In the complex world of global supply chains, the most important component turns out to be people who have the tools and the permission to do the right thing. A recent article by Genpact highlights the importance of humanization in problem-solving within the supply chain.
The Current State of Supply Chains
Supply chains today have evolved piece by piece, according to need and not because of an overarching plan. Functional silos were hardened as technology companies developed new applications/modules that solved a tactical need with no regard for an overall integrated architectural landscape. As a result, these systems — and the functions they support — operate in silos. They don’t communicate with one another, and they don’t enable timely decision making.
The Impact of COVID-19 on Supply Chains
The COVID-19 pandemic revealed the world’s supply chains to be inflexible and fragile. Companies realized that they had limited insight and influence into their suppliers’ operations upon which they had become so dependent. They realized in many cases, that strategic sourcing decisions focused on cost had reduced any redundancy or flexibility in their supply chain network; thus, making it infeasible to adjust on the fly and respond with agility.
The Future of Supply Chain Operations
As we continue to recover from the disruptions that commenced with the pandemic, global enterprise leaders across the world are looking for new strategies in re-envisioning their future supply chain operations. Companies must step back and assess how they want to orchestrate the extended value chain and what levels of control and coordination they want to have through the extended supplier network up to the end customer.
The Role of Digital Technologies and Analytics
Investing in digital technologies and analytics to predict, stimulate, and recover from a myriad of disruptions, spanning geopolitical shifts, customer dynamics and macroeconomic demand, as well as ESG initiatives, and changing demographics is crucial. They must make sure the organization is aligned to operate as a single enterprise and this starts with leadership alignment on a balanced scorecard, understanding that traditional KPIs are inherently in conflict.
The Importance of a Single Source of Truth
Creating a “single source of truth,” and establishing a common platform of engagement are essential in providing visibility, cross-functional coordination, and trust across the enterprise. This sets the stage for success, but more is needed: executives and company leaders across functional units must be empowered to be executioners of the enterprise’s strategy.
Empowering Leaders in the Supply Chain
Challenging cross-functional trade-off decisions cannot always rest at the feet of the C-suite. That means that when an empowered resource within a functional team identifies a disruption, he or she can make a call that the other functional teams will respect, support, and execute. This empowerment is crucial in creating a resilient supply chain that can meet growing demands for sustainable methods built on circular principles.
The Cultural Transformation in Supply Chains
This cultural transformation has three essential tenets. First, executive leadership must establish a clear strategy for the company and the company’s role in the larger community. Second, leaders must empower team members to take decisive action without fear of repercussion and drive out dissension across functional teams. Lastly, enterprises must invest in the tools and the technology required to give team members confidence to act and to bring visibility and trust across the entire extended value chain.
In the end, the most important component in problem-solving within the supply chain are people who have the tools and the permission to do the right thing. They will be the indispensable conductors of the new supply chain.