Using Digitalization and Big Data Wisely in your Supply Chain
In my work to optimize supply chains, I get to visit a lot of different companies in many different industries. Since I have a huge curiosity for leaning new things, I tend to ask a lot of ‘hows’ and ‘whys’. The conversation often turns to digitalization and big data, which I still see as buzzwords that are commonly integrated into the business strategy – but on a strategic level I have yet to see a company really working wisely with the internal Business Intelligence analytics.
By Heidi Larsen, Supply Chain Princess
I don’t think that’s due to lack of effort or knowledge. And the introduction of Artificial Intelligence (AI) throughout businesses is offering much easier access to the numbers and data needed to chart progress. However, this chart only shows the results of your own efforts; reaching the predefined milestones within the agreed amount of time results in applause and praise for everyone. But what would happen if we looked externally?
In the past decade, I have heard a lot about using or following ‘best practices’. But, in my opinion, this really only shows that many companies are doing the same thing – not that what they are doing is necessarily the best solution to a given challenge. When working with this topic, I often compare it to the use of ISO standards, which only confirm that someone is very good at doing the same thing in the same way and not that it’s the best way. Why not strive for ‘best in field’?
I recently attended the Nordic StrategyForum Supply Chain and Procurement conference in Riga, hosted by Management Event. My compliments to the organization team, by the way. The buzzword topics of digitalization and big data were raised by several keynote speakers. Sievo, a spend management software provider, shared insights into the software set-up for tracking data and identifying relevant external benchmarks. Orkla, a grocery chain, shared its struggle on implementing a fully digital supply chain, and Finnair shared its work so far on moving its client scope from ‘availability’ to ‘lovability’. What all the presentations had in common is that no one seems to have all the answers to hand so far. Everyone is still struggling on their journey; some are still defining scope and possibilities, a few are still delaying the use of a full AI implementation in their supply chain, and others – albeit fewer – fear that AI will replace human jobs.
I am convinced that we are still far from converting human jobs into AI in our supply chains. The key messages from these speakers and the findings from the latest research show that, in fact, the human factor is what is still missing in the digitalization process. It is fairly easy to gather internal data and to measure the effectiveness of your own supply chain, but it’s when it comes to actually optimizing it that I see the challenges occurring. We need to help our AI to determine which numbers to benchmark and which milestones to set. Only then can we know the true outcome of our efforts and work strategically – and wisely – with digitalization in our supply chains.