The supply chain has embraced the digital age. Increasingly, cloud-based applications are helping organizations connect people, process, and technology in ways that make the supply chain a strategic differentiator. By minimizing costs, driving business performance, and focusing on enabling the organization to get products into customer’s hands, the supply chain can drive operational agility.
As supply chain goes from being considered a cost center to taking center stage, it’s important to think carefully about how to leverage available resources to best advantage. We sat down with Nick Candito, CEO and co-founder of Progressly, which offers a cloud-based Operational Performance Management solution, to ask about bringing how organizations can claim operational excellence.
EBN: Increasingly supply chain and procurement are getting a seat at the table, recognized as a strategic part of the operation rather than a cost center. What advice would you give organizations who want to leverage operational excellence in supply chain? Where can they start?
Candito: Efficiency, quality, and cost savings are constantly top of mind for organizations looking to optimize their supply chain. When manufacturers hear technology terms like “digital transformation” they approach it from a practical standpoint: how is this going to improve my operations?
Digital transformation must have a purpose (and that should be to increase efficiency, quality, and cost savings). Otherwise, it’s just a waste of time.
At the same time, manufacturers are struggling to keep up with the increase in volatile customer demand. Processes and supply chains must be adaptable enough to turn on a dime. This doesn’t happen if everything is done manually, in Excel spreadsheets, or in transactional systems that don’t talk to each other.
The idea of capturing data, automating manual processes, and enabling information sharing then becomes imperative. In other words, digital transformation is not such a waste of time since it allows for visibility into operations—across the entire organization including plants located around the globe.
The first place organizations can start is controlling the shop floor. The shop floor is where there is access to production information, inventory, quality data and the ability to help the operators and suppliers digitize paper processes so they can be more efficient. And, beyond the shop floor, suppliers, customers, and employees should have instant access as appropriate to the data they need.
EBN: By focusing on operational excellence, organizations can expect some key benefits. What are the main benefits organizations can expect? Are there any less obvious benefits that an organization might achieve?
Candito: Most companies implement OpEx in a top-down manner. However, the entire organization has to be on board for OpEx initiatives to be successful. More often than not, organizations have little or no attention for feedback coming from the shop floor. In such cases, employees and first-line-management can quickly switch from a cooperative “Plan/Do/Check/Act” mentality towards a passive “I’ll only do what they have told me” mentality.
EBN: How can organizations measure the benefits of operational initiatives? What results might they reasonably expect?
Candito: It starts with strategic alignment, which typically fragments when executives are disconnected from day-to-day operations. As we’ve found in working across industries like Energy, Chemicals, and Manufacturing, when the right (completely self-service without IT and intelligent around data) operational framework is rolled out, the expectation is that it will immediately save your teams a day a week. This is based on how long it takes to collect paper, translate data to a standard format, and route across your location – never mind if regulatory or regional/corporate oversight is needed! As part of how we’ve thought about defining cloud Operational Performance Management, that 20% productivity boost is just the start. Real-time reports and insights, along with a unified way to take action on data (i.e., coordination back with anyone not in front of a desk) makes it so you can measure and improve anything, really.
EBN: How do you see the types of operational initiatives that organizations are pursuing evolving? What’s the next frontier for improvement?
Candito: There isn’t a chief operating officer (COO) in the world that would publicly stand against the benefits of web-based software as a service (SaaS), and with that, moving away from “point solutions” that require multiple on premise databases for each site location they oversee. Operational excellence is critical to the long-term success of these companies and major industries driving our economy. We’ve already seen this initiative become a rallying cry with more millennials driving decisions and an aging workforce coming up on retirement. The next frontier will require a solution that’s rapid to deploy, easy to use, scalable at a global level, and fully integrated with the enterprise architecture of today’s leading organizations.
— Hailey Lynne McKeefry, Editor in Chief, EBN