What happens when you ask four experts for their thoughts on supply chain transformation? We did precisely that at Quintiq World Tour Singapore 2015 with experts from Hewlett Packard, Baker Hughes, ZALORA and FCI Electronics. And this is what they shared:
How would you define supply chain transformation?
Travis Wong (Regional Logistics Director, Baker Hughes): Having gone through different supply chain management strategies, I’d say it boils down to three elements: Supply, demand and product. The interaction of these three things will determine the changes that need to take place in your organization. It’s important to keep these elements in mind when you ask yourself: What are your organization’s business objectives, where you are now, and what are the gaps you need to address?
Jaya Moorthi (Director of Logistics, Hewlett Packard Asia Pacific): Let me first say what transformation is not – it’s not meant to be an incremental change where you fix something in the supply chain. That’s ad hoc fixing. If you ask me, supply chain transformation is about redefining the way you work, the way you deliver to customers, the way you operate. Uber is a great example. It has changed the whole concept of taxi services.
Syed Ali Ridha Madihid (Regional Director of Operations and Supply Chain, ZALORA): E-commerce is an infant industry in Southeast Asia and we are still trying to figure out how to manage our supply chain well. Transformation happens regularly at ZALORA, in my role as well as others’, as we continuously improve our supply chain management. It’s essential that we do this as we operate in a region filled with complexities – customs being a major one. In e-commerce, the supply chain begins from the point we procure our products to the point they reach the distribution center (DC) and finally, to the customer’s doorstep. We take note of customer expectations and feedback, and we evolve based on that.
Fausty David (Head of Global Demand Management, FCI Electronics): For FCI, our big move has been to integrated business planning – an integrated S&OP platform that enables collaborative planning and profitability at the end of every decision. Transformation is a journey, and we’re progressing very well right now.
Can supply chain transformation happen without technology?
Travis: It depends on the scale you’re looking at. The scale will drive the need for technology in business transformation. Complexity is another element. Once you transform, what is the level of scalability you need? If you have a single supply chain that caters to your entire line of products, then you will probably only need technology for the purpose of data capturing and analytics. But if your business setup is more complex and you have different supply chains for different product profiles, you should rely on an advanced technology platform to drive your process of bringing products to market.
Jaya: I see technology as an enabler and a multiplier. But technology alone isn’t enough to power a business transformation. Say you want to build analytics to get insights into customer feedback on your delivery – damages, returns and so on. You can use spreadsheets to do this, yes, but what does technology do? Technology multiplies what you’re able to do, bringing your business to the next level.
Syed Ali: Coming from e-commerce, my answer is yes and no. Yes, because technology is important especially for the upstream portion of our business – it offers better analytics and forecasting. And no, because the hardware portion is not essential yet here in Southeast Asia. In countries like Indonesia, Vietnam and the Philippines, where labor costs are still relatively low, using manpower makes more sense than automation technology for now.
Fausty: At FCI, we used to think demand forecasting is straightforward – as long as we collaborated with the relevant departments, we’d be able to get the forecasting right. It was only later that we realized we didn’t actually need to rely too heavily on demand forecasting. And sometimes the best forecast is one without input from sales. As such, whatever we’ve been selling for the last 10 years, we will continue to sell. What we should look for are exceptions. So my take on this question is this: If you don’t have a disruptive thought process to spark meaningful transformation of your existing systems, then implementing new technology is only going to layer complexity with more complexity.
Looking for more? The experts in this blog post also spoke on other aspects of supply chain transformation. Read all about it in our latest eBook Breakthrough Business Ideas.