With a focus on supply chain modernization comes the need for embracing change management

By | 4 minute read | May 29, 2020

As the world looks forward and enterprises focus on the new normal, the COVID-19 pandemic has revealed the vulnerabilities and fragilities in global supply chains across most, if not all, sectors and industries. Leaders are now analyzing the current pain points to better prepare for tomorrow. To avoid perpetual reaction to future “black swan” situations, leaders need to evaluate how they can proactively get ready for future unpredictable, yet inevitable, disruptions. While no one can foresee what’s in store for tomorrow, we can work today on building a smarter global supply chain.

The need to modernize supply chains to gain end-to-end insight into the production, procurement, inventory and the delivery of goods and services is certainly not new. Today’s environment accentuates the need for this modernization and transformation.

But the supply chain is complex and intricate. Merely plugging in new technology won’t yield an organization any insight if it doesn’t first review why it needs to change long-standing supply chain practices and how it will do so. By embracing change management methodologies before any upgrade to the supply chain, organizations will recognize the level of collaboration and commitment needed to make the most of any new technology and reap the benefits of a modernized supply chain.

There’s a long list of things to consider when advancing change, but an organization needs to prioritize the roles of its employees and determine if they have the proper skills to thrive. Above all, leadership needs to show employees how they and the company will directly benefit from new supply chain technology.

Collaboration across the supply chain

Because companies have relied on legacy supply chain technologies for years, they’ve probably given little consideration to the steps behind digital transformation. They need to ask: How massive are our organizational silos? Do the varying systems and processes within each silo clash with our key performance indicators? How do outdated manual processes impede information sharing?

Indeed, the expectations and output of a single but important warehouse might be misaligned with what the company wants to do, but few might recognize the disconnect.

Change management encourages companies to step back and review what would happen if new technology isn’t immediately adopted. This tempers any rush to purchase technology for its own sake. Instead, they’re encouraged to review how their competitors approach supply chain management and then turn inward to determine what will be their own top goals of modernization. Many things will seem important, but by narrowing the initiative to a handful of achievable KPIs — increasing service level, decreasing working capital, improving process efficiencies — companies can refine what their future supply chains should look like. They’ll also be able to better align their goals with the appropriate technologies.

A formalized change management process also spurs leadership buy-in at the outset. Engaged leaders shape the vision of their improved supply chain and prepare clear messaging that can be shared with the organization over the long haul.

There are ways to mitigate a long transformation process by having an agile change methodology and involving all key participants in co-creation studios, emphasizing the need for cross-functional collaboration. Because a supply chain runs wide and deep, a variety of departments and teams that otherwise might not regularly communicate with management or other units about new technology will have to join the discussion.

Communication breakdown

Effective communication is central to employee engagement, the most critical aspect of widespread change. Leaders shouldn’t solely dictate to employees how they’ll use new technologies and processes. Employees need to be nurtured and advised to achieve true progress.

To start off on the right foot, leadership should understand the roles and tasks of the employees behind the supply chain. By developing personas — profiles that consider an employee’s experience with the technology, location and duties central to their job — the company can better understand how a particular group of employees will be affected by, for example, a new warehouse management system.

Employees will inevitably ask what’s in it for them. They want to know how their jobs will change and whether their career development and fulfillment will be affected. When managers understand how new processes and technology will affect employees, they can communicate what the changes will accomplish and help workers transition. A new perpetual inventory management system, for instance, would allow some store employees to spend more time with customers instead of scrambling to find inventory — a development many would probably embrace. With employees, it’s not just about buy-in — it’s also about giving them an ownership stake in new processes, and that requires finding out how employees learn new skills.

Training will probably be necessary. Middle management should walk employees through new technologies and processes. Employees can also learn at their own pace on digital training platforms offered by professional training services – particularly useful during these times.

Changing from the inside out

Customers’ expectations will only increase, and the internal processes behind a supply chain will only become more complex. Supply chains should be dynamic, responsive, and interconnected to an organization’s ecosystem and processes. This requires end-to-end visibility, real-time insights, and decisive actions – particularly in escalating situations. While new and innovative technologies — such as machine learning, advanced analytics and blockchain — can help organizations build smarter supply chains and help companies maintain business continuity amid disruption and uncertainty, these applications can’t be added in a void.

Companies first need to embrace rigorous — and undoubtedly difficult — change management methodologies to understand how they should update their supply chains. Change management services, such as those as offered by IBM, have the expertise (through consultations, workshops and innovation labs) and technology (AI, advanced analytics, an insights dashboard) to help organizations modernize their supply chains from the inside out.