I grew up listening to stories about the great Indian epic Mahabharatha, an 18-day war between factions of a family as they battled for control of the kingdom. Abhimanyu, a brave prince fighting on the side of good, encountered the Chakravyuh, or blooming lotus, war formation. While he knew how to break into the pattern, the strategic genius of the Chakravyuh made it impossible for Abhimanyu to decrypt a safe passage through it. Alas, Abhimanyu perished, fighting valiantly.
Today’s consumer goods and retail companies appear to be in a modern-day Chakravyuh themselves; they are engaging in a battle to stay profitable while trying to meet consumers’ ever-changing needs. Consumers expect a unified commerce paradigm enabled by the convergence of connectivity, convenience and choice. This has engulfed every stakeholder in business. Technology has become the equalizer, trampling once unique selling propositions and strategies, as customers wield great power among retailers, distributors and manufacturers alike. Investments in physical assets and networks that were once competitive advantages, are now viewed as encumbrances that must be reassessed for value in the new equation.
Several businesses jumped in the fray, labeling themselves as omni-channel before fully understanding the capabilities and governance required. Having since realized that their initial responses to meeting consumers’ increasing expectations are not sustainable, businesses are back to the drawing board – all while hallway and water cooler conversations focus on how to incorporate digitalization, blockchain, and the concept of uberization into their supply chains and across their organizations.
The companies that appear to be on relatively solid ground are the ones that are showing a sense of urgency, but with purpose and calibration. These executives are beginning with “what are the right questions to ask?” They are reevaluating the very basis of the enterprise, looking at their vision, corporate values and their value propositions to their customers. They are defining strategies congruent with their purpose and targeted outcomes. This involves identifying the root of their value creation and sustainability. They are making operational simplicity, training and change management a pre-requisite, while looking at end-to-end business processes, organization models, collaboration, people and tools. Some common approaches include:
- Visualize – View the entire process from a customer’s frame of reference with the goal to observe, learn and contextualize the customer’s experience.
- Define – Blueprint and define the value proposition that will be delivered.
- Strategy – Define and segment the addressable market and clearly agree on what doesn’t align with the organization’s focus. Map the entire value chain including trading partners, plot supply chain flow paths and variants, and define a what-if analysis and trade-off evaluation framework. Create playbooks that can drive organization-wide decision support.
- Metrics – Determine what success looks like at various levels, from operational to strategic.
- Capabilities – Outline and validate the requirements for a journey map along a good-better-best model.
- Learning Pilots – Identify strategic partners and invest in fast, prescriptive proof points.
- Technology – Re-evaluate alliances with vendors and select those with serious intent to join forces and provide simple ways to tackle complexity.
- People – Invest in talent to support the vision of 2025 and beyond, looking at ways to engage next-generation workers.
Supply chain professionals are in the eye of this cataclysmic shift. We are being challenged to dig deeper, anticipate where the puck will go next and provide advice to businesses as they navigate this new reality. As a 19th century scientist once said, “Alchemy could not become chemistry until its fundamental units were discovered.” Great effort and even greater outcomes lie ahead for companies that have the gumption to reevaluate their business fundamentals and chart a new course during this time of major transformation. And those that choose not to revitalize their supply chain processes could well meet the same fate that Abhimanyu did.
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