Giriraj (GK) Sharma, Associate Vice President, Bristlecone
In the 2018 book Factfulness, Swedish statistician and author Hans Rosling, together with his son Ola Rosling and daughter-in-law Anna Rosling Rönnlund, suggest that the vast majority of human beings are wrong about the state of the world. In the book, they demonstrate how their chosen test subjects believe that the world is poorer, less healthy and more dangerous than it really is, which is attributed not to random chances but misinformation. According to them, barely a century ago, facilities, medical treatments and luxuries that were not even available to the most influential royals of the time are now available to the masses.
The world has become much better now – or so they claim.
Today, with the pandemic-hit 2020 nearly over, there is now much anxiety and uncertainty about the coming year. I wonder if the Roslings would still stand by their 2018 description of the world. I prefer to think: 2020 is only the beginning, the best is yet to come.
The Gap Year
Let me start with an anecdote. A journey from kindergarten to high school is a rigmarole, where the subject of this journey simply follows a set pattern, often without really knowing what goals he or she wants to reach and why. Many continue in the same way beyond high school, going straight into college, but some show courage to take a break for a year. This concept of a ‘Gap Year’ is a more acceptable norm in the West than it is in the East and other parts of the world.
The gap itself is not important; what’s important is how an individual uses the Gap Year and how it shapes his or her destiny afterwards. This gap allows self-discovery and re-prioritization before starting the long haul of a successful and fulfilling life experience. It’s important to note, too, that a Gap Year may become a lifelong curse if not utilized effectively and strategically.
I would like to define and remember the year 2020 as the Great Gap Year. In the organizational context, it allows the corporate world to rediscover itself, reimagine established practices, and reassess digital transformation requirements and uses cases before restarting the long haul.
Long Live Old Commerce
Some 20 to 30-year-old concepts in the world of computing are finally seeing possibilities in emerging technologies, which is encouraging, but what is not so exciting is the representative use cases. They are being presented as if the good ‘Old Commerce’ has died just because certain new models and some new-age companies are emerging – for example, a cab aggregator that does not own cabs, a real estate company that does not own properties, a movie mogul who does not own a production house or the larger-than-life success story of an online retailer that does not own inventory.
For consumers, these are simply new channels. It’s not easy to write the obituary of Old Commerce, nor should we. Someone still has to produce cars; develop real estate and build homes; manufacture carpets, faucets and tile; process food items; produce movies; etc.
Old Commerce has not died, and we shouldn’t be expecting it to, but it does have to transform to work with the new channels. For example, an automobile company may also emerge as a potential car rental company or cab aggregator, but they have to continue to manufacture cars, right? We’re already seeing many movie production houses have their own OTT streaming services to reach audiences through an emerging channel, which has become even more important in 2020, with movie theaters closed and consumers staying home.
What we need to do is remove the disconnects between the positioning of use cases for digital transformation and their applicability to the organization labeled ‘Old Commerce.’
Given the realities of the post-pandemic world, the pressure is mounting to redesign the supply chain, define new practices and operational metrics, and cope with the competition from new channels of doing business or doing business with. This requires companies to reimagine use cases and, accordingly, define (or redefine) their transformation roadmap. Below are examples of some of the reimagined use cases for the corporate world after the Great Gap Year of 2020.
Scenario Planning with Response Management: Bridge the gap between scenario planning and response management. Based on possible scenarios and the probability of occurrences, define an array of response action plan options using Machine Learning. Traditionally, documentation of lessons learned was sufficient. But now, the machine can learn, rank and recommend action plans and also automate configuration changes in a guided manner. This drastically reduces the turnaround time in the event of the occurrence of unexpected events or disruptions.
Last Node of the Supply Network: Gain visibility into the last level of the supply node in the case of single or multi-sourcing. Multi-sourcing, for the sake of it, does not mitigate risk. Businesses must evaluate if different supply sources can be traced back to the same source. For example, you have Vendor-1, Vendor-2 and Vendor-3. On the surface, this appears to be a good multi-sourcing strategy, but in reality, all three vendors source their raw materials from the same mine in a certain geography. Is this multi-sourcing? Are you mitigating supply risks? Not in this scenario. It’s time to plan and operate an intelligent Supply Chain Network, one that’s integrated with real-time market intelligence as well as backend ERP, planning and procurement systems.
GPS for SCM: GPS-enabled travel has changed the way we now deal with traffic, weather and the ‘police reported ahead’ phenomenon. It’s a completely different experience now compared to traveling in the year 2000 using paper-based MapQuest and magnifying glass. SCM Control Tower functionality is the GPS for supply chain. What prevents companies from not being able to enjoy this feature? Refer to my blog, Rearchitecting IT to Build a Resilient Supply Chain.
Order Fulfillment is Not a Sprint: It is not a 500-meter race to deliver fast. You have to save energy, but at the same time, you have to constantly be in motion. You also have to be profitable. It’s important to understand the overall context; segment customer, market and products; and choose from the latest optimization algorithms including Demand Driven MRP, a phenomenal concept to be applied for a certain category of products/components, or explore other strategies such as incentivizing customers for acceptable lateness and model such lateness as tolerance in the cost-based optimizer. Incentivizing customers in such a case may also require dynamic pricing recommendations and on-the-fly profitability analysis.
Green Last-Mile Delivery (GLAD): Consider several eco-friendly parameters, which are unknown to the traditional deployment planning, shipment planning and packaging functions.
Product Launch and TPM: A product launch is a marketing-driven activity, a time-bound project that requires a collaborative effort with logistics planning and execution, trade promotion activities, and coordination with retailers, pricing management and supply chain planning. It is a cross-functional process with rarely any good mechanism to capture effectiveness.
Organizations should not let the Great Gap Year of 2020 go to waste by spending it in fire-fighting mode alone. Technology is available. Possibilities are endless. Use what’s left of 2020 to rediscover, reimagine, reassess and move forward with certainty. Engage with innovative SCM-focused partners and start redefining and redesigning supply chain and operations scenarios.
See the opportunity this Great Gap Year is presenting – and embrace it.