I enjoy attending conferences. They give me the opportunity to reflect, reconnect and recharge. One conference I recently attended is the Gartner Supply Chain Executive conference in Phoenix, Arizona. With a lineup of very inspiring speakers, provocative content and pragmatic use cases shared by practitioners, the event certainly lived up to the theme of ACT (aspire, challenge and transform). Here are my takeaways:
1. Digital disruption is here and now: John Phillips, SVP of Customer Supply Chain, PepsiCo, presented some fascinating examples of getting products into the hands of consumers in unique ways powered by robotics and artificial intelligence. Here are some of the examples he shared to highlight how the traditional linear supply chains are being disrupted:
- Connected home sharing consumption signals (e.g. smart refrigerators and Amazon dash buttons)
- Cashier-free stores powered by the Internet of Things (IoT) (e.g. Amazon Go)
- In-store robotics (robots scanning shelves and delivering real-time signals)
- Crowdsourced delivery through services such as Postmates, Instacart and Shipt
- Use of drones (EyeSee inside the warehouse for scanning and tracking inventory, Prime Air for delivery)
- Autonomous vehicles going well beyond driverless cars (e.g. Otto)
- Virtualizing experts (use of Augmented Reality to enable remote troubleshooting by field services personnel)
- Artificial Intelligence to automate higher cognitive skills
One common theme I found in almost every one of these use cases is the application of computer vision. However, when computers go well beyond seeing, by interpreting and making decisions, it raises some interesting questions. Two questions John Philips encouraged the audience to consider were:
- Do we have the capability to deliver to these digital signals?
- Do we have the organizational structures in place to harness the digital disruption?
2. Connected devices not only create digital supply chains, but also entirely new ecosystems. In their keynote presentation, Michael Burkett and Debra Hofman of Gartner presented the example of a cloud-connected ecosystem of John Deere, Monsanto and Cargill with farmers at the center of this ecosystem. John Deere is equipping its tractors with smart sensors constantly collecting the local data around soil type, soil conditions, irrigation, etc. Other partners are contributing weather-related insights, commodity pricing and external data feeds – all connected with real-time digital interactions forming a digital platform that gives farmers insights into how to maximize crop yields. Use cases in such ecosystem extend beyond the traditional definition of supply chain management and unleash the tremendous potential of data-driven insights.
3. Humans and machines – collaboration or conflict? There were plenty of sessions focused on the rise of cognitive intelligence. That brings up the question of how humans and machines coexist in this new world. Here are two takeaways:
a. Jobs with a high degree of physical activity will be replaced by the machines: With autonomous vehicles, the jobs of long haul truck drivers are in jeopardy. Amazon Go is a classic case of how a store can be operated with no human labor. Use of drones and robots in warehouses eliminates the need for humans picking, putting away, or counting inventories. This will mean a good portion of workforce of today will need to upgrade their skills.
b. Supply chain organizations will need to evolve: Beyond the physical labor, with the rise of prescriptive analytics, machines evolve beyond decision support to decision-making. The traditional planning organizations will need to evolve to make use of big data analytics and cognitive computing. In a highly engaging and provocative presentation titled, “Get ready for IoT in Supply Chain Planning,” Andrew Downard of Gartner made a compelling case of how organizations need to be prepared for the rise of “Algorithmic Planning.” He took the example of demand planning where the potential exists for a 10% to 20% improvement in forecast accuracy with sensor-connected systems such as a Coca-Cola Freestyle machine or Amazon Dash buttons. However, he said skill mix as it exists today will need to be reassessed to unleash this improvement potential. He gave the example of how an organization should consider moving from having 5 demand planners to 3 demand planners, 1 data scientist and 1 data engineer.
All in all, the message from various sessions was clear. Humans at all levels will need to retool their skills and learning can never stop. This takes us to the next insight.
4. Developing supply chain talent for the future: In her keynote, Nicole Jefferies, Executive Director of Customer Fulfillment, Lenovo, talked about her philosophy and how she is putting it to practical use at Lenovo to groom supply chain talent. She presented a model for learning that consists of 10% coming from formal training, 20% through relationships and 70% through doing. She introduced the notion of “mentorship circles” wherein groups of 10 can learn from each other and from the leader. She encouraged the audience to think of career as not a simple linear progression but instead as a web with multiple touch points. Specifically, with regards to supply chain, she encouraged these “training webs” to consist of functional, managerial and analytical skills to groom well-rounded supply chain professionals.
5. Rising expectations from SCM leaders: In an aptly titled presentation, “P&G’s pivot from cost management to driving business outcomes,” DeLynn Louth, Associate Director of Supply Network Operations , P&G, talked about how the expectations of supply chain organization have been raised from cost management to include capturing revenue growth. Stan Aronow of Gartner, co-presenting at the session, talked about a recent survey of 141 CEOs and senior business executives, wherein 57% of the respondents rated “growth” as the number one objective compared to 15% identifying “cost” as the top objective, reflecting P&G’s own experience. Louth talked about how some of her team is collocated with sales teams, working hand in hand to achieve growth drivers. These drivers included on-shelf availability, promotions amplification, increased distribution through responsiveness, increased events through supply chain flexibility, increased shelf investment through joint value creation and increased trade spend efficiency through less markdowns.
Overall, it was a great event. I was also encouraged to see the demographic diversity amongst the attendees which perhaps is a reasonable sampling of the supply chain professionals as a whole. In fact, in a session by Robert Allen and Joanne Wright, IBM, on “Gaining greater visibility with Watson analytics”, an introductory video they played included more women than men, as was aptly observed by my colleague Trevor Miles. Of course, there is much more to be done to promote gender diversity in the supply chain profession, but I have no doubt the supply chain community as a whole will rise to the challenge!