As a general management consultancy, ScottMadden seeks to provide high-quality, objective advice and support to help clients solve challenging problems. The company is renowned for the quality of its services, as well as the integrity of its relationships.
To ScottMadden, clients are at the heart of its strategy. In supply chain, the team simplifies enterprise strategy for supply chain management while identifying opportunities to reduce costs through improved category and inventory management. A recent project that showcases ScottMadden’s supply chain intent was its work with a large, midwestern investor-owned utility needed to improve its supply chain organisation’s strategy, governance, and operations.
ScottMadden
It was revealed that costs were high and the organisation could not provide the strategic direction needed for efficient planning, sourcing, and materials management across the company. This is where ScottMadden came in. ScottMadden were engaged to help articulate one clear enterprise strategy for supply chain management which senior executives could support, drive, and monitor.
Given the disruption that recent global events have caused, it has become clearer than ever before how easily supply chains can be disrupted. Through ScottMadden’s five-step approach, they can partner with companies to develop a supply chain business intelligence tool to ensure its customers have the data-driven insights needed to safeguard their supply chain.
Amidst ASCM CONNECT 2024, ScottMadden partners Jason Davis and Jason Payton reveal ScottMadden’s approach to supply chain management in the middle of technological change and digital disruption.
Would you be able to give me a brief introduction to your role and the company you work for?
ScottMadden: “We are partners with ScottMadden, a general management consulting firm with over 40 years of experience. ScottMadden delivers a broad array of consulting services ranging from strategic planning through implementation across many industries, business units, and functions. In supply chain, we have assisted our clients with improving their operating models and transforming functions in procurement, materials management, and logistics.”
ASCM CONNECT 2024
What is the value of events like ASCM CONNECT 2024: North America? How important is this conference in the supply chain calendar?
ScottMadden: “ASCM CONNECT provides a valuable forum for supply chain professionals to gather and discuss challenges and solutions. One of the many benefits is the ability to learn from organisations and solution providers of all sizes and focus areas. For ScottMadden, ASCM CONNECT is a very important event and will continue to be a focus for us in the future.”
Global supply chain
Given the backdrop of the global disruption over the past few years (COVID, wars, inflation etc.), how would you sum up where the supply chain space finds itself today?
ScottMadden: “It’s well documented that today’s supply chain landscape is marked by increased complexity and uncertainty. The COVID-19 pandemic disrupted global supply chains, revealing vulnerabilities in just-in-time inventory models and overreliance on single-source suppliers, particularly in critical industries like healthcare and technology. Geopolitical tensions, such as wars and trade disputes, exacerbated these disruptions, leading to increased protectionism and the reshoring of some manufacturing activities.
“Inflation and price volatility have further complicated supply chain management by impacting the cost of raw materials, transportation, and labour. These trends have put pressure on profit margins, forcing companies to rethink pricing strategies and cost management. Additionally, climate change and other sustainability priorities have prompted businesses to seek more resilient and environmentally friendly supply chain practices, although these initiatives often come with their own hurdles.”
“Despite this environment, executives and stakeholders recognise that supply chain is a strategic lever for companies. Meeting ever-increasing customer and stakeholder demands in this challenging environment requires supply chain organisations to consider new strategies and practices. Companies are evaluating emerging solutions (e.g., generative AI, advanced analytics), implementing strategies to strengthen supplier diversity, risk management, and supplier relationships, and redesigning processes to improve visibility, agility, and resilience. These improvements will help ensure success and a promising future for supply chain.”
Sustainability
Sustainability is an important item on most Chief Supply Chain Officers’ agenda. Amid government legislation and changing customer demands, is a sustainable supply a non-negotiable in today’s world?
ScottMadden: “Regulations and increasing consumer demand for ethical and environmentally friendly products are major drivers for sustainability. Sustainability is less of an option and more of a fundamental requirement in today’s business environment.”
“Global regulations are increasingly mandating sustainable practices, with regulations targeting carbon emissions, waste management, and resource usage. Failure to comply with these regulations can lead to significant financial penalties, reputational damage, or worse.”
“Customers are increasingly prioritising sustainability in their purchasing decisions. Consideration of sustainability may be more weighted when procuring certain types of materials, services, or for end-users. For example, in the Consumer Packaged Goods industry, customers may be more sensitive to the consideration of sustainability of product ingredients. This shift includes B2B relationships, where businesses scrutinise their suppliers’ environmental and ethical standards. Sustainable supply chains are indeed becoming non-negotiable. In addition to the required compliance with regulations, this transition feeds brand loyalty and, when executed effectively, operational efficiencies.”
Digital transformation
What should CSCOs out there do first? What needs to be considered before starting the gen AI journey?
ScottMadden: “First, ScottMadden recommends clarifying the business problem that could be solved with generative AI. All organisations have a list of improvement opportunities that can be refined into specific use cases. Supply chain organisations should evaluate and prioritise these use cases based on data availability, quality, and business context. Identifying one or two high-value use cases for a pilot is a good way to begin the generative AI journey.”
“Executing the pilot involves forming the right team, selecting the best-fit technology solution, transforming the data, and iterating the solution until the desired result is achieved. Companies can use Pilots not only to deliver on the use case but to also build components of the technology and data infrastructure needed for future pilots or use cases. The key benefit of a pilot, in addition to addressing a high-value use case, is the learning that results from the data transformation and technology configuration. These lessons can be applied to additional use cases, setting the foundation for a robust data structure and enabling the delivery of solutions at scale that build on one another.”
Tech challenges
What are the biggest challenges or hesitations you’re seeing companies have around AI? What should organisations look for in technology to hedge against these concerns?
ScottMadden: “The most common challenge related to generative AI is data security. Generative AI enables relatively easy access to many users, which creates risk for organisations.
“Selecting the best-fit technology for investment is another key challenge. In supply chain, as well as other functions, many technology solutions with AI functionality have emerged, raising questions about what to use and how to deploy, manage, and govern these solutions.
“Determining how to implement a scalable data solution is another major hurdle. The issue of data governance has existed for many years. Investing the required time and resources in data integrity and infrastructure has been a daunting task for many organisations, often resulting in deferred or unsuccessful data-related initiatives.
“As described previously, we recommend executing a pilot to address one or two high-value use cases. This approach provides solutions to important business problems and enables learning that can be applied to other improvement opportunities and used to build a scalable data-driven operating model.”
Future
How can the supply chain industry take that next step and what strategies can be implemented to push the industry forward even further?
ScottMadden: “Supply chain leaders should lean into digital transformation, resilience, and sustainability. A solid approach to digital transformation (e.g., data analytics and AI) will enable resilience, sustainability, and effectiveness. By embracing digital changes early and incrementally, supply chain organisations can ensure a ‘seat at the table’ when enterprise strategies are discussed. Similarly, considering data skills to the Supply Chain workforce will help prepare organisations for an increasingly digital future”
Are there any exciting projects that you’re currently working on or any past ones that you’re proud of that you’d like to highlight?
ScottMadden: “Some of our most recent work has involved using data analytics and AI to help shape materials management strategies, resulting in significant opportunities to drive savings and increase agility and scalability. We have been able to leverage proven inventory management methodologies to identify these opportunities more quickly and efficiently, which enables faster implementation for our clients. We have also applied related techniques to warehouse design and network optimisation. The exciting part is that we are just scratching the surface with these solutions.”
Learn more about ScottMadden here.
- AI in Supply Chain
