Supply chain insights from leading industry experts
Supply chain skills in high demand, digital twins, disruptive technologies, and other takeaways from the 2018 Gartner supply chain conference
I just returned from the highly engaging and inspiring Gartner Supply Chain Executive Conference in Phoenix, Arizona. With more than 2200 supply chain professionals in attendance, the event had a very good representation across practitioners, technology providers, and consultants. Here are some key takeaways from the Gartner supply chain event:
1. Disruptive skills in high demand
During her keynote speech, Dana Stiffler, research VP at Gartner shared statistics highlighting how hard it is to find professionals who have the supply chain domain competence and strong knowledge of AI/ML technologies in the greater Chicago area.
Population of greater Chicago ~ 3,600,000 of these, those who know Production Planning and Forecasting ~ 5,600 of these, those with advanced digital skills (Tableau, SQL, Python) ~ 270 of these, those with AI/ML skills ~ 35
While the absolute numbers can be debated, I have to agree with how narrow the funnel gets as one hones in on the skills needed to enable truly digital supply chains. Dana stated that leading supply chain organizations such as Amazon are looking for disruptive skills such as Lean/six-sigma, SQL, project management, R, Perl, and Python in addition to the core supply chain skills, as compared to lagging organizations primarily looking for ERP and excel skills. Through my interactions with college students majoring in supply chain, I do see them taking a wide variety of courses that cross over into newer tools and technologies. This should partly address the need for such skill scarcity. However, this shortage will remain for the foreseeable future. This provides a great career opportunities for highly motivated professionals willing to invest time into picking up some of these new skills through very affordable courseware such as Coursera, Udemy, etc.
2. Fostering innovation through employee engagement
Ana Dzura of Unilever talked about how her organization established a “Digifund” to drive innovation at the grassroots level. Anyone in the organization may submit a four-minute video pitching their idea. From the time of submission, the governance committee has 48 hours to review the idea. If approved, the idea gets funds allocated to the tune of ten thousand Euros or so. Here are some real results from such “Digifund” initiatives:
- Significantly improved on-shelf availability for one category for one country for one retailer.
- Direct to consumer online shop launched with fully functioning billing, payment, shipping capabilities. The site was launched in eight weeks. New product was directly tested with consumers and the online shop was taken down upon successfully completing the consumer trial.
- Partnered with a plastic packaging company and technology company to collaborate and reduce the plastic content in the packaging for a particular product by 15 percent.
- Partnered with some African governments to ensure respect for human rights of farmers working in tea plantations while significantly improving their livelihoods and creating local jobs.
Given the success of such microfunded projects, “Digifund” idea is gaining further traction across other organizations in Unilever.
3. Decoupling of economic recovery and job creation
In a highly inspiring key note presentation at the supply chain conference, Fareed Zakaria of CNN spoke about how the jobs recovery following the 2008 recession lagged the economic recovery by as much as 64 months while the same metric for the previous recessions was significantly narrower. He attributed this decoupling of economic recovery and job creation to the rise of the innovative digital technologies and automation. While observing that US and Israel are lagging several other countries such as Singapore and South Korea in standardized tests, he attributed the innovation of US and Israel to the high self-esteem of the students, fostering entrepreneurial spirit. He concluded his presentation by urging the audience to think of how we as supply chain community can ensure that human beings are not left behind amidst tech powered productivity gains.
4. Digital process prototypes
“Digital twin” was the in thing at this year’s Gartner Supply Chain Executive Conference. The rise in computational power and storage capacity is making it practical for organizations to create a digital copy of their entire end-to-end supply chain in the cloud with all the data and knowledge of the business. This digital twin allows supply chain professionals to simulate a variety of conditions and implement them in their physical supply chains with little to no latency. Agile implementation methods are allowing organizations to test new ideas quickly. One of the technology vendors commented that doing six-month long process assessments before taking on technology is a thing of the past. His view is that technology has reached a point where the process assessment can take place by prototyping ideas on technology platform, learn quickly and evolve. I fully concur with this point of view.
5. Preparing for direct-to-consumer business models
Simon Bailey of Gartner spoke about how the traditional companies need to pivot towards direct-to-consumer (DTC) models. Manufacturers that are used to shipping pallets and cartons to retailers will need to be prepared for the world of shipping eaches to consumers and do so economically. This will call for partnerships with service providers, enabling the ‘Uberization of transportation’ and warehousing. Simon advocated that traditional metrics such as on-shelf availability (OSA) will need to be augmented with the likes of online availability (OLA). He gave examples of how large companies are acquiring digital startups. L’Oreal’s acquisition of NYX cosmetics, Walmart’s acquisition of Jet.com, and Unilever’s acquisition of Dollar Shave Club were all cited as examples of how learnings from the acquired entities are being applied to the acquiring companies’ DTC capabilities.
6. Beefing up the bottom line while saving the earth
James McCall of P&G shared how his company was able to save US$2 billion in ten years by investing in the ‘circular economy’ wherein the waste produced by their operations is used as raw material for making other products instead of leaving it to the landfill. Here are some examples he shared:
- Surfactants from shampoos were recovered and converted into car wash solution
- Plastic shampoo sachets in India are now being recycled into building panels
- In China, cake derived from the waste water sludge from Pantene and Head & Shoulders is being used as raw material to make bricks by a local company
- Absorbent materials from feminine care products are being turned into industrial spill containment fabric
To influence the culture change in the organization, he said the organization now refers to waste as ‘assets to be recovered’. Co-presenting with James was Pam Fitzpatrick of Gartner who said that such initiatives are gaining traction with the boards of corporations who are viewing them as investments in resource efficiency. A win-win proposition for corporations and the environment alike!
7. Blockchain, cloud, mobile, and familiar faces
Beyond the aforementioned topics and supply chain insights, Blockchain was talked about but not as much as I expected. Not totally surprising though, as this tends to be a more dominant topic these days in life sciences or food industry specific forums due to trace-ability and regulatory requirements. Another general theme was that not one company can do it all in enabling a true digital experience for consumers. Ecosystems will need to be formed across makers, movers, and merchants of physical goods, and technology providers. Cloud and mobile technologies will be pivotal to powering such ecosystems. Besides all the learnings, Gartner supply chain events provide a great venue for reunions and reconnecting. I could not walk more than twenty steps at a time throughout the conference without running into someone I know of from the past. The hairs have turned grey and the hairlines grew thinner in some cases. There sure were more wrinkles on the faces. But the warmth and the friendly nature was intact. In all cases, we were able to pick up the conversations from where we left them years ago without skipping a beat. Yet another reminder of the power of humanity, which the machines are yet to replicate!