Martin Weis is a partner at McKinsey & Company, with over 18 years of experience leading large-scale transformation projects at multinational organizations. Find him on LinkedIn here.
We live in the world of the global supply chain. This can have the benefits of better costs and broader variety, with even construction businesses in the United States acquiring materials from abroad for example. But there is also a greater risk for disruption. When pandemic lockdowns reduce production capabilities, or border controls are more stringent, or a boat holds up shipments through the Suez Canal, organizations experience firsthand how critical it is to have resilient supply chains.
In my work consulting with supply chain leaders at large global organizations for over 18 years, I have helped organizations build out this resiliency for how to optimize supply chain processes. One of the most common problems I see is that many critical processes are living in manually-managed spreadsheets. And when there is disruption, organizations don’t have transparency into their data when it is stuck in spreadsheets in legacy systems. Because of that, organizations can’t make informed decisions about how to react.
So to become more agile and to be ready for whatever change may come, organizations better have options. And one way to build in those options is to incorporate the right supply chain management tools that can serve users across your entire business and make your supply chain disruption-proof. Here is how I define three major needs for resiliency, and the types of technology you can bring on to build a resilient supply chain.
The control tower: infrastructure
To effectively build innovative, agile capabilities with supply chain management software, you have to start with a strong initial infrastructure. We view this as a supply chain “control tower.” This control tower is a technology-enabled way gain visibility into key data and insights – production levels, inventory levels, and more. You can envision this as a dashboard that all users have at hand.
Combining multiple views in one individual system and central workflow will allow organizations to see all of the critical information. This not only brings about end-to-end visibility, but also allows you to plan in advance for potential scenarios and disruption.
The guardrails: data governance
The next step is that you need to build the right capabilities for data governance. This is the guide you need to maintain your governance. If you go on a hike, for example, you need a map to guide you on where you get water, how to find the right trail, and how to get to the peak. With this “map” of data governance, you know how to find things and you know where they come from.
This can be the most painful to implement. Often times data is not clear, or the data you need doesn’t even exist. Finding out what this information is will help determine how to build the right governance capabilities around this data. The right governance tools can avoid data becoming outdated and lost in the shuffle, but also allow you to build the security standards and frameworks to keep your data safe.
The scaling: automation and innovation on the edge
Finally, when you really want to scale and avoid the bottlenecks of manual data input, it’s all about automation. Removing the need for people to enter data and fill in forms will open up the capabilities of your other structures and make your organization ready for change.
Low-code platforms, for example, provide a faster and more agile way to work on small solutions and solve business-specific problems that IT workflow tools can’t deal with. There are great specialized workflow tools for tasks such as invoice posting and expense management, but some needs are so individualized that there is no tool to solve for it specifically. So utilizing a tool like a low-code or no-code platform to build in this automation will allow you to customize and automate effectively.
An additional benefit is to give business uses a solution at hand. With easy-to-use automation solutions, business users will avoid the pitfalls of Excel. Concerns of version history, ownership, and data accuracy are alleviated with IT and business users being more aligned with low-code capabilities.
The right digital tools can build in the processes and the capabilities for your organization to be ready for potential disruption – which, these days, is coming more often than in the past. By building a tech stack around these three pillars, your supply chain will be much more prepared to navigate this uncertainty.