These past few years have not been easy for UK supply chain leaders. In addition to the continued pressure to deliver year-over-year financial growth faster and with less budget, business leaders in the sector are faced with labour shortages, congestion along the supply chain, and a shift in skills and knowledge required in workforce talent. One of the first instincts in addressing these challenges is to implement new technology or integrate a digital solution. In today’s crowded marketplace, it seems like an easy, obvious move. After all, there are hundreds of solutions promising flashy dashboards, easy integrations and a long checklist of features.
However, all that glitters is not gold, and it’s the same for many off-the-shelf (OTS) offerings. Without due diligence, decision-makers may find themselves in a rabbit hole of technology for technology’s sake. This can happen whether the technology is built in-house or OTS. As a result, they may move too far from what the end-user experience truly needs.
To ensure modern and resilient supply chains with increased efficiency or reduced operating costs, business leaders can instead harness technological advancements as part of a wider customer-centric transformation toolkit.
Focusing on the Customer in the Supply Chain
Ultimately, a solution is introduced to add value to a customer. It is important to remember that new solutions aren’t about introducing technology for the sake of it but introducing new capabilities that genuinely impact an organisation’s processes and customers in a helpful way.
Solutions should be chosen and applied with precisely this in mind. Also, your objectives for your customers should be involved from the outset. This way, the whole process of building, developing, or upgrading solutions can be better orientated around a single source of truth — what you are trying to achieve for the end user.
This is especially important to remember when trying to achieve more with less. Introducing new systems is complicated, and this isn’t helped by tight budgets and short timeframes. Keeping your objectives clear and your customer in mind throughout the process ensures that the reason you are undertaking this task doesn’t get lost behind the inevitable complications that will arise.
To Build, Buy or Reuse
When approaching technology and solutions, one of the first considerations is whether to build the solution in-house or simply purchase it from an external vendor.
Both have their merits. Building technology or a specific tool in-house offers a team the chance to fully customise and seamlessly integrate it into existing systems precisely the way they want and need. This is ideal when an organisation has the resources, budget and risk tolerance to develop something from scratch. Buying pre-built is more suitable when finding a cost-effective solution is the priority. Technical support and maintenance are usually provided on an ongoing basis, which can be particularly useful for smaller organisations.
However, both also have their pitfalls. Building in-house is a heavy, costly and time-consuming exercise, stretching resources thin and adding pressure to already diluted teams. Purchasing OTS solutions may seem convenient but could lock organisations into costly subscriptions over time and with volume.
Sometimes the best solution is one that already exists. More often than not, a company or team already uses some kind of application to achieve its goals, and, crucially, software can be upgraded. Legacy systems are often considered old or outdated, but upgrading them instead of replacing them can come with a number of advantages. For example, upgrading an existing system comes with the benefit of familiarity; the team knows how to use it and you can save on the costs of onboarding teams or whole organisations onto new tools.
For many companies, the best option is a combination: a tried-and-true solution that can be customised to meet specific requirements.
The best of both worlds
Taking supply chain management as an example, the use cases for a new digital platform are common across businesses, even if they are in different sectors. From real-time collaboration on data to predictive analytics, the objective is to take previously siloed data and produce one source of truth that provides transparency and the ability to make good decisions.
The underlying technology to solve these cross-industry problems already exists. The best of both worlds can be achieved by using pre-built systems. These can be easily integrated and offer extensive build-on capabilities.
When implementing any new technology or digital solution, decision-making should be customer-led. Often, however, businesses find themselves adapting to the product’s limitations. This probably means the value they were looking to add in the first place will not be realised.
Agreeing on the value-add for the supply chain
Regardless of the solution, businesses must answer one important question at the very beginning. “What is the value-add we are going to achieve?”
When this is not clearly defined, project scope can quickly be lost.
It is crucial to clearly define the added value that any new technology will bring to the business. This involves identifying the specific problems the technology will address, the expected benefits and how these will contribute to the organisation’s overall goals. By understanding the value-add upfront, organisations can ensure that their technology investments are aligned with their strategic priorities. This in turn makes it more likely that they can deliver a tangible return on investment.
To agree on the value-add means first understanding the use case that will deliver a measurable benefit to the business. In my experience, this comes after bringing together stakeholders, sometimes over the course of a few days, to discuss and scope out the use case in its simplest form. This might, for example, be gaining visibility on an order when it is in transit. If this value proposition can then be demonstrated to benefit the business, whether that’s by automating processes, improving data-driven decision-making, or even reducing operational expenses, there is a solid use case from which to start a project.
Commitment is key to any kind of digital transformation. They are not short projects, but equally, they don’t have to be overly complex. Focus on the value added to keep on course.
Achieving resilience
The COVID pandemic demonstrated that supply chains are not resilient enough. Recently, the appetite for digital transformation in the supply chain has come from the need to future-proof businesses.
However, too many projects have been conceived without a clear goal and become bloated and cumbersome due to ineffective management. The debate over whether to build or buy is worthwhile. Nevertheless, the first answer you must find is where value will be added to the organisation.
