Supply chain executives agree that future supply chain performance will rely to a great extent on talent. A continual focus on improving the current workforce and attracting new talent must be the new mandate for supply chain executives.
The supply chain is in the midst of an evolution. Digital technologies hold the potential for increasing competitive agility by dramatically changing how businesses design, source, make, move and service products. Most executives understand how essential these changes are to the business and 85% of supply chain executives are already working to introduce new digital capabilities into their operations.
Supply chain "digital trendsetters" — top performers in terms of both profitability and revenue growth-are already transforming their linear operations into digital supply networks that are more connected, intelligent, scalable and rapid than traditional supply chains. These networks enable people and data—as well as materials, products and supplies—to work together across the extended enterprise to meet business objectives. Consider how these trendsetters are raising the bar:
- Trendsetters are designing their supply chain operations around the intersection of suppliers, products and customers. Unlike digital followers, who say that giving customers a unified experience remains their primary supply-chain objective, trendsetters strive to deliver a tailored customer experience: highly individualized, focused products and completely customized services providing buy-anywhere, collect anywhere, return anywhere capabilities via flexible channels.
- Trendsetters are leveraging the full spectrum of digital technologies, investing in analytics, mobility and Cloud. But they also take digital further than digital followers by investing significantly more in the higher-order digital technologies that facilitate hyper-flexibility like Artificial Intelligence, the Industrial Internet of Things and intelligent products.
- Trendsetters are leveraging their digital investments to build new levels of collaboration-well beyond their four walls. Unlike digital followers, whose focus remains on enabling collaboration among internal functions, trendsetters' ecosystems encompass all stakeholders, including start-ups, in a broad, fluid and proactively managed network.
The companies that are doing digital differently are transforming their supply chains into superfast, digitally disruptive, hyper-flexible and highly collaborative enablers of superior customer service and profitable enterprise growth. The supply chain talent pool is greatly impacted by this transformation. Different generations of workers are entering and exiting the workforce amidst a rapidly changing technological landscape. To succeed in this new environment, companies need to ensure that the right talent and culture is in place to drive effective execution of these new digital supply networks.
Supply chain talent, the key to future performance
Research from Accenture Strategy shows that 90% of supply chain executives agree that over the next three years, supply chain performance will rely to a great extent on their supply chain talent. A continual focus on improving the current workforce and attracting new talent to drive innovation, efficiency and productivity must be the new mandate for supply chain executives.
A key component of that mandate is enabling the supply chain workforce to move beyond traditional roles and responsibilities. With a growing demand for deep digital and technical experience in supply chain processes, the workforce must be comfortable with data-driven decision-making and have a complete understanding of true end-to-end supply chains. In this new environment, supply chain executives have an unprecedented opportunity to drive a deep shift in supply chain operational performance by building the future workforce. Leading companies are already capitalizing on the promise that this future workforce offers.
Humans + machines = The multiplier effect
Over the past decade, basic automation and analytics, coupled with the widespread adoption of enterprise resource planning (ERP) and Cloud computing technologies, have improved the operational efficiency of supply chain processes. Now, digital technologies like artificial intelligence (AI), robotics and predictive analytics are expanding that efficiency even further. And the future supply chain workforce will need workers who are highly engaged with digital. They need to be able to flourish in a future augmented by new technologies in a way that drives real business value in the form of productivity, new talent acquisition and retention, as well as innovation and creativity.
Research shows supply chain executives expect robots, together with AI and the forecasting power of prescriptive analytics, to have a significant impact on the supply chain workforce's responsibilities and tasks. In particular, the collaboration between humans and machines will create new sources of value. Most executives (65%) expect the combination of technology and humans to enable more forward looking and strategic decision-making to support business goals.
Take robots, for example, which are playing an increasingly significant role in the supply chain. One retailer has empowered its fulfillment centers by using robots to bring products and racks to workers, which reduces the processing costs of an average order. Beyond the factory floor, robots are now supplementing and augmenting human roles in such knowledge-intensive areas as supply chain planning, customer order management and inventory management. Robotic process automation (RPA) is enabling companies to reduce costs and improve performance by using software to automate routine tasks like data collection and aggregation. By enhancing and extending human cognition and capabilities, robots are already driving greater operational excellence. In time, robots also promise to deliver significantly better business outcomes by harnessing the power of artificial intelligence and using prescriptive analytics to help people re-frame how crucial business decisions are made.
Another important technological advancement in the supply chain-prescriptive analytics-delivers critical business insights in a fraction of the time that it takes humans working alone. They also reduce the scope for human error and thus improve compliance. In fact, prescriptive analytics, which not only anticipate what will happen but also suggest options to capture opportunities and mitigate risks, can be applied across multiple supply chain areas to enhance the chances of human planners achieving optimal outcomes. For example, companies expanding across markets could use advanced network modelling techniques to evaluate multiple configurations and determine optimal routes, markets and product selection. To leverage the power of prescriptive insights and improve dayto-day operations, companies should also adopt collaborative sales and operations planning. This technique connects statistical forecasting methods for demand planning with rough-cut, multi-level supply planning. These in turn help to determine the right amount of inventory, achieve targeted service levels and boost productivity.
As routine tasks become automated, humans can focus on more decision-intensive activities. Consider a big chemicals player with more than 1,000 employees in its central supply chain function. By automating transactional activities like import/export management, customer order management and outbound transport management, the company can free up more than 50% of its workforce's time, and reallocate employees to focus on other tasks.
For humans, this concept of digital and new technologies liberating the supply chain workforce heralds an exciting freedom to focus on what people do best: the abstract thinking and contextual reasoning that still eludes machines. Though some jobs will change, new, value-enhancing roles will emerge-roles that may not have even previously existed. With change occurring at an unprecedented pace, it is more important than ever that supply chain workforces are continuously trained and educated on the latest processes, techniques and technologies. Organizations that ignore this basic prerequisite risk being left behind in an increasingly competitive environment.
Finding the "intrapreneurs"
As technology improves human productivity, such uniquely human qualities as judgment, empathy, collaboration and persuasion will increase in importance. According to Accenture Strategy research, more than four in five supply chain executives (87%) believe that digital advances will drive major changes in the supply chain job mix over the next three years. To compete, human workers will need to move well beyond their traditional roles and skills as efficient order takers and function increasingly as internal entrepreneurs, or "intrapreneurs."
Intrapreneurs are dynamic innovators who can proactively identify growth opportunities and manage the risks associated with them. One critical role ripe for intrapreneurship is supply chain demand and supply planning. Sixty-five percent of business and supply chain executives anticipate that advances in analytics will enable planners to make more forward-looking, strategic decisions and spend less time on reactive problem-solving. Executives also envision planners moving into category, or segment, roles that reflect an end-to-end business focus.
Over the next three years, other top emerging supply chain roles will reflect a similar focus on profitability and performance improvement, as well as strong analytical skills that can leverage the algorithms and advanced simulations powered by AI and prescriptive analytics to create new value for the business. These roles include process improvement managers, business development leads, risk managers and data scientists.
Advanced technologies will be needed to support the human intrapreneurs tasked with driving future innovation and growth. Although still evolving, some of these technologies are already available and leading companies are beginning to deploy them in support of specific supply chain strategies. The most promising opportunities for value realization will align operational goals-such as reliability and efficiency, or speed and flexibility-with customer characteristics and business objectives. Targeted investments can then be made to increase the competitiveness of the supply chain.
Now is the time for change
Automation of routine activities like data processing and cleansing is low-hanging fruit: a good place to start, but not to finish. Some 46% of supply chain executives anticipate more automation of daily transactional activities and exception handling. But the real value comes from leveraging technologies to drive innovative supply chains that support growth by offering new products and services to customers-particularly ones that are customized to their preferences and needs. This is the primary business objective for 54% of supply chain executives in the next three to five years. The human workforce is a crucial element in meeting this objective.
Above all, the supply chain needs to be standardized, stable and reliable, and operate in a highly cost-sensitive business environment. For instance, a commodity chemicals player can drive significant value from basic analytics pertaining to statistical forecasting, inventory control and transport consolidation. However, when flexibility and speed are paramount-a downstream chemicals player offering engineered and customer-specific products, for example- advanced AI with the power to predict, prescribe and shape demand is especially necessary.
Faced with increasingly demanding customers across a variety of markets, the smart money is on running multiple types of supply chains across businesses simultaneously. That means not only efficiently operating either a stable or flexible supply chain, but one that adapts as needed to support personalized, differentiated services. Investing in talent and technology to manage this complexity, while providing seamless service to the customer, is at the heart of the deep shift in supply chain operational performance now underway.
Positioning for success
Integrating AI, robots and prescriptive analytics into the supply chain workforce today will allow companies to better capitalize on these revolutionary technologies tomorrow. The following three recommendations are a good place to start:
(1) Attract the future workforce. Companies need to ensure the workplace reflects the ethos of the new supply chain. The demand for multitalented professionals is only going to continue to grow. To meet that demand, companies need to focus on training the current workforce and keeping employees engaged. Mobility, technology and collaboration tools need to be integrated into the training process and everyday employee functions, and executives must reinforce new behaviors and mindsets throughout the talent development lifecycle.
To fill the roles of the intrapreneurs and innovators, companies need to identify exceptional talent within their organizations, including people who may never have considered a career in supply chain before. Individuals from other parts of the business can be enormous assets to the supply chain function, bringing new thinking, strong analytics skills and innovative ideas to increase efficiency and productivity with digital technologies.
Companies should also put a strong emphasis on recruitment efforts to consistently find new talent that have the digital skills required. Faced with a graying workforce, companies need to uncover opportunities to attract and retain the next generation of workers. The industry needs to come together to promote the positive aspects of a career in supply chain, not only to new graduates, but also to employees outside of supply chain.
Another important part of attracting and retaining the future workforce revolves around viewing performance metrics and career advancement through the lens of technologydriven innovation. Employees need to see the potential that a career in supply chain offers and be rewarded accordingly.
(2) Extract the robot from the human. Implementing robotic process automation software that automates routine tasks traditionally performed by humans is a quick way to reduce costs and improve performance. Supply chain executives need to start prioritizing and defining the immediate RPA opportunities in their organizations. The first place to begin is with the most routine and transaction-focused activities, based on specific roles and tasks. An RPA "bot" can execute well-defined processes like data entry and aggregation by acting like a super-efficient human that can work 24/7. Furthermore, leveraging analytics, cognitive equipment and smart apps provides the right information for decision-making, while seamless human-machine interactions increase operational efficiency.
Once those tasks are automated, the focus needs to shift to redirecting the "liberated" human worker to focus on the customer, service level promises and new products and services. And digital technologies can inspire and abet humans to uncover innovations in design, operations, and customer relationships.
(3) Place your innovation bets. Companies know that investing in new technologies that will enable the current workforce to drive innovation and promote a flexible, efficient supply chain is essential, but many don't know where to begin. A good place to start is by mapping opportunities to existing technology solutions according to their maturity and availability (e.g., explorative vs. ready-to-implement). They can use multi-echelon inventory optimization technologies that are already on the market, as well as techniques like game theory and non-linear or stochastic dynamic programming. These technologies incorporate complex algorithms to help optimize planning. The first step is to start exploring the potential of these specific technologies. Talk to their inventors and consider implementing pilot programs to test how they work within your supply chain. They key is to think big, but start small. Once the pilot programs are showing ROI potential, take the leap to invest further in the technologies that show promising results.
Significantly better supply chain operational performance lies ahead—and what a shift it will be. However, a new perspective and workplace dynamic will be needed to fully realize the benefits. Digital technology has the power to drive a convergence of supply chain elements that can help companies capture huge savings and competitive advantage. The process starts with leveraging digital to inspire new ways of thinking and working, and by enhancing visibility, collaboration and innovation across workforces. Supply chain employees are at the core of this shift. The leaders of tomorrow are re-imagining the supply chain workforce for the digital era with the goal of transforming it to meet the needs of this new digital business.
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Michael A. Meyer is a managing director at Accenture Strategy with more than 20 years of experience in consulting. He is located in Munich, Germany and can be reached at michael.a.meyer@ accenture.com.
This article was written by Michael Meyer from Supply Chain Management Review and was legally licensed through the NewsCred publisher network. Please direct all licensing questions to firstname.lastname@example.org.