The route to leaner, greener supply chains: Part one – Discovery

The impact of Brexit, the pandemic and now the geopolitical situation in Eastern Europe, has brought into sharp focus the need for people, data and technology to come together to create optimised business workflows and processes. It’s a supply chain journey that many organisations have already embarked on, but it’s one that is a marathon rather than a sprint.

In any journey, however long, the first step is always vitally important; to know where you are heading, you first need to know where you are coming from. And for manufacturers embarking on digitally transforming their supply chains, it’s no different; they must have a true understanding of their baseline. What is currently in place now?

The reality is that within many manufacturing organisations, there are legacy processes that have existed for a long periods. Therefore, the chances of the people who put them in place still being at the company are remote, meaning the knowledge around how those processes fundamentally operate is no longer in-house. As a result, understanding the processes that exist can be challenging.

Gary Cassell, Industry Lead – Global Manufacturing and Automotive, Appian Corporation, picks up the story: “In our work we find that a lot of organisations don’t consider this discovery piece, because they already think they know what they have. However, they miss the fact that over time, hidden factors get created; processes that are manual or spreadsheet driven, which are therefore, outside of the regular system. This can make change management really difficult. Change is hard to make even when you know your baseline, but when that gets missed you impact the operational and execution sides of the business.”

Furthermore, a very high percentage of industrial emissions take place in the supply chain, so if an organisation is aiming at sustainability targets, and that much sought-after leaner, greener supply chain, transformation can actually be driven in the wrong direction altogether if manufacturers don’t have a clear vision on their baseline. If there is significant activity that is taking place outside of the regular process and planning tools, then you could be making adjustments and driving certain business rules that aren’t built into system.

“Digital transformation should start at home,” adds Steve Evans, Director of Research, Industrial Sustainability at Institute for Manufacturing (IfM), University of Cambridge. “When you know how to use digital well it becomes easier and more effective to get your suppliers using digital technology in a way that works for you. Unfortunately, we do not have enough ‘doing it at home’, and this is actually a bigger cause of difficulty than supply chain complexity.”

“Process mining, for example, can identify complexity factors really quickly and give you that baseline, so you know where your starting point is,” continues Gary. “This will minimise risk around any transformational activity to either improve customer experience, achieve sustainability targets or just take waste out of the operation.”

Size of organisation can also muddy the waters when it comes to having a clear vision of your baseline. As businesses grow over time, either organically or by acquisition, they end up with siloed data sources. Organisations try, in many cases, to pull those together, but it is often a manual effort which takes time and is open to mistakes.

Not only that, it can result in an organisation essentially trying to drive their transformation whilst looking in the rear-view mirror, as Gary explains: “Often companies will be pulling data together with some kind of large aggregation activity, whether it’s a data lake or data warehouse. Those types of activities have value, but from a transformation standpoint, you need to work with data that’s open and live, rather than looking at last week’s aggregated information to try and make today’s decisions.

“The way one site uses information could be different from another. Therefore, complexity gets created across the entire organisation purely because of those siloed systems and processes. That complexity makes it very difficult to drive the true transformation efforts that organisations are after today.”

In addition, many of the legacy processes that currently exist were designed before the topic of sustainability and net zero became so prominent at manufacturing board level. Old processes were predominantly architected around efficiency and didn’t necessarily take into account future considerations around how the process, no matter how big, is contributing to a company’s carbon footprint.

Gary adds: “If you’re looking at driving transformation and building a greener, leaner supply chain, you can’t just apply a method of thinking retrospectively. Manufacturers are still striving for efficiency, but there are other factors that weigh into the conversation such as sustainability and customer experience.”

Supply chain insight

“Currently we are at the start of our journey with regards to visibility. We are implementing planning calendars based on the knowledge within our supply chain and trying to work with suppliers to update our E2Open system more regularly.”
Supply Chain Director for an international cosmetics manufacturer

“Due to the impact of the global semiconductor issue, communication and escalation processes have been improved via regular reviews with key suppliers to understand constraints and risks, and in some cases by tracking documents.”
Plant Director for an automotive parts supplier

“We are improving supply chain visibility by widening integration across our systems and enterprise, plus improving connectivity up and downstream to ensure visibility of supply chain risk and opportunity. The use of data is also providing real-time decision support to be able to respond to dynamic situations.”
Head of Supply Chain at an aerospace and defence company