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The Future of Supply Chain Management: Benefits of Digital Supply Chain to the C-Level

The future of the supply chain is now; just track leaders in the supply chain space and you will see common denominators and measures of what supply chain capabilities have delivered to the business in real growth terms and how they sold the change to the C-level. Supply chain leaders can measure the actual performance contribution that supply chain made to the business; laggards can’t and tend to measure cost reduction and efficiency in isolation and silos. 

Therein lies the challenge of effectively selling and proving end-to-end supply chain transformation and supply chain value to C-level executives. Supply chain performance benefits must be holistic, realistic, quantifiable, accurate, and articulated in measurable business value terms. 

What makes “leaders” deliver business value from supply chain results?

You will find that the traditional supply-driven supply chain functionally was (for leaders) and still is (for laggards), siloed, project-driven, and focused on taking out costs and improving efficiency of the business assets year-over-year. Supply chain leaders see this differently; but, this is what most executives traditionally associate with supply chain strategy, purpose, priorities, and value.  When communicating benefits and value from supply chain to C-level executives don’t fall into reporting traditional silo based supply chain value. This may require some insightful education.

The contrast is, today’s supply chain leaders are focused on transforming traditional supply chains to an end-to-end business operating model founded on the end-to-end supply chain. Leaders are still looking to reduce costs and improve efficiencies while also supporting business growth and innovation across the company. When companies communicate value, it’s important to ensure they’re making this mental model shift and can explain their rationale. This is a key part of selling supply chain transformation value to the C-level.

Here’s the key messaging to express to the C-level:

  • The supply chain of the future is end-to-end and cross-functional; starting with the demand of the customer, and translated into planning priorities and execution of the supply (not vice-versa).
  • This transformation is a journey that is led by the business and focused on achieving the company’s strategic imperatives (for example: acquisitions, new markets, and products)
  • This capability is enabled strategically by technology, (for example, digital disruptors like IoT, use the cloud as an overarching end-to-end supply chain architecture), in some cases, technology can even be a differentiator.
  • Don’t let the story be a technology driven benefits story.
  • Metrics and measures must be balanced and integrated across business and focused on achieving agreed customer service levels, not just achieving individual functional and departmental silo metrics. Seen in isolated pockets they don’t necessary add up to increasing customer service levels because they are often disconnected. Cost reduction can quickly cause reduced service levels and quality issues if disconnected. This is nontraditional thinking and will have to be explained when communicating value derived from the supply chain.
  • There must be a focus at all levels of leadership to quantify and reduce complexity in the business. In supply chain transformations business executives are very wary of adding complexity and not value. 

When businesses understand the importance of an end-to-end view of the supply chain, there will be a better chance of communicating business value to the C-suite.It doesn’t end there. The key to executing change, is to cross functionally align bottom-up to all the business functions. This will allow for performance improvements leading and managing change.

Surprisingly, many businesses are still stuck in their traditional supply chain models and capabilities. No one in the business has been able to show and tell the story of a transformed supply chain capability to the C-suite in a way that shows the measured business value from digital supply chain. The hardest part, is to explain the growth story in a manner that rallies the business leadership to future and ongoing supply chain development and change.

Learn to tell the value-add story to the C-level

Most leaders should articulate to their organizations what changes are happening within their organizations, and what the implications are. If the supply chain transformation and value message is shallow or general from a value perspective, then it is unlikely that the leadership team will holistically rally to a try this new technology.

 

The transformation championing team needs to showcase a business solution that adds value. This is the key to getting the C-level on board to lead, manage and recognize the need for the ongoing change. There are a few pieces of advice to building this executive focused transformation and value-added story to C-level executives in a way that rallies the whole leadership team:

  •  Find applicable benchmarks and tell the story as to why they are relevant to support and drive the transformation and value (for example don’t tell food industry stories to an automotive manufacturer without being able to tell the story as to why it’s a benchmark and why it’s important).
  • Take executives to actually see and talk to leaders that have successfully transformed their business operating models and are experiencing the value. Let them ask any questions and understand the answers.
  • Consult credible analysts like Gartner and IDC who will offer research-based advice on best practices, benchmarks and the benefits from digital supply chains. This is very credible to C-level executives and will help add value to your digital supply chain case.
  • Quantify actual value from the supply chain as you walk through the processes from the customer to supply; be specific and accurate. This is the key factor; if not holistically done, then you are unlikely to be able to sell and prove value.

Make sure that your story takes a holistic approach and doesn’t make dangerous assumptions that negate from the business value by leaving out crucial factors or introducing assumptions into telling the C-level what a digital supply chain has done for the business. Always provide a value-added benefits case from the customer back . They may see factors they hadn’t seen being supply driven and may associate business results with supply chain contribution.

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1 comment on “The Future of Supply Chain Management: Benefits of Digital Supply Chain to the C-Level

  1. PaulChau
    August 30, 2018

    Having some sort of software mapping out all of your data points and providing you with some in-depth analysis is really what most managers want right? I'm sure that if you could use supply chain management programs to pull out information like that, everyone from the top to the bottom of the company could benefit from all of that information. What is left to do is find the right program that gives you the information that you want so that you can use it to maximise your business potential!

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