BCG
“ Supply chains will look fundamentally different in 10 years . They will turn into agile networks of players ”
DR . STEFAN GSTETTNER PARTNER & ASSOCIATE DIRECTOR , BCG
of . The agile network you describe sounds like a utopia as we see very few successful transformations . Business complexity is often given as an excuse . Could you lend us your thoughts on how companies can tackle this challenge ?
“ There was an article I co-wrote in 2018 in the Harvard business review called The Death of Supply Chain Management that resonated quite well in the community because what we said is there is no logical reason why many of the supply chain decisions couldn ' t be made by machines in the future rather than people because , in supply chain management , it very often comes down to rational trade-offs . It ' s not about instincts , and it ’ s not about pure experience or gut feeling . It ' s about having , for example , to trade-off between service level versus inventory ? And there are rules and formulas for this , and so there is no reason for this to be tasked to humans .
“ Something that is brought forward , the autonomous supply chain or the lights off planning or self-driving supply chains-- even more of those buzzwords-- although fundamentally I agree that there ' s no reason why these shouldn ' t happen , there are fundamentals that need to be in place in order to realise something like this . We haven ' t built the bottom of the house , let ' s say , and therefore we are not quite ready to build the roof . And at the bottom , there are really fundamental questions . Like , have we segmented our supply chain well ? Do we have our KPIs in order ? Are we sure that we have set the right balance regarding the KPI target values ? Do we have the right incentive schemes in place ? As well as the previously mentioned topics such as capabilities .
“ So again , conceptually , I think it ' s easy . And to be honest for us as consultants , it ' s , of course , easy to put on paper that this will happen . But then practically , as we see , this is where the challenges come in . I think that is the task that we all have in supply chain , to have this North Star as a desirable target state of mind . And then we relentlessly work on the fundamentals and then on the technology to achieve this . Because I think for companies , it ' s desirable to have this end state in place
496 June 2021