Gartner recently augmented its supply chain transformation study in 2021 to examine drivers, best practices, challenges, enabling technologies and benefits. In a Gartner blog post from Michael Dominy, he concluded, “Building and improving capabilities to drive improved resiliency and other benefits takes time — about three years — but can drive significant benefit, on average 32% improvement in supply chain performance.”
While the time to complete transformation is a multiyear effort, I firmly believe it’s an endeavor well worth the effort. Therefore, to help you on your journey, I thought it would be an interesting exercise to develop a list of the top ten core capabilities needed for supply chain digital transformation success. I’ve organized the capabilities into five key areas.
Top 10 Capabilities Needed for Supply Chain Digital Transformation Success
Key 1: Align to Strategic Forces
Supply chain digital transformation takes on average 2.9 years, focusing on the strategic changes needed to satisfy the strategic changes you are seeing in your marketplace, company or technology. Capabilities to focus on to enable a strategic approach to transformation are:
A dedicated team to document both current and future forces driving the transformation or estimated changes that will affect the supply chain.
Strategic thinkers who can visualize the supply chain of the future that will be able to satisfy the estimated requirements and take advantage of key opportunities.
Key 2: Target the Right Benefits
Having a clear vision as to how life will be once the supply chain digital transformation is complete is vitally important. Once that vision is defined, explaining the benefits from the outcome to the C-suite will help gain the engagement and cooperation needed to drive the transformation project to completion. Capabilities to ensure the targets are well defined and communicated are:
Team members with resilience and clarity of vision to clearly express the value and goals of the supply chain digital transformation.
Quantifiable targets for the completion of the transformation (i.e., the value of the return on investment from the project).
Key 3: Assign the Right Leader
Any project as broad and lengthy as a supply chain digital transformation requires a leader that has the support and confidence of the C-suite. Critical capabilities of the leader of the transformation are:
5. Ability to select a team capable of completing the project rather than using the resources that are simply available.
6. A willingness to delegate the needed decision-making to the team.
Key 4: Identify and Overcome Your Top Challenges
There are guaranteed to be times when the project loses steam and starts to falter or runs into obstacles that threaten the supply chain digital transformation. Take the time to catalog the challenges, both to the supply chain and to the completion of the transformation project. This will give the team time to prepare and build resilience strategies to address the issues. Capabilities needed in this key area are:
7. Ability to collaborate with adjacent teams to gain insights into their estimation of the key challenges, document them and build strategies for remediation.
8. An agile and flexible approach to ensure challenges are addressed.
Key 5: Use Both Internal and External Resources
Transitions are difficult and solely using internal teams often leads to time constraints and incomplete efforts. Most successful projects use some external resources to take the load off the core team when required. External resources can also provide a fresh view of the supply chain digital transformation and offer insights that are not clear from a purely internal view. Capabilities for both internal and external resources that you may lean on to help are:
9. Experience and expertise tightly relevant to your business and your transformation project.
10. Resources with sufficient technology vision to offer insights around both supply chain and the digital elements of the transformation.
The Road to Supply Chain Digital Transformation Success
In conclusion, supply chain digital transformations are driven by company-wide collaboration and technology. Leaders of transformation must prioritize strategy wins over tactical ones. Digital transformations require full-time staffing resources and may need external resources for support. Be prepared for resistance to change by decision-makers — not employee resistance or mistrust of new technology —as that is most likely to be your top challenge to overcome. Best of luck!