BY MICHAEL POWER
GOING DIGITAL GLOBAL EVENTS HAVE ACCELERATED SUPPLY CHAIN DIGITIZATION EFFORTS Some aspects of supply chain management stay constant. Disruption, uncertainty and the need for agility all remain among the top priorities of those in the field. The COVID-19 pandemic and, more recently, war in Ukraine, are examples of how events beyond our control affect those supply chains. What has evolved is the ability to deal with these challenges. Technology and digitization playing a key role in that evolution. Supply chain leaders realize this. In the most recent Key Issues Study from The Hackett Group, enterprise digital transformation jumped to the top priority for 2021 among supply chain executives who responded to the study. Over half (53 per cent) of respondents reported having a major digital transformation initiative on the enterprise
agenda. As well, 65 per cent of these companies have accelerated their digital programs since the pandemic began in 2020. “You look at these issues over time, there have always been disruptions – there has definitely been more, but there have always been disruptions,” says Richard Lebovitz, CEO of LeanDNA. That said, the need for digitization wasn’t as strong previously. “People were very happy working in the war room with spreadsheets.” The remote working that sprang from the pandemic has shifted organizations to operating much more online, Lebovitz says. While many organizations initially resisted digitization, many have been forced to adapt. The pandemic has influenced this shift towards the digital. So too has growing product customization and configuration, he says. For example, two decades ago, an aircraft mainly had to be safe, efficient and good quality. Now, onboard electronics, seat configuration and other factors also play a role in design. “The other trend is just the globalization of supply chain, where you went from a factory making everything from beginning to end, to where now there’s a lot of tiers and global suppliers all over the world,” Lebovitz notes. Both the fourth industrial revolution, or Industry 4.0, and the pandemic have catapulted business further into digitization, says Maria Greaves-Cacevski, senior category sourcing lead at Chemtrade Logistics. Organizations are looking to reduce complexity while optimizing everyday tasks through technology. IT projects that were previously viewed as an expense are now seen as essential. Complexity arises from trying to break down silos within an organization so that processes run seamlessly from start to finish, she says. Understanding the chal-
lenges that team members and stakeholders face helps to avoid putting undue pressure on them and minimizes the creation of new, smaller problems. Digitization can also help to optimize other areas like supplier risk analysis, Greaves-Cacevski says. “We’re able to put information in real time and disseminate it to our key stakeholders so that they can make the best decisions on where to source or where there is alternative sourcing,” she says. Several areas of technology investment have accelerated in the past two years, due to the pandemic and, more recently, the crisis
in Ukraine, says Josh Nelson, associate principle at The Hackett Group. Those events created a combination of demand shocks and supply disruptions – airport closures, manufacturing facilities and transportation systems shutting down while consumers bought more household supplies. “What companies were looking for at that point was, ‘how do I do business processes quicker? How do I become more agile?’ That’s where a lot of the digital investment came in,” Nelson says. “If you have the right tools to do the planning and for visibility, you can really turn plans around much quicker.” SUPPLYPRO.CA 7
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