If you Google “digital transformation,” you get over 60 million hits—and a few million of those are related to supply chain management. It’s a journey many people and companies are talking about today, but what exactly does “digital supply chain transformation” mean? And more importantly, what’s required to get started on this journey and successfully reach the desired destination? To get some insights on this topic, I spoke with Adam Compain, CEO of ClearMetal on a recent episode of Talking Logistics.
What is Digital Supply Chain Transformation?
Let’s begin with a definition of what digital transformation really is. According to Adam, “Digital transformation is about becoming a truly data-driven company and taking the steps to access, make use of, and control the data in your company so you can actually control your future and the decisions you make.”
The big question, of course, is how to get started. Too often companies think it starts with buying a new ERP or other enterprise software solution. This stems from what Adam says is the myth many people have that they are so far behind and their architecture is so archaic compared to the competitors in their industry. “That’s simply not true,” he says. “Most companies are using similar applications and architectures.”
This idea that you have to begin with buying a big new ERP or enterprise system is where many companies get stymied because of the potential high cost and long implementation times. But that’s changing. “Enterprise software doesn’t have to be so expensive or such a big project to implement any longer,” says Adam. “With cloud-based software and software-as-a-service, it’s cheaper, easier and less risky to implement.”
What Determines Digital Transformation Success?
Although the technology is helpful, Adam says the real determinate of transformation success is a mindset shift and a willingness to change on the part of management and employees. Technology isn’t a silver bullet. Too many implementations fail because processes don’t change because the same bad data is feeding the new systems. That’s why Adam says companies should begin with a proscribed transformation process.
“The companies that are best equipped to transform, and are already transforming, are the ones that have set up transition initiatives, given people transition titles, and set a budget for it,” notes Adam. “What we’re finding is that it’s not so much the transformation initiatives or positions themselves that are causing the transformation as it is the mindset to transform.”
Another stumbling block preventing some companies from getting started on digital transformation is the need to cost justify the project. Adam recommends companies start with small, achievable steps. He explains that, “Transformation isn’t a linear process. Once people begin to take control of their data and achieve the benefits, it drives exponential results.
Everything from sourcing to last-mile delivery requires use of the data in front of you, often presented on old systems or Excel spreadsheets. Once you can get data that’s clean and can see things like inventory availability and where it’s located, it opens up a whole world of questions you can get answers to. You can have your teams do the same types of work they are doing today, but making better decisions that drive more profitable results.”
What are these “small victories” that companies might start with? What values cases are out there that companies can learn from? And, since so much of the data needed for transformation comes from suppliers and trading partners, how do you get them involved in the transformation process? To get the answers to these important questions, and to learn more about digital transformation, watch the rest of my conversation with Adam. Then post a question or comment and keep the conversation going!