It’s people that keep the supply chain functioning. Understand key talent trends and the skills and capabilities needed to succeed.

 

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We’ve just published our first report in IGD’s Supply Chain Leaders series, reflecting the views of over 100 senior figures from more than 60 businesses around the world.  

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We’ve recently published the latest report in our ‘Powered by People’ research stream. It explores how organisations progress on their journey to becoming digitally capable and outlines the need for change in this increasingly important area and reviews case studies from the industry.

This research follows an excellent report my colleagues in our charity team on the same subject. It helps organisations self-assess their digital capability and plot a route to success. Kudos to the HR Industry Leaders Forum and various industry working groups for contributing to this research.

However, it’s not just a lack of awareness around digital capability that is a risk to our industry, it’s the challenge presented by an accelerating rate of change, which threatens to leave laggards behind. This raises two key questions:

  1. What capabilities are leading digital organisations demonstrating?
  2. How can organisations progress along their digital journey?

Introducing…. A framework for digital capability

To address these questions, we first need to understand where our organisation is on IGD’s journey to digital engagement.  This is measured across four stages of digital capability; Inaction, Recognition, Action and Instinct.  


Source: IGD Research

From Inaction to action

During the Inaction phase, businesses are unaware of the need for digital skills or are consciously not taking any action to address it. They may lack understanding or it may not form a priority in the immediate future. As businesses move from recognition to action there is a clear need for change. But at the Recognition phase, an organisation may be unclear on how to develop it or lack a strategy. When a business understands its priorities, has invested into a digital strategy and has clear capability plans in place, this demonstrates capabilities at the Action phase.

Instinct and beyond: ‘Self-Disrupt or Die’

Even in the Instinct phase, the journey is never complete. We must continue to self-disrupt and continually test new ideas to remain ahead of the curve. In a recent article ‘Self Disrupt or Die’, Tom Goodwin, Head of Innovation at Zenith Media gives several great examples of companies that lack the ability to self-disrupt versus those that do:

“Airlines are endlessly asking for passwords, passport details, frequent flier numbers, and my birthday despite me giving them access to everything always. My cable provider seems to have 42 systems that work separately, in both duplication and parallel, but who can’t talk to each other”
….
 “If I call Airbnb, they seem to know who I am immediately. From Slack to Shyp, from Blue Apron to Amazon, Zuli Smart plugs to Maple, Postmates to Handy, I’m getting increasingly spoiled by companies that seem to just work”
Source: Forbes.com

So why does it seem so easy for some organisations? Simple, many organisations have started at the instinct phase – digital is who they are and core to every business decision. These businesses were born digital. For huge blue-chip organisations with legacy systems, change will ultimately take longer. For other organisations, the route to digital capability may not mean a sequential leap from one level to another. If a suitable culture, structure and skill base exists, the opportunity to jump from inaction to instinct may exist.

Future Challenge

We’re seeing lots of great work by educational establishments to equip young students with some of these skills through an increase in the availability of Science, Technology, Engineering and Maths (STEM) qualifications. However, more needs to be done to expose young people to real life scenarios within organisations, this will help encourage other core skills such as critical reasoning, agile project management and collaboration.  Our report explores some additional best practice examples from Amazon and Unipart, exploring collaborations between universities, government and industry.

The full report is available to access on Supply Chain Analysis. In the meantime, take part in our quick-fire survey below:

Thanks for reading, if you would like to discuss how IGD can help your business build its digital capability, get in touch – [email protected]

Alex Edge

Alex Edge

Supply Chain Insight Manager

Download our report to understand how supply chain excellence will be a source of growth and value for the future.

Get the latest industry news and insights straight to your inbox with our range of newsletters.

Identifying the trends that matter now is a challenging task. It’s certainly possible to identify 20 trends at random, which at some point in the future will have a significant impact. Assessing near-term relevance requires a deep understanding of the drivers of change.

At the start of each year, we put forward the trends we expect will influence and shape food and grocery supply chains in the year to come, helping both businesses and individuals prepare for change. To support our thinking, we’ve used several IGD research inputs covering retail, shopper insight and supply chain insight as “filters” to pass our ideas through, providing a holistic perspective on an industry in change.

Some trends threaten to take-off but never do, some fly under the radar and catch businesses cold. Some are simply hype. A small percentage are transformational. This year, we’ve put forward the following:

  1. Micro-fulfilment on a macro scale
  2. Eager experimenters
  3. Clarity on circularity
  4. Capitalising on connections

These trends will support the evolution of food and grocery retail, account for new shopper demands and help build a supply chain for growth. Let’s take a look at them in more detail.

Micro-fulfilment on a macro scale

Micro-fulfilment is an umbrella term used to describe small-scale warehouse facilities close to consumers. These represent the industry’s response to shoppers’ desire for speed and a choice of fulfilment options at nominal or no extra cost – something that continues to fragment food and grocery retail around the world.

To meet this need in a way that regulates the spiralling cost of fulfilment, retailers are innovating and experimenting with micro-fulfilment.

There is no cookie cutter design; facilities range from retrofitted garages, to Retail-as-a-Service (RaaS) automated fulfilment centres. Reflecting the growing urgency, a variety of very different solutions have emerged to meet local conditions and consumer demands.

One thing that is consistent is location. Largely located in urban areas, they tap into the gig economy for flexible, last-mile options where necessary. Due to the growing need for space, these sites don’t replace traditional facilities, they complement them.

Source: 1 Why obsolete warehouses on the ‘last mile’ are attracting institutional investors, Scott Marshall, CBRE

As you’d expect, technology is a key enabler, supporting operations within facilities, as well as outside of them, through apps for pick-up or delivery.

Eager experimenters

This trend reflects the need to better synchronise structured ways of working with an increasingly unstructured external environment. This is achieved by establishing and embedding a self-disruptive supply chain culture, underpinned by objectives that incentivise people to experiment.

As the supply chain moves closer to a management by exception function, the value people offer will be through the things humans do better than machines. As the emphasis shifts, supply chains must shape strategy and prepare accordingly. A sentiment called out in our recent Supply Chains for Growth research.

Source: Supply chains for growth, IGD Supply Chain Analysis, 2018

Food and grocery businesses are diversifying, playing in new areas. Simultaneously, new players are entering the industry, bringing with them new ideas. Where we look to learn and be inspired is changing as western markets exclusivity on best practice evaporates.

In 2019, improved understanding of new challenges and what it will take to succeed will be enhanced by looking externally. Inspiration from new sources will support brave, customer-centric decision-making. Translating “what’s new” into objectives will help define your part in the plan, formalising the expectation for more experimentation.

Clarity on circularity

Developing a more conscientious, sustainable supply chain, operating above minimum expectations provides an opportunity for competitive advantage. Turning this vision into reality will require a more circular approach to business activities.

When done well, circularity can generate both direct and indirect economic value. Keeping products, components, and materials at “their highest utility and value at all times”1 is key to dispelling the notion that sustainability, through circularity, is simply a noble cause.

Source: TOMRA Collection Solutions

The Ellen MacArthur Foundation describes the circular economy as “a framework for an economy that is restorative and regenerative by design. It entails gradually decoupling economic activity from the consumption of finite resources, and designing waste out of the system.”

Manufacturers, retailers and consumers all have a role to play if the circular economy is to thrive, but consumers are the catalyst for change. A progressive, ambitious Corporate Social Responsibility (CSR) strategy is now a base consumer expectation.

Capitalising on connections

In recent years, we’ve profiled several technologies that will influence supply chain development. Each is at different stages of its development; some are barely beyond the testing phase.

Developments continue, with progress on several fronts. This includes more reliable and affordable sensors in Internet of Things (IoT) devices, a better understanding of blockchain’s potential and appropriate uses, autonomous ‘things’ that are better able to interact with operators and environments. At the leading edge, 5G’s potential to improve data transfer rates and reliability and Deep Machine Learning (ML) supported by Quantum Computing could be game changing.

Source: Not just speed: 7 incredible things you can do with 5G, CNET, 2018

In 2019, breakthrough value will be achieved by connecting two or more of these to form cycles of generation, transmission and analysis delivering a truly digital supply chain. The collective impact of combining several potentially transformational technologies for use in supply chain operations will be a game changer.

The result will be an improved ability to serve time-sensitive consumers better, but supply chain people need to have strategic input along the way.

Conclusions

Not all of these trends selected will be a total surprise. What is new is our deepening understanding of the finer points, and that is why we have chosen them. The significance of this evolution will shape our thinking in 2019, informed by the clarity gained last year.

It’s crucial to consider how the trends highlighted will help you do the things you currently do better, as well as helping you do new things. There is no delivery date on brilliant basics. It’s a process of constant refinement.

Those that embrace the trends identified, exploiting them to deliver long-term value, while continuing to do the ordinary extraordinarily well will be set up to win in 2019 and beyond.

We’ll will be following these trends through 2019, producing research on global food and grocery supply chain development. The full report is available to read at igd.com/supplychainanalysis

Sources:

1 Ellen MacArthur foundation

Chris Irish

Chris Irish

Supply Chain Insight Manager

Download our report to understand how supply chain excellence will be a source of growth and value for the future.

Get the latest industry news and insights straight to your inbox with our range of newsletters.

The start of each new year provides us with a fantastic opportunity to assess where we are and what we want to achieve in the year to come.

It’s a time for locking down objectives and plotting a course to deliver them. While much of the focus is on how to do bigger and better things, a good proportion of what we end up doing is likely to be a build on last year’s activities. As ever, there are many more things to do than we have time to achieve, so making an impact in the right places is crucial. The natural tension between what we need to do – the basics – and what we want to do – the value-adds – at either end of the spectrum, can make the process of objective-setting a real challenge.

Bring the outside in

Perhaps the best place to start is with horizon scanning. The IGD Futures series provides an assessment of the food and grocery industry through several different lenses, from shoppers, online and physical retail and the supply chains that serve the industry. These brief reports are a great, free resource to support any horizon-scanning exercise!

Assess you own development needs

Understanding where the industry is heading allows you to assess how well equipped you are to influence and impact the future. An assessment of strengths and weaknesses through a gap analysis, and using it as the foundation to do the ordinary extraordinarily well, will set you up for success. And getting the basics right is a base expectation!

Doing so develops trust and a platform for deeper partnerships. Through our Supply Chain Fundamentals series, we’ve developed a suite of reports designed to support supply chain knowledge building. From responsiveness to distribution and S&OP to customer centricity, we’ve got it covered.

Identify the big opportunities

At the other end of the objectives spectrum lie the real value-adding opportunities. Having established a foundation, this is where the industry leaders will focus their efforts. Supply chain people need to be an engine for value creation, helping deliver growth through:

  • Reinventing services providing more choice, better experiences or greater convenience
  • Premiumising products, for instance, with local, ethical or sustainable credentials
  • Connecting more precisely to personal needs and lifestyles
  • Rethinking ways of working to continually reduce costs and waste

Engage to unlock value

Once you’ve set your course, the next step is to engage. Relationships and the ability to work effectively with people have a disproportionate impact on our success. We recently looked at what makes for successful business relationships and what gets in the way. Transparency and trust, information flow, a joint problem solving and learning mindset, and shared objectives were all identified as enablers of productive internal and external relationships. Time is the biggest barrier, and accurately determining where potential can be transformed into tangible value for both parties is the name of the game.

What next?

Action! I’ve provided my perspective on some of the key inputs for effective objective setting and provided some resources to help support you in creating them. Take a look at some of the materials I’ve highlighted – I hope you find them useful.

Remember to:

  1. Bring the outside in – how is the landscape evolving? Where do you fit in? What will you need to do to succeed?
  2. Assess your own development needs – build your knowledge by performing a gap analysis
  3. Identify the big opportunities – set objectives that stretch and challenge you to self-disrupt, focussing on value creation and growth
  4. Engage to unlock value – commit and embed through joint objectives

Chris Irish

Chris Irish

Supply Chain Insight Manager

Download our report to understand how supply chain excellence will be a source of growth and value for the future.

Get the latest industry news and insights straight to your inbox with our range of newsletters.

Presentations

11/04/2019
This is the first in a series of reports detailing the key findings from IGD’s supply chain leaders global survey. The survey collected responses from supply chain personnel around the world, providing insight on leading supply chains. This introductory report outlines the purpose of the research, provides context for the focus areas, introduces five attributes for success and explores how these can be exhibited by a leading supply chain and a supply chain leader.
04/04/2019
The ability to adapt quickly to change increasingly defines business success. This report details how an agile mindset and ways of working can deliver better outcomes in shorter time frames across the value chain.
27/03/2019
With almost a quarter of 2019 already behind us, this report rounds up the key supply chain themes that have emerged and the insight we've produced in Q1.

Access free videos, infographics and toolkits whenever and wherever you need to.

Making your business relationships pay

Relationships and the ability to work effectively with people have a disproportionate impact on our success. This series looks at what makes for good relationships, barriers to building and maintaining them and how they will evolve in future.     

  1. Characteristics
  2. What gets in the way?
  3. Evolution

15 October, London
term technology looks like The IGD Supply Chain Summit 2019 focuses on how to be customer centric. We’ll connect you with the retailers, suppliers and solution providers that are winning with customers.

Use our benchmarking reports to compare yourself to your peers and as a roadmap for future development.

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