting projects based on everything from the Internet of things (IoT), to data science, machine learning, advanced analytics and blockchain, to mention a few. Understandably, Gagan’s team started to feel like they were being left behind.
Keeping the lights on
“Agility and flexibility” became the company mantra, leaving Gagan with the overwhelming feeling that his team could not possibly deliver on the promise. After all, the supply chain planning applications his team supported were built on legacy batch-oriented architecture, significantly limiting his team’s ability to mitigate the challenges the company faced, all largely due to the following systemic limitations:
- Data islands: As the company experienced inorganic growth, diverse technologies were constantly added to the mix, leaving data siloed and blocking end-to-end visibility.
- Planning in silos, node by node: Finished-goods distribution planning, manufacturing planning and purchase planning were all happening in silos, further adding to the company’s woes.
- Latency in decision making: While the company’s supply chain planning system ran in batch mode, business ran in real time. When a production line went down or supplies did not arrive when expected, planners resorted to offline excel spreadsheets, resulting in delays that could last hours before contingency plans could be formulated and put in place.
- IT overload: Because the system was so rigid, enhancements required heavy IT involvement. Predictably, support tickets started piling up, and Gagan’s team was taking heat from the users.
“My team could deliver anything but ‘agility and flexibility,’” said Gagan. “While the CDO got funding for new technologies, funds from our organization were siphoned off to support them. We were accountable for ‘agility and flexibility’ but didn’t have the budget to back it up. Not once did the CDO update us on the projects his team was working on, nor did he ask what we were wrestling with. My boss, the CIO, is completely sidelined. It’s as if my team is being led on horseback into a 21st century battle field with nothing but bows and arrows. We’re getting slaughtered. In fact, my lead architect just left the company.” I took a sip of my now lukewarm coffee, and pushed the cup aside. Gagan had gained weight. His eyes were sleepless and his face was showing age beyond his years. I worried for him and wondered aloud what he was going to do next.
Fast forward a year and a half
When Gagan was in back in town, we got together for dinner. I couldn’t believe the transformation. He was lean and fit, looked ten years younger and was in high spirits. Gagan had left his previous company to lead the supply chain IT at another fast-growing company. In many ways, the nature and dynamics of his new company was no different from that of his previous company. The biggest difference? The new company had invested in a leading-edge supply chain platform, giving new life to the mantra “agility and flexibility.” Here is how the new system supports the business and improves supply chain management:
- Cloud-based, always-on planning: No longer are batch jobs needed for planning (other than bringing in data at an appropriate cadence and frequency). The system itself was always on, sensing changes and responding rapidly in real time. The solution was Software as a Service (SaaS), eliminating hardware procurement and stack configuration lead time, saving valuable weeks and months.
- Data harmonization to support inorganic growth: While the company perfected the onboarding process for the new businesses they acquired, the platform’s data harmonization capabilities allowed them to generate an end-to-end view of their supply chain without having to consolidate underlying systems.
- Simulation capability: During a recent hurricane, several company suppliers went down. Using the new system, supply chain planners quickly simulated recovery plans and locked in alternate supply sources well ahead of their competition. “Agility and flexibility” at its finest.
- Changing role of IT: The system’s self-service capabilities gave power users the ability to configure reports and make changes to models as the business evolved, freeing up Gagan’s team to focus on newer, best-of-breed technologies to augment the organization’s capabilities. The role of IT significantly changed in his new world.
Now, Gagan even found time to take up running again—and finished a marathon in a personal best time. I wondered if Gagan’s new company had a chief digital officer. They did not. However, Gagan elaborated for me. “We did hire a young digital transformation specialist in the IT organization. We couldn’t have done it all without her support. She was instrumental in helping select the right technologies and hire the right talent. She collaborated with my team and the business on use cases and end-user personas, helping us lay a solid foundation for the new platform, with my team supporting the change across the business.” I asked how Gagan could possibly top this news, to which he responded, “Well, I was just promoted to CIO!” Do you have a story to tell? Comment below to share how the importance of supply chain management and the digital transformation affects your strategies for business success.