Monday, November 5, 2018

Why digitalization can't fix your supply chain problems

There's a pretty good chance that when you asked for a solution to your supply chain problems, someone brushed you off saying "don't worry, we're digitalizing soon". Just look at all the software vendor's marketing pitches, browse discussion groups and networks on the internet, listen to analysts and consultants... more often than not digitalization is perceived to be the holy grail. While writing this post I called up LinkedIn and the second post had the following text:

"Delighted to host the <name left out> workshop with more than 30 top customers in <location left out>. Focus on <software vendor left out> Digital Supply Chain Product Strategy and tangible business use-cases for Intelligent Technologies like IoT, Machine Learning and Blockchain. Thank you for your participation and insightful discussions. hashtag#digitalsupplychain "

The 3rd and 5th article were similar but I simply want to point out that the talk about digital supply chains is over proportional compared to the necessary talk about human factors influencing the outcome of planning. Undoubtedly, digitalization is coming and it certainly is necessary, however, my point here is that by simply digitalizing your supply chain or shop floor or company or whatever, you're not brushing away the problems inherent to supply chain dynamics.

In my opinion digitalization or, as it was previously called, software implementations will get you two primary benefits:
- process automation and standardization to free a planner's time away from doing busy work
- improved quality of information which allows the planner to make decisions that the machine (that digital thing) is not good at making

Now many of you will say "but the machine is now intelligent... " Really? Are we there yet? Then our manufacturing and distribution companies can be solely run by IT departments (they are already anyway) and we don't need planners anymore? The VUCA world (Variability, Uncertainty, Complexity, Ambiguity) is real and unfortunately (or thankfully) we're still dependent on the excellent functioning, very creative and immensely intelligent human brain. Humans are still making decisions and are still running the show. Machines are still stupendous data crunchers but they're very good at that.

Let's remain flat footed and not exaggerate what digitalization can do for us. Except, of course, if you're making a living selling digitalization. But for the rest of us... those that struggle to keep the right inventory at the right place in the right quantity at the right time, let's use the machines (and software and all things digitalized) for what the are good at...

- automating so we have more time to work and think analytically and make good decisions
- increase the quality of data we use to make decisions so that we make better decisions

...and further our knowledge and experience with the dynamics of a supply chain, so we can effectively use our brains to fight the challenges we're faced with by the VUCA world.

Intelligent, experienced and effective planners are still rocking the supply chain world! Let's work on raising good, effective human planners too... spend some of the digitalization budget on the human factor... it pays.

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