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Digital Supply Chain STOKED!

This is our monthly blog featuring George Bailey, the Managing Director of the Digital Supply Chain Institute (DSCI) interviewing a series of supply chain leaders from around the world.

George is on the Advisory Board of Lockheed Martin and the American Productivity and Quality Center. He is the Executive Professor of Digital Innovation and Management at Pepperdine University and the Chairman of the Jackson Hole Ocean Sailing Team. George was based in Tokyo as Sony’s Chief Transformation Officer reporting to Chairman Sir Howard Stringer.  Previously he was a member of IBM’s leadership team and the global lead for the PriceWaterhouse Strategy Change business.

“I am lucky enough today to interview a good friend and colleague, Craig Moss. Craig is the Director of CGE’s Digital Supply Chain Institute (DSCI) and Chief Operating Officer of the Center for Responsible Enterprise and Trade (CREATe.org), an organization that helps companies prevent piracy, counterfeiting, trade secret theft, and corruption. Craig is also an Executive Advisor to Social Accountability International (SAI) where he has led numerous programs helping Fortune 500 companies implement improved supply chain sustainability practices.”

Welcome to STOKED! Craig, why did the DSCI develop a DSC Transformation Maturity Assessment?

 “In talking with our Global Experts Group (GEG) of 25+ companies, we saw that it is a journey for companies to transform their supply chain to a Digital Supply Chain (DSC). Maturity assessments are proven, valuable tools for companies to measure where they are and prioritize improvements. You can’t improve what you don’t measure. And with supply chains, virtually no company can stop and start from scratch. They must keep their supply chain running while they transform it.  As with any business process improvement, you should start with an evaluation of where your organization stands today and what improvements to prioritize.”

What exactly does it measure?

“The DSC Transformation Maturity Assessment (TMA) is designed to help you measure how you’re doing in each of the four foundational pillars of the DSC: Demand, People, Technology, and Risk. The DSC Transformation Maturity Assessment is applicable to companies in any manufacturing or service industry. The results will also help you to define a clear path and identify the small steps you can take to accelerate your transformation to a DSC. We designed it to help companies allocate resources, make investments and prioritize improvements.

The DSCI Transformation Maturity Assessment has two distinct parts: The Inside View from your employees and the Outside-In View from your suppliers and customers. Both look at the four critical areas of the DSC journey: Demand, People, Technology, and Risk. The DSC Transformation Maturity Assessment is measuring the underlying foundation that enables your supply chain performance results to be repeatable and continually improved to meet the changing business landscape. “

And how does the TMA work?

“A company completes the Transformation Maturity Assessment by answering a series of multiple-choice questions.  The short version of the TMA is available online and the maturity scores are generated based on the responses received. We encourage companies to answer the survey questions based on what they do today, not what they are planning to do. Companies have found different valuable ways to use the assessment. One very effective way is to pull together a cross-functional group and have the group agree on the answers to each question. It is a real eye-opener to hear the differing perceptions from colleagues. Another great approach is to have several different people answer the questions individually and compare results. You can add more insight by involving people from different organizations and different levels.”

How are companies doing on the transformation journey?

“We just released the Transformation Maturity Assessment on October 1st and we’ve had over 56 completed assessments. Still a very small and limited sample, but we do see some fascinating early results. Not surprisingly, the average maturity level shows that companies are at the early stages of their transformation. Let’s take a look at how people inside the company see their transformation on a scale of 1 to 3:

Demand: 1.3

People: 1.6

Technology: 1.3

Risk: 1.6

It’s interesting to see that companies are a little bit further along in the areas of People and Risk. We think this is because companies have well-established HR programs and they have been managing traditional supply chain risk for years. Demand has never really been a big part of the supply chain function, and supply chain does not appear to be a priority for technology investment.

The results from the Outside-In view are also interesting. Here the company asks their suppliers and customers to anonymously rate them on how they think the transformation to a DSC is going. Encouraging results here.

Demand: 65% One of the Best/Better Than Most

People: 69% One of the Best/Better Than Most

Technology: 71% One of the Best/Better Than Most

Risk: 69% One of the Best/Better Than Most

We’re eager to get more data from the Outside-In view so we can do more analysis comparing how a company sees itself versus how others see them.”

So where is this all heading?

“This is the business transformation story of the decade. Companies that execute a Digital Supply Chain will increase revenue, on average, by 10% and reduce costs by 20%. Game-changing numbers. It is not easy and changes have to be made in how Demand, People, Technology and Risk are managed. Our Transformation Maturity Assessment (TMA) tool can help speed forward progress.”

Thank you, Craig Moss. I am STOKED about how the TMA will help companies accelerate!