Data, Not Digitalization, Transforms the Post-Pandemic Supply Chain

Digital-first enterprise success demands clarity-first supply chain design.

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That COVID-19 dramatically accelerated digital transformations worldwide has become C-level consensus and a truism. As Microsoft CEO Satya Nadella publicly observed, “We’ve seen two years’ worth of digital transformation in two months. From remote teamwork and learning to sales and customer service, to critical cloud infrastructure and security.”

Even discounting for hyperbole, pundits and practitioners have been echoing Nadella’s sentiment. Organizations understandably seek to wring digital virtue from pandemic necessity. While many business operations can swiftly transform, other key processes defiantly resist digital acceleration. Supply chains are a case in point: Spreadsheet- and ERP-dependent supply chain operations had to radically revisit and revise expectations. Yesterday’s digital transformation road maps proved largely useless.

Organizations understandably seek to wring digital virtue from pandemic necessity.

Why? As heavyweight boxing champion Mike Tyson is said to have declared, “Everybody has a plan until they get punched in the mouth.” COVID-19’s impact revealed that supply chain business continuity plans had both the wrong data and the data wrong. Top management literally couldn’t see what was happening — or needed to happen — to ensure safe and reliable deliveries under duress. This came as a shock. Data, not digitalization, was their immediate problem. Legacy leadership teams need to understand that decisions around data — not digitalization — drive successful supply chain transformation.

Most significantly, targeted transformation investment overwhelmingly emphasizes greater visibility and transparency rather than supply chain optimization. Policies and practices promoting granular, real-time data access at every relevant link in the supply chain assumed primacy and urgency. As organizations confront their global futures in post-pandemic, machine learning, “What about China?” contexts, those decisions take on new urgency, as well as importance. I’ve interviewed — and worked with — more than a dozen supply chain managers and executives since pandemic shutdowns began. Virtually all of them have fundamentally reset their supply chains’ strategic priorities. “Just in case” now matters more than “just in time.” Assuring worker safety now supersedes improving inventory turns.

“Honestly,” said one supply chain executive from a Latin American food and industrial equipment conglomerate, “we didn’t know how little we knew about our key suppliers until COVID-19 occurred. We had to get all kinds of [new] information from them and — to make [our] factories work — we had to give them information we never had before.

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