Digital transformation is central to most organisations’ strategies today.
On the back of the challenges supply chain and procurement have faced over the past few years, the importance of adopting advanced technologies and new ways of working to scale efficiency is fundamental to achieving success in the modern day world. Manual, paper-based tasks don’t work any longer, AI and automation have quickly become the norm over the past decade. An extension of AI’s arm is generative AI (GenAI), which creates text based on prompts, is creating quite the buzz within the industry and beyond. But Karoline Dygas, VP of Strategic Sourcing and Procurement at Nordstrom, insists there is still work to be done before the full benefits can be realised.
“We are on the very baby steps of our journey with GenAI,” Dygas tells us. “I believe there are a lot of use cases for how it can be used well, but no one has quite cracked how to make it useful at this moment in time. With GenAI, it does require users to input a lot of meaningful data into the tool to teach what it needs to be doing. As we’ve seen, there could be a lot of bias or fake information generated by it. Ultimately, it still requires people to navigate through the noise of what it is bringing. While I am excited about its potential, it’s going to take us a little bit of time to get to the outcomes that people are hoping we could see.”
Managing the supply chain
As part of Dygas’ role, she leads strategic sourcing and procurement for all non-merchandise categories of spend at the luxury fashion retailer Nordstrom. Dygas is responsible for a holistic transformation of the entire service delivery model and centralisation of sourcing and procurement for over $3.5 billion in annual spend for all goods and services that positively impacts the customer experience and company financial performance. Falling into the supply chain industry is a common joke among leaders within the space – and Dygas is no different. She tells us she didn’t grow up dreaming about a career within the supply chain, but fast forward 15 years and Dygas has had no intention of leaving since.
“I fell into the supply chain by complete chance,” she reveals. “Growing up and through my education, I had no idea what supply chain, sourcing and procurement was. But here I am after about 15 years in the supply chain industry. What I really love about the supply chain and what keeps me in this space is the constant change and a little bit of chaos every single day. There’s new obstacles, opportunities and global changes that impact the daily work of any supply chain professional and it’s really engaging and exciting to be a part of that journey.”
“I’ve learned a lot of patience and the importance of not overreacting to things that happen” – Karoline Dygas, VP of Strategic Sourcing and Procurement, Nordstrom
Within those 15 years that Dygas has been involved in the supply chain, the industry has undergone significant evolution. Changes to how consumers and markets are operating are shifting how organisations do business. Leaders need to move quickly to keep up, however, not at the expense of getting too carried away, according to Dygas.
“I’ve learned a lot of patience and the importance of not overreacting to things that happen,” she reveals. “Some people hear one thing and they completely overcorrect and then it goes back the other way. I’ve learned to absorb as much data as I can and make informed decisions based on the available information. That information can change and be slightly different, but the most important thing is to be calm and reach out to the network.
“The supply chain has the most amazing network of organisations and peers and we have the ability to help each other through those game-changing or life-shattering things that might happen. That has been the best utilisation of networks of abilities to come together and overcome those obstacles that we are all facing in the supply chain. I’ve been talking to a lot of people here at Manifest Vegas and we are all facing the same problem. If we can come together and solve those problems, then we can help each other out through anything.”
Technology transformation
Data is one of the most important pieces of the puzzle to get correct in supply chain. Good data allows for better decision making and forecasting to provide leaders with a more accurate overview over their supply chain operations. Accurate forecasts can eradicate incidents of stockouts or overstocking and also identify areas for cost reduction and allow for greater efficiency.
“If data is inputted by a human, there’s a very large chance that there could be something wrong with it,” explains Dygas. “As companies dive into this space, the most important thing is good data integrity practices and a process for how to ensure that the data that you’re inputting is as accurate as it can be, because there is so much ability to enter incorrect inputs. As people say, whatever you put in is what you’re going to get out. The cleaner and more accurate it is, the better results you will have on the analytics that you’re trying to put that data through.”
“Humans like consistency and they don’t like change. You have to make that change really simple, and it often starts with the why?” – Karoline Dygas, VP of Strategic Sourcing and Procurement, Nordstrom
As far as Dygas is concerned, leveraging technology for technology’s sake is not a silver bullet – it will not work. She stresses that if technology is not being used strategically, then it will not be successful long-term.
“First and foremost, what is the business problem that you are trying to solve with that technology? Then you have to combine that with the people and the process component as well as the overall change management of implementing that tool,” Dygas tells us. “You can onboard a new tool, but if you don’t have the people component and the process in place of how that tool is to be used, it is going to fail. Humans like consistency and they don’t like change. You have to make that change really simple, and it often starts with the why? Why is this important? Why do we need to change that process and how will it impact me?”
Future facing
With an eye on the next few years, Dygas believes that the industry is better prepared to meet any potential challenges given the extent of advanced technology tools at leaders’ disposal today.
“I believe we are going to continue to be faced with challenges that we might not have faced before, and it’s going to require us to continue to align our networks to be able to overcome those,” she tells us. “Supply chains have been fighting obstacles this entire time. What’s different is there are a lot of crises and headwinds that are all adding up at the same time. It’s not just one or two events; it’s 100 different things happening at the same time that impact global supply chains. We are going to continue to be resilient, innovative and strategic in how we overcome those issues. But we now have the tools and the technology to help us do it in a much more educated fashion than we have had in the past.
“Without the data and the technologies, it was more of a case of figuring it out however we could, but now we have the analytics to make smarter decisions and be more prepared for what’s coming.”
Find out more about Nordstrom here.
- Digital Supply Chain
