Brought to you by VANTIQ
Episode 14
The Autonomous Supply Chain
Supply chain guru Lora Cecere reveals why there are no longer best practices in managing transformative supply chain operations – and what to do about that.
Blaine
Mathieu
Chief Marketing +

Product Officer, VANTIQ
Lora
Cecere
Supply Chain Insights

Blaine: Joining me today for this podcast-only episode of VANTIQ TV is Lora Cecere, Founder at Supply Chain Insights where she works with supply chain leaders to take teams to higher levels of excellence. Lora has over 35 years of supply chain experience. She was an industry analyst at Gartner Group, AMR Research, and Altimeter Group. Prior to that, she spent 15 years building supply chain software at Manugistics and Descartes Systems Group and 20 years as a supply chain practitioner at P&G, Kraft General Foods, Clorox, and Dryers, now a division of Nestle. Laura is also the author of two books on supply chain management: Supply chain Metrics that Matter and also Bricks Matter.

Wow! Thanks for the time, Lora! I think this is going to be an interesting conversation.

Lora: Well good! Let’s get on with it.

Blaine: All right. So, tell us a bit more about Supply Chain Insights. What does this organization do?

Lora: We’re a research firm. We triangulate to market on new technologies. We help business leaders to basically understand where technology is headed. You and I both worked for Gartner, Gartner focuses more on IT. I help line of business leaders. I also do quantitative research studies. I use my LinkedIn panel of 280/2000 followers around the world to do quantitative research.

I do qualitative research projects for business users that are interested and I coordinate some chair groups to help people understand next-generation technologies. We have one on network of networks which is blockchain and cognitive computing and one on the redefinition of demand planning which is looking at cognitive computing and how we can change demand processes.

Blaine: Wow interesting! And it sounds like you also hold the summits. I know there was a recent Supply Chain Insights global summit. Tell us about that.

Lora: We do it annually and there are three parts to the summit:

One, we celebrate supply chains to admire award winners. These are companies that beat their peer group in driving improvement, performance, and value. It’s a methodology that we’ve been working on for five years. This year, L’Oreal and Rockwell spoke. We focus on digital innovation. I handpick digital innovation case studies. Then, we focus on how we redefine the organization to make a pivot, a digital pivot, drive new value. So, those are the three goals.

It’s a different conference in that I handpick the speakers. There are no sponsors. It’s about 40 percent presentation, 50 percent networking, and about 10 percent education. We’ll take an idea and educate on open source technology: what’s Kafka, what’s Apache Spark? How does that change whatever we’re talking about? Then, we’ll have a case study and then the groups are assigned to roundtables with people they don’t know. They talk about how that affects their operations and then we have dialogue about it. So, it’s a different format than most conferences that you go to.

Blaine: Interesting. And how many supply chain practitioners would generally come to this conference?

Lora: 60 to 80.

Blaine: Okay so it’s a really small, tight group where you get good interaction.

Lora: Right and usually the people that come are innovators. It is a very focused group. It is global. About 15 percent are European, 5 percent are Asian, but that’s what we do. We do it once a year.

Blaine: Interesting. I want to touch on those innovators and some of the technologies you talked about in a minute.

But to start with, as I was looking through your history, you’ve published a lot of content, written two books. You write of some really interesting blog postings. One of your books is called “Bricks matter“.

Do they matter any more or have things become so virtualized now? Why do bricks matter?

Lora: Well, the supply chain is all about atoms. E-commerce has been all about electrons. We have to have physical goods to sell even though we’re morphing into services. 3D printing allows us to change some of the atoms in the supply chain. Assets will drive atoms: the making, manufacturing, and the distribution.

So, bricks do matter; where we put our bricks, how we use our bricks, what our brick strategies are, they matter.

Blaine: No doubt. At the end of the day, people still need to get their products, and increasingly, faster, more efficiently, More in real time. I’m sure many of your clients are pushing. As you said, they are innovators pushing the leading edge of some of these practices.

Lora: Right.

Blaine: So speaking of those practices, what were some of the key things that jumped out at you from your recent conference: key takeaways or insights?

Lora: My key insight is that different companies are trying to drive digital innovation using different strategies. They’re struggling because change management is hard.

One company talked about design thinking short sprints. Their focus is really on solving hairy problems. Their organization struggles with fail forward. A sprint’s very different than a traditional project as is and to be state. People are glued to the concept that we have best practices which we don’t because if you look at supply chains, 95 percent of companies are stuck. So, we’ve got changing practices. How do we change those practices? We were talking about these organizational change management issues.

The second company was focused more on scuba teams. The scuba teams were diverse sets that were focused against a business problem to go deep and they were funded. That team had no boundaries to go deep on those concepts.

The third group was more of an IT-led organization out of centers of excellence. So, three different approaches. It was interesting to contrast the differences of the approaches. I don’t think any one worked better than the other. I think all three of them are facing some very serious change management issues.

Blaine: Wow, interesting. I never heard of this notion of a scuba team before. I’m actually a scuba diving instructor and this is the first time I’ve heard of this concept of applying some of the notions there in the business domain. I’m going to have to do more research and reading on that. That’s really interesting.

You mentioned going deep. I presume the basic concept is you’ve got some funding and you really focus on going deep into a problem and fundamentally solving it. Is that the concept?

Lora: That’s the concept.

Blaine: And you have to come up before you run out of air?

Lora: Yes that’s right.

Blaine: [laughter] OK! I’m going to definitely check that out.

So, you brought up IT-led organizations and I guess it does bring up the perennial question of supply chain leaders tend to be more akin to the OT side of the organization. But then, there’s always should digital transformation be led by IT or OT. What’s your thought on this question of IT-led organizations versus business-led and who’s fundamentally responsible for driving this?

Lora: I think it’s business led. I think IT is very much trying to keep existing systems afloat. I think that IT-led transformation can’t stick. I wrote an articleabout that, and I strongly believe that it needs to be business led.

Blaine: Now, does that mean the supply chain management organization should be spinning up their internal IT group, their OT group in trying to go around IT (which I think happens fairly often), or should they be trying to work with IT?

Lora: They need to be working with them. It’s very much about putting them on a scuba team or putting them on a sprint. It’s very much about businesses led. It really needs to be led by business leadership.

Blaine: Yeah I’ve heard that. I’ve attended a couple of supply chain management conferences in the last year. When I talk to these practitioners, what they fundamentally tell me is yes, they want the IT side to be their partner at the table, but there’s frankly not a lot of trust in the group that they can actually get something done in a timely manner and be a helper instead of a hindrance. Do you hear that as well?

Lora: We do.

Blaine: Yeah it’s a challenge. So, some of what you’ve said touches on the topic of change management which I know you write a lot about. What are some of the keys to successfully driving the kind of change that these leaders need to drive?

Lora: We’ve got to start with an outcome. A lot of discussion was on are we trying to drive digital or transformation? The net outcome is we’re trying to drive transformation and digital is a means to the end.

Blaine: Yup. I think that’s a really good way to put it. That makes a lot of sense. At the same time, you mentioned Kafka and spark. You mentioned cognitive technologies. You mentioned blockchain. You’ve thrown out a few of the technologies that are pushing the envelope of Digital Transformation.

Do supply chain practitioners know anything about these technologies or do they have to know something about them?

Lora: Most of them are struggling to catch up. They all feel like they’re behind and they’re struggling to catch up, but they do need to know about them to be able to drive the leadership.

Blaine: And what do you think are the two or three biggest technical drivers of change in supply chain these days? We mentioned a couple of technologies a minute ago, but I think I know there are others as well. What are you seeing as some of the biggest things that could be really pushing change across supply chains over the next five years?

Lora: Well I think we’re at an inflection point where we will redesign supply chain planning, and ERP types of investments will become legacy as we focus on the redefinition of the autonomous supply chain. So, I think that we’ve got a lot of fun stuff getting ready to happen.

Blaine: Tell me a little bit more about the autonomous supply chain. What does that mean?

Lora: It’s a supply chain that senses, learns, and acts. So, it’s a layer of semantic reasoning. It’s got an ontology. We no longer have single ifs or single thens for rules. We can have learning rules and we can basically evolve, be much more agile.

Blaine: What’s your sense of what percent of major corporation supply chains are doing this today or anywhere near to what you would call an autonomous supply chain? Is this just an idea, a science experiment, or is anybody actually doing it in the real world yet?

Lora: Well we have 7 percent of manufacturers that are experimenting with artificial intelligence, cognitive learning, looking at how we catch up.

Blaine: And those of that 7 percent, that’s the leading edge right now. Interesting.

One of my favorite parts of the conversation is where I give the guests a chance to call BS on some aspect of conventional wisdom where you think most of the thinkers are thinking in one direction and you actually think it’s a different direction. What is that for you? Where are you a contrarian?

Lora: Well I don’t think we have best practices. I think we have traditional practices. I think we’ve got to learn from the past to unlearn, to rethink the future. The unlearning is the hard part.

Blaine: Yeah, always tied down by legacy technology and legacy thinking. Right On.

Any key takeaways or tips for a business or a supply chain leader that is trying to drive the digital transformation in their business?

Lora: Question the status quo, keep pushing, and learn from what you’re doing. This is all about change and we’re in an inflection point. Don’t make long term investments. Educate your team. Go solve big, hairy problems.

Blaine: Sounds good. And obviously, learn from experts like you.

Lora: Well, thank you.

Blaine: You’re welcome! Well, that wraps it! Lora, thank you so much for joining us today, for this insightful conversation. Those interested in learning and hearing more of Lora’s thoughts can follow her on Twitter. You can also check out her personal website at supplychainshaman.com.

And of course, you can go to supplychaininsights.com and reach out to me anytime at [email protected] Thanks so much.

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