What We Get Wrong About Digitization and Supply Chain’s Future

Whereas traditional growth models can be summarized in concepts of “more”— more racks, more servers, more space, more workforce — the future requires a shift towards leaner, smarter strategies focused on business agility. Digitization represents this shift in mindset and technology. Businesses need to learn how to operate within smaller footprints; process high-volume, low SKU orders; manage inventory in fluctuating markets, and execute across a wider, interspersed fulfillment network. This requires proactive planning and the technological means to pivot at the speed of customer expectations. 

The old ways are becoming less effective in today’s economic climate, pushing businesses toward the next thing. Yet, there’s a flaw in how the supply chain industry generally talks about digitization and the supply chain of the future. 

Eye on the Supply Chain Prize 

Why does a project-based approach fall short? The simplest answer is the same reason why businesses launch these projects: customers. As much as we love them, today’s consumer creates chaos. You can’t blink. Habits and trends in consumer appetites change far quicker than most supply chains can handle. This puts operations in an upheaval and can tear down forecasts overnight (for good, bad, or otherwise). 

Traditional supply chain strategy lays out a five-year vision that forecasts cost, consumer demand, throughput, and other parameters as needed by the business. These cycles offer valuable far-sighted roadmaps, milestones, and KPIs. But, consumer trends change on far shorter cycles. Building in a short-horizon layer to compliment a long-term vision helps businesses react to market conditions that come in three, six, or nine-month windows. This requires predictive demand planning and warehouse management systems nimble enough to pivot with the market.

First, you build the roadmap. Then, you build a culture and DNA of responsiveness into your supply chain operations. This not only achieves operational excellence for today’s challenges – you also build resiliency and agility into operations that lasts. 

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