Comment: how to lead in a disruptive supply chain world
Disrupt or be disrupted. That is the reality facing businesses and their supply chain organizations in the digital era, where business models change as quickly as new competitors or new market opportunities emerge.
Winning supply chains will be those that aspire to be the best while tackling the real transformational challenges that lie ahead.
Great supply chain leaders have to create a vision for what’s possible in the future amid the realities they face today. They need the ability to anticipate and respond to future events with integrated plans capable of responding to disruptive business scenarios.
That means redefining the notion of a supply chain. Traditional supply chain strategies that focused on incremental change, being risk-averse, and that are measured mostly on cost savings and efficiencies, will no longer win.
There are three key areas that supply chain leaders should focus on to create their vision for the future.
New customer experiences
We are entering the age of “experience” economies. This means that the way companies deliver customer value is different, and the customer experience is the new battlefield for competitive differentiation. The new competitive differentiator is understanding what customers want before they ask for it, sometimes solving problems customers didn’t realize they had.
Customers today are focused on getting what they want when they want it. Creating that superior customer experience can include delivering personalised, or smart products and services, with immediate access and delivery where and when the customer wants them. Or ensuring that corporate social responsibility (CSR) initiatives are built into the supply chain to provide sustainable purpose and products to customers.
These customer experiences will be delivered through disruptive business models called ecosystems fueled by virtual connections that enable companies to come together and deliver the customer experience in ways they couldn’t before.
The new virtual ecosystem
The concept of a business ecosystem is not new. Cars, for example, have evolved to become platforms delivering a customer experience that draws on a cross-industry ecosystem of partners, from the car manufacturer to companies that specialise in communications, entertainment and navigation. What is changing with these ecosystems is the rise of digital connections combined with digital products.
Products and services delivered through the ecosystems of the future are connected by electronic touchpoints called application programming interfaces (APIs). The connection is digital and the product is digital. These virtual ecosystems will disrupt supply chains.
Ecosystems are the future of the digital business world. Every company will compete in a virtual ecosystem. Supply chain leaders need to orchestrate product and solution development across the ecosystem, combining input from players previously unknown to them.
New digital technologies
Underlying and fuelling all of this are new digital capabilities. As supply chains build digital maturity, the use of different types of technology evolves. Businesses and supply chains will be ecosystem-driven, crowdfunded, socially agreed, 3D-printed, drone-inspected, sharing-economy-provided, usage-metered, predictively maintained and blockchain-assured. These new digital capabilities are also catalysing changes to the very notion of what we now mean by the supply chain.
Take artificial intelligence (AI), for example. The rise of AI is enabling a future in which a supply chain will be a dynamic, self-adapting organism to a constantly changing environment, much like the human brain.
The supply chain of the future could look like one in which customers and partners may be machines that are acting and negotiating on their own, with little to no human intervention. This supply chain can digest vast amounts of data, anticipate customer needs, predict when critical suppliers will shut down and then, autonomously and dynamically reconfigure the network to respond, making decisions to qualify and connect, all at the speed of digital.
Elon Musk's Boring Co. planning wider tunnels for freight
Elon Musk’s drilling outfit The Boring Company could be shifting its focus towards subterranean freight and logistics solutions, according to reports.
A Boring Co. pitch deck seen and shared by Bloomberg depicts plans to construct wider tunnels designed to accommodate shipping containers.
Founded by Tesla CEO Musk in 2016, the company initially stated its mission was to offer safer, faster point-to-point transport for people, particularly in cities plagued by traffic congestion. It also planned longer tunnels to ferry passengers between popular destinations across the US.
The Boring Co. completed its first commercial project earlier this year in April. The 1.7m tunnel system is designed to move professionals between convention centres in Las Vegas using Tesla EVs. It says the Las Vegas Convention Centre Loop can cut travel time between venues from 45 minutes to just two.
Boring Co.'s new freight tunnels
The Boring Co.'s new tunnel designs would allow freight to be transported on purpose built platforms, labelled as “battery-powered freight carriers”. The document shows that, though the containers could technically fit within its current 12-foot tunnels, wider tunnels would be more efficient. Designs for a new tunnel, 21 feet in diameter, show that they can comfortably accommodate two containers side-by-side, with a one-foot gap between them.
The Boring Co.’s new drilling machine, dubbed Prufrock, can tunnel at a rate of one mile per week, which is six times faster than its previous machine, and is designed to ‘porpoise’ - mimicking the marine animal by ‘diving’ below ground and reemerging once the tunnel is complete.
Tesla’s supply chain woes
Tesla is facing its own supply chain and logistic issues. The EV manufacturer has raised the price of its vehicles, with CEO Musk confirming the incremental hike was a result of “major supply chain pressure”. Musk replied to a disgruntled Twitter user, confused as to why prices were rising while features were being removed from the cars, saying the “raw materials especially” were a big issue.
Car manufacturing continues to be one of the industries hit hardest by a global shortage in semiconductor chips. While China’s chip manufacturing levels hit an all-time high in May, and the US is proposing a 25% tax credit for chip manufacturers, demand still outstrips supply. Automakers including Volkswagen and Audi have again said they expect reduced vehicle output in the next quarter due to a lack of semiconductors, with more factory downtime likely.
Top Image credit: The Boring Company / @boringcompany