HOW SUPPLY CHAIN 3.0 CAN LEAD TO TANGIBLE BUSINESS BENEFITS

In this series, I will address the second question raised at the start of the previous blog series – “What are the benefits of supply chain 3.0?” Before answering that question, let me go over the three type of responses I generally get when I explain to people that supply chain 3.0 is real.

Most of the McKinsey (or their clone) trained strategists ask me to show data to back up this assertion. On the other hand, more intuitive executives (mainly from sales and marketing background, as I observe) ask me to explain the benefits of supply chain 3.0. Finally, the third group – those who I call the transformational leaders ask a simple question – how can we use the power of supply chain 3.0 in effecting beneficial business transformations.

First a caveat – no benefit accrues to those who do not act. And, not just any random action will suffice (though, in most cases, any action is better than no action); you need action based on cohesive, strategic thinking. That is the reason for the word “can” in the title of this post – all benefits are just potential energy till converted into reality by your kinetic energy.

Of course, I have not yet talked about how supply chain 3.0 differs from its previous version – supply chain 2.0. While the full detail of that is a subject for a future blog post, it will be necessary for us to know that these are different, and that supply chain 3.0 is a step change above supply chain 2.0. So, we will briefly delve into various avatars of supply chains as we look at the benefits of supply chain 3.0.

To understand the potential benefits of supply chain 3.0, let us look at the current business context. The best way for me to get you thinking along the same line as me is show you the following slideshow with just 14 slides from UNDERCURRENT:

It will probably take you no more than 7 minutes to quickly peruse this material and I have no intention of taking credit for the original thinking by the makers of this slideshow. That is why I am neither paraphrasing it, nor taking from it – something I see happening with my material more and more, even in the erudite circles.

My personal takeaway message from the above slideshow is that something immense is happening across the world of business. Combination of globalisation, bandwidth, rising standards in the east and financial adjustments in the west are creating both opportunities and threats everywhere.

Recently, someone sent me the link to a cartoon by marketoonist.com, which I show below for comment. They quipped to me that retail business model is toast. I agreed, but asked in return “which model is safe”. Think deeply enough, especially in line of the material in the slideshow and you can see the same threat lurking everywhere in many different forms.

Retail business model is toast?

Retail business model is toast?

But the old cliché is right. Every threat does hide an opportunity. I believe this despite the fact that I do not know enough Chinese language to attest to the fact that the Chinese character for threat and opportunity is the same (unfortunately, I could not learn any Chinese through-out the translation of my book into that language).

There is a lot of talk about VUCA – Variability, Uncertainty, Complexity and Ambiguity – when strategists discuss the business environment today. It is a bit ironic that so many military terms get incorporated in the strategy parlance during the time of duress.

However, one thing is clear – that old organisational models are not adequate anymore. New challenges need new responses. In the next entry of this blog series, I will discuss about business models, how they have changed and the effects on supply chain.

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  • Matthew says:

    Love this blog to read about SCM. specially concept of Variability, Uncertainty, Complexity, and Ambiguity is the benchmark of business. Thanks for the educational blog for supply chain managers.

  • […] How Supply Chain 3.0 Can Lead to Tangible Business Benefits (globalscgroup.com) […]

  • […] How Supply Chain 3.0 Can Lead to Tangible Business Benefits (globalscgroup.com) […]

  • […] have set the scene in the first entry of this blog series. Things are changing, moving, and old business models are not working anymore. That is why I […]

  • […] How Supply Chain 3.0 Can Lead to Tangible Business Benefits (globalscgroup.com) […]

  • Stockson says:

    Globalization could be a threat to the west as it offers both benefits and challenges. It can provide a tremendous opportunity for economic growth to improve the quality of life for many people. It can also lead to challenges with the welfare of workers, economies, and the environment as businesses globalize and shift their operations between countries to take advantage of lower costs of doing business in other world regions.

  • Jassica says:

    I completely agree with you that “no benefit accrues to those who do not act and using strategic thinking.” So true is this. Entrepreneurs, managers, and business owners alike constantly need to make on-the-spot decisions. It’s important that those decisions are made in a rational, level-headed state of mind, weighing all the options fairly. Carefully-honed strategic thinking skills are imperative to the profitability, growth, and general success of a business.

  • Ken says:

    Every threat does hide an opportunity, no doubt about it. In this reference, I believe that SWOT Analysis is a useful technique for understanding your strengths and weaknesses, and for identifying both the opportunities open to you and the threats you face. Used in a business context, it helps you to carve a sustainable niche in your market and industry.

  • Gill Bullen says:

    A very informative and interesting article Vivek Sood. Unpredictable events happening outside an organization can be negative or positive, but either present greater VUCA, which makes it more difficult for leaders to make decisions. An example of positive complexity is a product going viral and becoming an internet sensation. It actually reflects our increasingly unstable and rapidly changing business world.

  • Elizabeth says:

    There are many essential skills you need to be successful in the life sciences, especially in senior management or executive positions. One of the most important is mastering strategic thinking. Adopting a strategic mindset is essential for life sciences executives, managers, and entrepreneurs who must keep their organisations on the path to success. For a company to remain competitive, it has to adjust its flow of ideas and information to meet the dynamic nature of today’s business climate.

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