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Comment: how to lead in a disruptive supply chain world

Disrupt or be disrupted. That is the reality facing businesses and their supply chain organizations in the digital era, where business models change as quickly as new competitors or new market opportunities emerge.

Winning supply chains will be those that aspire to be the best while tackling the real transformational challenges that lie ahead.

Great supply chain leaders have to create a vision for what’s possible in the future amid the realities they face today. They need the ability to anticipate and respond to future events with integrated plans capable of responding to disruptive business scenarios.

That means redefining the notion of a supply chain. Traditional supply chain strategies that focused on incremental change, being risk-averse, and that are measured mostly on cost savings and efficiencies, will no longer win.

There are three key areas that supply chain leaders should focus on to create their vision for the future.

New customer experiences

We are entering the age of “experience” economies. This means that the way companies deliver customer value is different, and the customer experience is the new battlefield for competitive differentiation. The new competitive differentiator is understanding what customers want before they ask for it, sometimes solving problems customers didn’t realize they had.

Customers today are focused on getting what they want when they want it. Creating that superior customer experience can include delivering personalised, or smart products and services, with immediate access and delivery where and when the customer wants them. Or ensuring that corporate social responsibility (CSR) initiatives are built into the supply chain to provide sustainable purpose and products to customers.

These customer experiences will be delivered through disruptive business models called ecosystems fueled by virtual connections that enable companies to come together and deliver the customer experience in ways they couldn’t before.

The new virtual ecosystem

The concept of a business ecosystem is not new. Cars, for example, have evolved to become platforms delivering a customer experience that draws on a cross-industry ecosystem of partners, from the car manufacturer to companies that specialise in communications, entertainment and navigation. What is changing with these ecosystems is the rise of digital connections combined with digital products.

Products and services delivered through the ecosystems of the future are connected by electronic touchpoints called application programming interfaces (APIs). The connection is digital and the product is digital. These virtual ecosystems will disrupt supply chains.

Ecosystems are the future of the digital business world. Every company will compete in a virtual ecosystem. Supply chain leaders need to orchestrate product and solution development across the ecosystem, combining input from players previously unknown to them.

New digital technologies

Underlying and fuelling all of this are new digital capabilities. As supply chains build digital maturity, the use of different types of technology evolves. Businesses and supply chains will be ecosystem-driven, crowdfunded, socially agreed, 3D-printed, drone-inspected, sharing-economy-provided, usage-metered, predictively maintained and blockchain-assured. These new digital capabilities are also catalysing changes to the very notion of what we now mean by the supply chain.

Take artificial intelligence (AI), for example. The rise of AI is enabling a future in which a supply chain will be a dynamic, self-adapting organism to a constantly changing environment, much like the human brain.

The supply chain of the future could look like one in which customers and partners may be machines that are acting and negotiating on their own, with little to no human intervention. This supply chain can digest vast amounts of data, anticipate customer needs, predict when critical suppliers will shut down and then, autonomously and dynamically reconfigure the network to respond, making decisions to qualify and connect, all at the speed of digital.

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