Digital Transformation Pressures Put The Squeeze On Supply Chains

Kristen Chase
Digital Transformation Pressures Put The Squeeze On Supply Chains

Intelligent technologies like artificial intelligence and cognitive automation can help large enterprises coping with modern disruptions thrive

In the post-COVID world, change is the only constant, and it’s happening at a rate that’s never been seen before. These rapid changes greatly affect fast-moving industries.

With the acceleration and pressing need for true digital transformation, traditional planning processes are groaning under the weight of customer expectations. Companies with monthly, quarterly, or even bi-weekly planning cycles cannot keep up with targets that are moving fast.  

Without the ability to adjust their supply chain needs in real time, businesses are simply unable to meet and be prepared for changes in demand. That’s where cognitive automation capabilities come in.

The Evolution of Supply Chain Management

To understand the impact of cognitive automation solutions on the supply chain, it’s important to  examine the evolution of supply chain management, which can be most easily  explained with a comparison to playing two strategy games: Chess and Go.

Traditional supply chain practices can be compared to chess. Players have anywhere from fifteen to twenty possible moves, and are focused on winning the game, with the opening and the ending of the game, along with balance, being the most important goal.

But with digital advances, the supply chain needs to more closely resemble Go, where players can make over 350 possible moves. Decisions are made in the middle of the game, and players are constantly calculating what they’re gaining and losing. Compared to chess, Go is dynamic and situational.  

When it comes to agility in the supply chain, it’s not about winning the game. It’s the question of whether the right game is being played.

Supply chain management hasn’t changed much in the past two decades. Enterprises throw their playbooks, resources, and people at the problems and hope that something happens.

They’re using ad-hoc teams, manual processes,  and all-hands-on-deck responses to drive their agility.

A cognitive automation tool fundamentally drives change velocity. Businesses can achieve exponential scale, growth, and change that are now required to manage their supply chains.

Four Ways to Think About Driving Agility

Planning and forecasting is immensely challenging given the complexity of the world—global disruptions like disease, geopolitics, and natural disasters, and the demands of a rising digitally native generation are only a few of the factors enterprises need to address. Businesses need to move towards the new imperative of agility with Cognitive automation in supply chains.

  1. Businesses need to re-orient from predicting the unknown to mastering the controllable. This means shifting to mindshare, investing in reallocating inventory across their network, and adjusting suppliers in a much faster way. Cognitive automation is prime for these processes, with automation and augmentation.
  1. Businesses need to focus on digitizing scalable, repeatable decision making processes. It’s imperative that businesses determine what decisions are being made on a regular basis that can be digitized. Using cognitive automation means decisions are made in real-time, which can then inform recommendations.
  1. Businesses need to automate the long-tail of decisions. With consideration of the 80/20 model, there is likely 80 percent of the business, product, location, and customer decisions that haven’t been examined or analyzed. Cognitive Automation allows businesses the ability to focus employees on those 20 percent of the decisions, leaving the other 80 percent to the computers.
  1. Businesses need to drive agility through increased velocity and granularity. It’s important businesses transition from making decisions on a monthly basis to driving agility by re-evaluating inventory positions on a daily basis. Cognitive automation allows for the level of automation in every granular part of the business, which will then drive responsiveness.

Cognitive automation offers mastery of these fundamentals and translates into the ability to ask new questions and respond to new patterns that couldn’t possibly be predicted or designed for with any number of emails or meetings.

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Kristen Chase
Cognitive Automation Community Contributor
May 10, 2021