Against the backdrop of a less certain world, what are the priorities for technology within the supply chain and how can we harness AI (artificial intelligence) whilst mitigating the risks?

Ross Dawson, Partner in the Operations, Procurement & Supply Chain Practice at Eton Bridge Partners, and Graeme Smith, Partner in the Digital & Technology Practice share insights from a recent roundtable dinner at Fortnum & Mason, exploring technology and the supply chain.

Ross and Graeme were joined by senior professionals from a range of sectors to debate the issues including:

• Ian Parkes, Director, Southbank Consulting Ltd and former Head of Inventory Centre of Excellence at GSK
• Nick Welby, Procurement and Leadership Consultant, previously Interim CEO of The Chartered Institute of Procurement & Supply, and former CPO of Imperial Tobacco
• Allan Farrell, CTO of Mandata Group
• Mark Lincoln, C-suite Transformation Leader and NED,
  Interim Transformation Director at Segen
• Richard Shipperbottom, Interim COO and owner of Applied Acumen – Business Consultancy Firm of the Year 2020, 2021, 2022 & 2023
• Shikha Hornsey, Chief Digital Information Officer at the Crown Commercial Service
• Chris Broe, Interim Group Head of IT at Valeo Foods
• Mike Hegarty, Transformation Specialist, Principal Consultant and Deliverist at mile20 Consulting
• Stuart Smith, Managing Partner at Tessiant

Data visibility, accuracy and cleanliness – we’re not there yet

Accurate, clean and visible data is essential to generate reliable data analytics and insights. But in many organisations, there is still work to do. High quality data delivered in a format which is understandable and kept under consistent review with clear ownership underpins all that sits above it.

For many of our attendees, this remains the key priority for technology within the supply chain. “There is a huge amount of data but translating that into the right outputs… well, that bridge hasn’t quite been crossed yet,” said Ian.

Allan agreed that real-time data insights were the priority, as that’s where innovation happens. Once you have the live data, you can start to optimise the business and drive efficiency.

Mike agrees that security and compliance are often prioritised, particularly after experiencing a cyber-attack. However, in his view, a balanced approach prioritises consolidating data, organising it effectively, and leveraging it to gain insights that can enhance business operations. This, he believes, fosters innovation, and drives business improvement.

Chris added; “Across our business it’s about trying to get visibility on everything. A hugely important part of that is in supply chain, as inventory is absolutely key. In many businesses 80-90% of turnover revolves around raw materials and stock. Once you have the data, you can ask the right questions, which lead to better decisions and you can then start to drive business value.”

Mark and Richard pointed out that managing data effectively and getting the basics right is an age-old challenge; “The same problems exist as twenty, thirty years ago, and ultimately it comes down to behaviours.” Stuart felt that a systematic approach correcting specific data pieces was one way to tackle this; “It’s very hard to come at it thinking ‘I’ve got to solve all the data first’, because you are never going to solve all the data.”

Data security is a real concern – prioritise prevention over cure

This was a subject that generated much discussion and is clearly at the forefront of supply chain leaders’ minds. Shikha said security is her number one technology priority, particularly in relation to the evolution of AI; “with AI, I would say my biggest worry is that the bad guys have a better, stronger, faster ability.”

A cyber-attack and its aftermath drains time and distracts the business. Allan has personal experience of this; his transport software business was hacked just over a year ago and his customers couldn’t access their data for weeks. “It was a devastating process to have to go through,” said Allan.

The emphasis needs to be on preventing rather than curing – far better to invest in protective measures than mop up the mess afterwards. Get data security right and it can be an enabling function giving confidence to enter new markets, launch new products and reach new consumers.

AI needs to be used to solve a specific business need

All agreed that the use of AI and ML (machine learning) in the supply chain was a massive opportunity, but that it must be used to meet a legitimate business need. Chris said the key is to start with a problem that needs solving; “You say ‘how do I solve this?’ and along the way, you weave in a bit of technology.”

Stuart also championed a pragmatic approach; “In understanding the business problem, you can limit the choice further by saying I only need this bit and it’s very targeted and then you can apply some machine learning and AI forecasting to do that specific bit.”

“We’ve got to understand what problem we are trying to fix,” agreed Nick; “it feels like AI is the new shiny new toy and things like getting the data right are falling by the wayside, but unless you solve those things, you’re never going to get the value of all those tools out there.” Chris agreed that the quality of the input is crucial; “Without that, what am I going to put AI on? Because it doesn’t exist on its own in isolation, it only works by being fed information.”

Leadership and influence

An effective supply chain runs in conjunction with the objectives of the business. Giving supply chain ‘a seat at the table’ and influence both at board and executive level ensures it’s fit for purpose, responsive and fully aligned to the broader strategy.

Finding the right leadership approach in terms of support and challenge was something that the attendees noted was crucial to retention and getting the best out of teams. Shikha summed up the leadership debate succinctly noting; “Successful businesses are built by people who want to be there.”

We would like to thank all of our attendees for sharing their insight and experience. For more information about Procurement, Operations & Supply Chain Transformation, get in touch with Ross. If you would like a conversation around Transformation, Digital & Technology, please get in touch with Graeme.