• Digital Technology

In this time of digital transformation, Supply Management professionals must continue to improve and innovate


Editor’s Note: Jim Baehr is Group Leader of Sourcing Strategies Group LLC


Technology will be key to maintaining a competitive advantage in tomorrow’s supply chains states the SCMR promotion for its upcoming 2019 NextGen Supply Chain Conference.  While this is undoubtedly true, Supply Chain professionals need to ask themselves “where do I fit?”  As the role of technology rapidly expands “how do I make a difference?” Let’s examine this need for important self-reflection using the classic framework of People, Process and Technology. 

Back when Mr. Kraljic wrote that Purchasing Must Become Supply Management he made various Process declarations – “Few companies today can allow purchasing to be managed in isolation from the other elements of their overall business systems. Greater integration, stronger cross-functional relations, and more top-management involvement are all necessary”.  The second element of the framework – People received just due in the HBR piece – “To meet the demands of the new supply strategy, the company must also upgrade the skills and experience it requires of key purchasing people.”  The third element Technology … is only referenced once – not as (something) used by supply managers but rather as supply managers being influenced by technology … maybe somewhat prophetic.

What does this history have to do with being a Supply Management professional in a digital age?  Undoubtedly the emphasis today is on Technology and this emphasis will only intensify.  A search of current trends in Supply Management produces many alliterations … automation, analytics, artificial intelligence … followed by big data, blockchain … and so on.  With such a dramatic change, Supply Management professionals must find, or better still, must create ways to maintain their relevance.  Otherwise we’ll take a back seat to Technology. 

“How?” The answer may be to improve and innovate.  Improvement and innovation are People driven processes that can, and do, deliver value.  As Supply Management professionals, we must continuously look for ways to improve what we do and how we do it.  Unfortunately, it’s too easy to be overcome by workload and distractions.  We focus on matters in our own silos. We may not give much thought about how our behaviors impact other processes in the business enterprise. We think only about today with little attention to tomorrow.

Worse, we rely on technology to be the de facto driver of continuous improvement.  If we want to enhance our relevance, we need to accept that improvement is our responsibility.  We need to use our natural senses to solve problems and deliver change for the better. Creativity and resourcefulness are arguably human faculties difficult to automate.

Paul Pelletier, former Senior Prosecutor in the U.S. Justice Department offers this insight, “doing the right thing takes commitment, competence and courage”.  To continuously improve takes commitment and competence – take a moment and think about it.  The more committed we are and the more competent we are, the more likely we’ll try to identify and pursue improvements. The more courageous we are, the more likely we’ll be to chase innovation.

It’s said improvement is evolutionary, and innovation is revolutionary.

Improvement starts with looking at a current process and asking, “can we do better?” Process isn’t just about how we do things. We need to be careful about being fixated on a process; otherwise, we become too concerned about following that process without regard for its outcomes.  Improvement happens when we enhance value or quality. Improvement takes competence and commitment.  Competence defined as the quality or state of having the knowledge and the skill to do what we do well. Commitment defined as the pledge to do it better.

Improvement is truly important, but organizations won’t survive doing the same things only better and cheaper. Organizations need innovation – “can we do something new, in a completely different way to achieve better results?”  Regrettably, in the current environment we equate innovation with technology – driven by something digital – not driven by people.  
As Supply Management professionals, it’s unlikely we’ll often be called on to be technology deciders, developers or implementers; but we don’t need technology to innovate. There are other ways we can impact our businesses and our organizations. We can rethink what we do. We can look for new methods.  We can consider unique alternatives. When we do, we need to be ready to articulate our ideas and our reasons why we believe something should change. Innovation is challenging. We need to experiment. We need to take risks.

Along with commitment and competence, innovation takes courage – the mental strength to take on something that’s difficult. “Why?” To quote Gijs van Wulfen of the FORTH Innovation Method – “Innovation does not stop at the first ‘No’. That’s the moment it really starts.”

For many years, as professionals we’ve asked the question “what will be the next great thing in Supply Management?”  We now know the answer.  The digital revolution is profoundly changing the way we do business.  It’s not a trend. It won’t go away.

Continuous improvement and innovation are People things where we can make a difference. It’s up to us to make improvement and innovation happen. We shouldn’t defer our People responsibilities. Like it or not … in this era of technology, making a difference as people is essential to furthering our title role as Supply Management professionals.