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3 V's of Supply Chain - Part 2

"Thrive Or Die In The New World Order”

By: Art Mesher, CSCMP 2018
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Visibility
Velocity

VISIBILITY

In the surveillance economy, visibility means being capable of shaping demand rather than just fulfilling it. This shaping takes place within an always-on, always-connected environment. Visibility into preferences and incentives to create demand, linked with a transparent lens to see capabilities, capacities and activities, create a new world order in which you can see around corners to what’s next, creating strategic advantage. Knowing what has already happened no longer offers advantage, and is merely table stakes in this environment. We have the internet of things as a model, but we also have resources in motion… (people, conveyance units, assets, documents, and money).

 

Perhaps what is needed then is to have an Internet, not just of things, but of nouns and verbs: people, places and things all interconnecting and feeding real-time information engines that understand actions (verbs) performed by subjects (nouns) and state or place (context of action) to create end-to-end supply chain visibility. In this new surveillance economy, enterprises need to ask one critical question: who owns this data?

VELOCITY

Enterprise systems and their associated processes were not designed for the environment in which we now operate. In the always-on always-connected surveillance economy, data is ubiquitous, but our systems cannot react to this information and are not built for communal process enablement. These will require new business models and architectures. Tactically, we are witnessing a quest for the frictionless transaction, where things simply happen and everyone magically gets paid. Herein lies the dream of the smart contract. Strategically, winning companies will harness velocity and design themselves in a way that allows them assemble and disassemble ecosystems and compete through this dynamic reconfiguration. Achieving this velocity requires a clear understanding of data, data sharing policy, standards and how to extend and connect the enterprise through micro services and federating networks (Stampers, Entrusts and Network curators).

Today, the velocity of our Resources in Motion (people, conveyance units, inventories/assets, documents/data and money) are all still impeded by the status quo. Slow modes of transport, congestion in networks, latency in payments hamper speed. Yet some relatively simple advances can dramatically improve velocity, including Robotic Process Automation in electronic payments and Overnight delivery networks, aerial unmanned delivery, semi-autonomous platooning and hyperloops.

VARIABILITY

Managing variability strategically involves intentional planning around what needs to be standardized versus what needs to be unique. Managing variability tactically means ensuring resilience to volatility. Tension endures between those that wish to standardize everything and those that wish to compete on differentiation. Historically, enterprises have been on a quest to minimize integration liability and reduce complexity, therefore promoting single platform and vendor strategies.

 

But in the meantime, business kept asking for capabilities that enable diversification. As the new world of “always-on, always-connected“ evolved, so did the number of demand-discovery channels. Today, those that learn to maximize their integration ability are the ones who can spin on a dime, rapidly sharing demand creation, inventory planning and executions details. This “big data” environment is creating a factorial increase in transparency (costs, prices, performance etc.) that is redefining the permanence of business relationships and supporting system requirements. In the new world, very little will last forever (or should be planned to last forever) and the best strategies will be based on the agility to dynamically configure and reconfigure partnerships within supply chains (suppliers, customers and logistics service providers).

 

The key will be not to establish relationships, but to flexibly maintain them in a way that guarantees outcomes and insures against failure. The new “permanence” might be best described as doing lots of temporary and/or different things for long periods of time with the same people, as opposed to the old “permanence” of doing the same thing with the same people all the time. This era of pace was predicted by many. We’re seeing rapid commoditization of services with the collision of computing power increases (Moore’s law), network strength and proliferation (Metcalfe’s law) and business evolution towards profitable specialization (Darwin’s law). 

Variability

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