Thriving in Disruption, Driving Toward Quality 4.0: The 2019 Summit

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More than 200 quality professionals convened in Dallas for the third Quality 4.0 Summit, where they explored the impact of people, process, and technology on the ability to thrive in disruption.

Over two days, sessions on key issues including robotic process automation, IoT, cybersecurity quality culture, and voice of the customer shed light on emerging trends. One term—“digital”—was heard in practically every session.

Throughout the event, discussions centered on establishing a successful path toward Quality 4.0. Attendees at various stages of progress shared their perspectives on shaping an enterprise-wide strategy, celebrating quick wins, and communicating effectively to ensure their organizations’ initiatives were equally successful and sustainable.

For those who joined us at this year’s Summit, thank you for being a part of this growing event! If you were unable to attend, read on to learn about key trends and discoveries from the week in Dallas. We look forward to seeing you at our 2020 Summit and will have additional details in the coming weeks.

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Dave Ryeson, Boston Consulting Group, and Elmer Corbin, ASQ, co-presented the Quality 4.0 Takes More Than Technology research report’s findings and perspectives on requirements for successful Quality 4.0 implementation to a packed room at the Summit. In this highly anticipated session, Ryeson and Corbin discussed the global online survey and deep-dive interviews with key manufacturing industry leaders and practitioners in the field of Quality 4.0. The survey evaluated the 200+ survey participants’ views on Quality 4.0 today and in the future to understand critical use cases, current and future impact, major challenges, and roles and skills needed to evolve. This report was created collaboratively by Boston Consulting Group, ASQ, and the German Association for Quality (DGQ).   

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Attendees at the 2019 Quality 4.0 Summit had the unique opportunity to hear from leaders in innovation, technology, and transformation at three exceptional keynote addresses at the event.

Rick Smith, founder of Fast Radius, Inc., kicked off the conference. His presentation began with the story of Arie Kurniawan, a young Indonesian man who participated in an open innovation challenge. The challenge was to redesign a bracket that attaches an airplane’s jet engine to its wing. Despite having little manufacturing experience, Kurniawan’s design beat out over 1,000 other submissions, thanks to his use of a new design technique enabled by industrial 3D printing technology.  This story provided a background for a deeper dive into the changes in the quality community. Smith said Quality 4.0 would disrupt practically every industry, but would also create new jobs, roles, and opportunities for quality professionals.

The next morning, futurist and Pendio Group CEO Todd McLees continued the examination of challenges and opportunities related to digital disruption, the exponential rate of innovation, workforce of the future, and digital ecosystems. McLees offered insights into the rate of change in innovation, the challenges it presents, and the need for new levels of collaboration to re-skill, up-skill, and “new-skill” the workforce of the future. He also encouraged attendees to visit the website willrobotstakemyjob.com to better understand roles and positions susceptible to disruption.  His parting advice: Connect with stakeholders in your organization to build and work within ecosystems that will increasingly become a key competitive advantage.

The Summit’s closing keynote was provided by Elmer Corbin, former head of cloud and artificial intelligence solutions delivery for IBM Watson Health and 2018 ASQ Board of Directors Chair, who looked back on transformative moments in his education and career, and revealed the vital role quality played in fostering innovation in each phase. Corbin offered a compendium of lessons learned throughout the conference, urging attendees to prepare for the future by expanding their multipurpose soft skills and comprehensive digital roles. By developing digital enablers for Quality 4.0 implementation, Corbin noted, quality professionals can build an effective common data architecture foundation. He concluded his address by reminding the audience to celebrate the wins along the way and focus on proof of concept use cases that bring value and solve real pain points.

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Quality Conversations offered attendees the chance to sit in on interviews with seven leaders from different industries and roles to ask them about their experiences with Quality 4.0. The participating quality leaders shared their insights on Quality 4.0, focusing on getting started, prioritizing data handling, and the need for good communication skills. They are summarized below.  

Getting Started With Quality 4.0

  • Start small, or with a pilot project to test an idea or a technology.
  • Begin with a quick win to demonstrate the value and possibilities to get buy-in.
  • Be adaptive and learn as you go.
  • Start now! Learn the capabilities of different options and how to think about them.

Big Data

  • Prioritize the data and getting a handle on it first−data needs cleaning before using.
  • Artificial Intelligence (AI) initiatives should come after knowing your data, the problems you’re solving, and your business objectives. When it comes to big data you need a plan; you must be prepared and malleable.
  • Comprehensive, real-time data and massive datasets can tell you things you weren’t expecting, and that may come with new opportunities, immediately actionable decisions, and risks. This can be disruptive, but it’s better to disrupt your own organization before your competitors disrupt you.

Communication Skills

  • All types of communication skills are imperative to successful Quality 4.0 implementations. Machines and systems need to be able to communicate with each other. Humans need to be able to communicate with the machines and the systems. Humans need to communicate about the machines and systems with other humans, particularly those in other departments and top management.
  • Quality professionals need to be able to navigate the various communication streams and effectively explain why Quality 4.0 matters to each stake holder and describe the role they play in the bigger picture, the bottom line, and strategic plans.
  • Change management is Critical

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There were numerous engaging and innovative sessions available throughout the entire conference. Based on attendees feedback, three sessions stood out from the crowd.

Leading Through Change & Ambiguity: Overcoming Barriers With Better Management Strategy

Speaker: Matt Meuleners, FOCUS Training.

Significant change creates ambiguity that can lead to low morale, anxiety, and risk avoidance behaviors. Understanding the steps to change management increase the chances that your organizational change will be successful. This module focused on tactics learners can use to navigate through emotional and technical challenges that accompany significant change. Participants discussed with peers and develop a plan for engaging their own teams.

People and Process Skills for Industry 4.0

Speaker: Peter Merrill, Quest Management  

The World Economic Forum report, the ‘Future of Jobs’, Identifies 3 critical competencies, and 3 vital areas of knowledge. The vital competencies are Emotional Intelligence which supports Creativity, an imperative in the future, and Creativity, in turn, essential for Complex Problem Solving. Three vital areas of knowledge for a future career are, Big Data, Artificial Intelligence (AI) and Machine Learning which merge one into another. In this session, attendees discussed the importance of these skills and knowledge areas in the workforce.

Motivational Drivers: Which Ones Exist on Your Teams?

Speaker: Matt Meuleners FOCUS Training

In this session, attendees explored motivation and what drives it from a biological, social, emotional, or cognitive perspective. Participants were introduced to the wide range of motivational drivers through an interactive demonstration called Money Jump, in which volunteers push themselves to reach progressively higher targets. They engaged in a “live case study” method to teach each of four sets of theories on motivation. In this approach, participants used a real-world situation from their own work or personal life as a sample to apply each framework and its best practices. 

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A highlight of the Summit was “Quality 4.0 @ Work”, a collaboration session guided by table captains Puneet Dhillon, Kerri Clifton, and Pablo Romo, who are members of our Emerging Quality Leaders Program. Attendees gathered in focused tabletop groups to discuss the factors driving their company’s move toward a Quality 4.0 implementation, vital roles in the pursuit of Quality 4.0, barriers to execution, and identifying key stakeholders in the process. Some of the Discussion highlights were captured by the table captains:

Is your company spending more time or money on Quality 4.0 efforts today than in recent years? If so, what impact has this had on your role in the organization?

All participants agreed that there has been an increased spend on Quality 4.0 efforts, but the ways in which this has affected them−and their organization−differed.  

  • Quality 4.0 changed my job by making more important data more accessible, raising quality awareness within all functions in the company.
  • The introduction of new data measurement and telemetry into consumer products has made possible the making of better decisions faster.
  • After the collapse of oil prices in 2015, my company realized they had to automate. Production yields and profits needed to be improved. The quality department was cut, and engineers were brought in to meet the end user’s needs. A cloud-based application was Implemented to collect structured data. We are still looking into next steps.

What drives your company’s move toward a Quality 4.0 implementation?

Participants believed that their company’s driving force was that Quality 4.0 initiatives will lead to more efficient performance.

  • My company’s goal was to improve processes to improve margins.
  • We would like to use data more efficiently and to show clients the benefits of quality in helping growth. Data being collected varies in usefulness. I am at this Summit to collect ideas.
  • Formerly, many of our solutions were operated without an overarching data strategy. This resulted in isolated technologies. Now it is time to bring them together with Quality 4.0 to be more effective.

What role(s) within your company has been identified as vital to ensuring Quality 4.0 success?

The roles identified differed due to industry and organizational goals.  

  • We decided to bring in more data analysts and data scientists to make sense of data for better implementation. Quality Engineers will then make changes based on the data.
  • IT programmers, system validators, data scientists, data base gurus, and UI designers have been identified as vital roles. 
  • The biggest challenge is for management to get people within the organization on the same page. Operations leaders are needed to align and bring consistent QMS that can affect all divisions within an organization.

What prevents or slows your organization’s progress of Quality 4.0 implementation(s)?

Participants cited that many of the hindrances to progress were regarding buy−in, overall understanding of initiatives, and maintaining high levels of engagement across several departments. 

  • Internally, getting people involved and aware of changes. Assigning roles so they are a part of the implementation. These are both roadblocks I’ve faced.
  • Quality 4.0 is a new concept and not fully understood. It is critical to understand the depth that is needed to communicate the need, as well as the benefits of implementation.
  • Building confidence to work with a diverse group of backgrounds, and from companies with very different levels of Quality 4.0 deployment, is challenging. It was necessary to ensure the conversation remained relevant for all participants.

qty-4-exhibitors

Argolytics

The Argolytics’ new cloud-based software application is Trendable™. This lightweight and affordable quality control SPC reporting software was built specifically for small and medium-size manufacturers. Try it today at GoTrendable.com.

Azimuth

Engage with this value-added reseller systems integration expert and top-notch quality and compliance consulting company. The team thrives on providing clinical, regulatory, and quality software and services for your organization.

Bisk

Bisk provides a suite of operational excellence programming from multiple renowned non-profit universities including Villanova, Michigan State, and Florida Tech. Offerings range from single courses to certificates in undergraduate and graduate degrees.

Creato Performance Solutions

Creato has been providing technologies and training to support operational excellence for over 20 years. Today, Creato is a leading provider of Lean Six Sigma deployment and Project Portfolio Management productions including the award-winning COMPASS ® Quality Management System.

MoreSteam

MoreSteam provides technology, training and services to help organizations achieve a skillful balance of customer-driven quality, cost, and speed. Expertise encompasses Lean Methods, Lean Six Sigma, Agile Process Design, and PDCA.

Celebrate World Quality Month in 2019!

World Quality Month

Join The Celebration

Join the global quality community to celebrate World Quality Month 2019! World Quality Month (WQM) is a worldwide celebration of quality. It’s a time to showcase the advancement and valuable contributions quality professionals make in businesses, communities, and institutions. This month allows us to shine a light on the industry and the individuals striving to provide excellence through quality.

ASQ has created several downloadable activities and materials to help celebrate! Share your Celebrations with us on social and join the World Quality Month discussion on myASQ.

Banners

These banners and headers can be used in e-newletters, webpages, email headers, and other digital channels. Choose from four different sizes, designed to accommodate multiple templates. DOWNLOAD BANNERS

Which Guru Are You?

World Quality Month 2019 What Guru Are You Illustration

Have you ever wondered which Guru you have the most in common with? Now you can find out by taking our Which Guru Are You? quiz! Select the link below and be sure to share your results on social. TAKE THE QUIZ

Desktop and Mobile Wallpapers

Download a WQM wallpaper to showcase the month-long celebration on your desktop and cell phone. Choose from two different designs. DOWNLOAD WALLPAPER

Trivia

Each day we will be sharing quality trivia and interesting factoids on our Twitter account @ASQ. At the end of each week, we will share the trivia tiles on this page for you to download. Check back each day to download new tiles. DOWNLOAD TRIVIA TILES

Quality Memes

Have your expectations ever differed from reality? This series of images is a lighthearted depiction of some of the misconceptions individuals may face when entering and working in the quality industry. DOWNLOAD MEMES
Have you had a similar experience? Share your story with us on social!

Posters

Encourage others to celebrate by downloading printable posters. These posters can be hung in your personal workspace or communal areas in your workplace. Two different sizes are available to accommodate multiple spaces. DOWNLOAD POSTERS

Change Leadership

 

How can quality professionals become successful change leaders?

Robert Mitchell

Change Leadership Process schematic by KnowledgeBrief (KBM)

Change Leadership Process schematic by KnowledgeBrief

The Baldrige Criteria defines change management as a leadership-induced process that involves transformational organizational change that leadership controls and sustains. It requires dedication, involvement of employees at all levels, and constant communication. Transformational change is strategy-driven and stems from the top of the organization. Its origin may be from needs identified within the organization and it requires active engagement of the whole organization.

McKinsey & Company states that, “Change management as it is traditionally applied is outdated. 70 percent of change programs fail to achieve their goals, largely due to employee resistance and lack of management support. We also know that when people are truly invested in change it is 30 percent more likely to stick.”

My 35+ years of experience is that the effective change leader possesses 3 critical skills:

  • Communication
  • Facilitation
  • Project management

The effective change leader must be able to communicate a compelling business case for change and a clear call to action throughout the organization: up, down and across. The change effort should be in alignment with the organization’s vision, values and strategic plan. The change initiative must be communicated regularly with a clearly understood strategy, with action plans and key metrics that are cascaded and deployed down to each department and individual. Change progress must be consistently measured and frequently reported against the established goals or targets.

The effective change leader demonstrates strong facilitation, influence and collaboration skills necessary to build support, remove barriers and reduce resistance to change. The change leader must be able to enhance/ build the Systems & Structures necessary to drive the required change, reward desired behaviors and prevent organizational backsliding. The effective change leader identifies the key stakeholders and implements influence strategies to gain their support in helping to “model the behaviors that create the experiences needed to change beliefs resulting in actions that deliver expected results” (The Oz Principle: Culture of Accountability). An all-too-often over-looked influencer is the organization’s “Keyhub” – those employees not part of the official managerial org chart, but whose experience/opinion/ insight is highly sought and respected among his/her peers, colleagues and subordinates. The identification of and collaboration with the keyhub is an important networking strategy to help lead successful change efforts in any organization.

The effective change leader must be able to marshal the resources and competencies necessary to support the change, adapt to challenges, and keep the change project on schedule and in budget. The change leader should follow a formalized change strategy or framework incorporating the methods, tools and technical assistance necessary to lead the process and coach the people through change. Three common models of a change management process are:

 

Nicole Radziwill

Change is hard only because maintaining status quo is easy. Doing things even a little differently requires cognitive energy! Because most people are pretty busy, there has to be a clear payoff to invest that extra energy in changing, even if the change is simple.

Becoming a successful change leader means helping people find the reasons to invest that energy on their own. First, find the source of resistance (if there is one) and do what you can to remove it. Second, try co-creation instead of feedback to build solutions. Here’s what I mean.

Find Sources of Resistance

In 1983, information systems researcher M. Lynne Markus wanted to figure out why certain software implementations, “designed at great cost of time and money, are abandoned or excessively overhauled because they were unenthusiastically received by their intended users.” Nearly 40 years later, enterprises still occasionally run into the same issue, even though Software as a Service (SaaS) models can (to some extent) reduce this risk.

Before her research started, she found these themes associated with resistance (they will probably feel familiar to you even today):

  1. To avoid resistance, get top management support and obtain user involvement in the design process
  2. Technically sound systems are less likely to be resisted than those with frequent downtime and poor response time
  3. Users resist systems that are not “user friendly” (assertions by EDP equipment vendors);
  4. All other things being equal, people will resist change (receive wisdom);
  5. People will resist an application when the costs outweigh the benefits (receive wisdom).

By studying failed software implementations in finance, she uncovered three main sources for the resistance. So as a change leader, start out by figuring out if they resonate, and then apply one of the remedies on the right:

Radziwill

As you might imagine, this third category (the “political version of interaction theory”) is the most difficult to solve. If a new process or system threatens someone’s power or position, they are unlikely to admit it, it may be difficult to detect, and it will take some deep counseling to get to the root cause and solve it.

Co-Creation Over Feedback

Imagine this: a process in your organization is about to change, and someone comes to you with a step-by-step outline of the new proposed process. “I’d like to get your feedback on this,” he says.

That’s nice, right? Isn’t that exactly what’s needed to ensure smooth management of change? You’ll give your feedback, and then when it’s time to adopt the process, it will go great – right?

In short, NO.

For change to be smooth and effective, people have to feel like they’re part of the process of developing the solution. Although people might feel slightly more comfortable if they’re asked for their thoughts on a proposal, the resultant solution is not theirs — in fact, their feedback might not even be incorporated into it. There’s no “skin in the game.”

In contrast, think about a scenario where you get an email or an invitation to a meeting. “We need to create a new process to decide which of our leads we’ll follow up on, and evaluate whether we made the right decision. We’d like it to achieve [the following goals]. We have to deal with [X, Y and Z] boundary conditions, which we can’t change due to [some factors that are well articulated and understandable].”

You go to the meeting, and two hours later all the stakeholders in the room have co-created a solution. What’s going to happen when it’s time for that process to be implemented? That’s right — little or no resistance. Why would anyone resist a change that they thought up themselves?

Satisficing

Find the resistance, cast it out, and co-create solutions. But don’t forget the most important step: recognizing that perfection is not always perfect. (For quality professionals, this one can be kind of tough to accept at times.)

What this means is: in situations where change is needed, sometimes it’s better to adopt processes or practices that are easier or more accessible for the people who do them. Processes that are less efficient can sometimes be better than processes that are more efficient, if the difference has to do with ease of learning or ease of execution. Following these tips will help you help others take some of the pain out of change.

John Hunter

In order to lead efforts to improve the management of an organization understanding how people will react to change is critical. For that reason I have written about change management often on this blog since I started publishing it in 2004.

In, Why Do People Fail to Adopt Better Management Methods?, I wrote:

It seems that if there were better ways to manage, people would adopt those methods. But this just isn’t the case; sometimes better methods will be adopted but often they won’t. People can be very attached to the way things have always been done. Or they can just be uncomfortable with the prospect of trying something new.

Lead change efforts requires paying attention to the existing conditions: the culture, the motivation to adopt this change and/or the motivation to resist it, the history of change where the change is being attempted and the reasons the change is desired (by at least you and hopefully others). And then you need to build a case for the change and manage the process.

In some case it isn’t that complicated, there is interest in the change from a critical mass of people, the change isn’t that difficult, the advantages are obvious to many people and no one has a strong interest in resisting the change (that has the power to make adopting the change difficult). In that case you are lucky, but that is often not the case, even though many attempts to change are managed with the hope that no real effort will be needed to get the change adopted.

Those that successfully lead change efforts know when to invest the effort in getting the change adopted. They study (and often can sense) where the effort will need to be placed in this particular effort and plan ahead to support the adoption of the change and to avoid problems that can greatly set back the efforts to improve the existing system.

And they put effort into creating a culture that will make change efforts easier going forward. We need continual improvement of how we work and that requires continual change. We need to build systems that support that and coach people so they are comfortable with that.

I included some ideas on how to grow your circle of influence: which would be useful development strategies for someone seeking to become a successful change leader.

Communication is an Important Part of Any Change Effort

I believe the best way to communicate such changes is to explain how they tie into the long term vision of the organization. This requires that such a vision actually exists (which is often not the case). Then all strategies are communicated based on how they support and integrate with that vision. In addition that communication strategy incorporates an understanding about what weaknesses with past practices are addressed by this new strategy.

Often organizations have a poor history with failed change efforts, and the larger the effort the more likely it was to have been problematic. Pretending that poor history doesn’t exist and being surprised by resistance to change is not a sensible way to manage. But it is a common one. Instead, to be successful, after past failed efforts, show that you know the history and have learned from it and are taking steps to make this change effort more successful than past efforts.

Change Management – Post Change Evaluation and Action

There are many reasons the change may need to be iterated over to adapt it to different conditions. The important factor, that is far too often overlooked, is to collect evidence on the result of the change as it is deployed and to study that evidence to determine if the improvement is able to be deployed more broadly without modification. It may be that you learn more PDSA is needed as part of the process to deploy it more broadly.

Using the PDSA is an extremely valuable tool to aid change efforts. The process of using it requires you to evaluate the success of the change after the change is deployed. That may seem an obvious thing to do, but it often is not done. And often those in the work know nothing improved and become more cynical about any future change attempts. But those charged with leading the change effort often have incentives to move on and ignore the results.

To help create a culture that value continual improvement find projects that would be good candidates for visible success that matters. Use the ideas here and in the linked posts to make those efforts successful and then build on those successes.

If this is done right the organization will continually grow the ability to improve and successfully adopt changes that are worthwhile. Your job of leading change efforts will get easier (though you might take on much bigger and more complex changes so that can again add challenges and keep you engaged).

Luciana Paulise 

Many companies around the world are moving towards an agile way of work to be able to tackle constant changes and capture the opportunities those changes bring. As per a survey done by McKinsey 37 percent of respondents said their organizations are carrying out company-wide agile transformations. Why? Because today the only constant is change. “Agile organizations can develop products five times faster, make decisions three times faster, and reallocate resources adroitly and quickly” based on the research “Leading agile transformation:  The new capabilities leaders need to build 21st-century organizations”.

So the question now is, what is the role of the leader in these agile organizations? Agile companies work in small teams that are multidisciplinary and autonomous, some don’t have leaders, some simply have facilitators to ensure successful interactions among team members, suppliers and customers. New leaders need to let go of micromanaging the day-to-day activities to become success facilitators. They will set a long-term vision, promote interaction across the organization, provide support to unleash team member’s idea and define priorities.

Leaders are no longer “bosses” of the people on their team, customers are. That’s why structures in agile companies flatten to:

–  Allow fast and online communication top down, bottom up and inside out.

– Facilitate fast decision making within the team, without the need to wait for management approval

– Ensure everybody is connected to the customer needs, and the needs of each of the team members

In agile companies, everybody can become a change leader within their teams, depending on the task at hand, so everybody needs to be trained to CARE for their team, through four main habits:

  • Connect: Communicate the vision, values and objectives that drive the team and build the network of stakeholders required. Team members how decide the best way to accomplish the goals.
  • Ask: ask more questions at the front-line to deeply understand results, instead of advocating opinion or direction. Analyze risks and always look for outside-in perspectives from the customers to make decisions with the team.
  • Respect: Build confidence and trust, foster open communication and respect differences in the workforce to allow multidisciplinary teams to thrive. Strengths, skills and ideas work at their best when relationships are based on mutual acceptance.
  • Empower: Prioritize objectives visually, build systems and team routines, promote self-discipline and time management and encourage immediate problem-solving. Avoid constant updates, briefings, micromanagement, and approvals, all very costly.

Luigi Sille

How can an individual become a successful Change Leader?  

Every organization or institution has to deal with change.  No one can hide or run from it. In the last couple of years the world has been changing at a rapid pace.

Normally, accepting change and going through the change process is NOT easy. Change is very hard for humans to accept (it’s human nature), to get everyone on board is a big challenge. The success of change depends upon the people, so everyone is important.

To manage, and/or coordinate the whole change process, effective leadership is one of the main components necessary to achieve a successful transition. For me personally, it is the KEY to success.

Which leadership skills contribute to someone becoming a successful Change Leader?

Communication

Communication is one of the most important skills in becoming a successful Change Leader. A successful Change Leader is one that can communicate, but also LISTEN to the group.  The listening part is very important, it is the moment to get information, feedback, or possible ideas in order to improve: TOGETHER.

Always communicate WHY we need the change, WHAT is going to change, and the impact the change is going to have. The benefits that change can have for the organization, and for the whole group. Open and honest communication helps a successful change leader gain the trust of the group, and in its turn it will help the overall change process.Maintain a communication strategy, and always check if it is actually working.

Collaboration

Bring everybody together (teamwork) to make decisions, plan (encourage the employees to be innovative, creative) and execute. This is so critical.  That feeling of being part of the process gives everyone a sense of pride. A positive organizational culture motivates the group, and that sense of belonging to the organization inspires loyalty.

It strengthens their commitment. This results in no or almost no resistance to the change process. Everyone is important. Fix small team problems on the way, otherwise it will have a negative impact on the whole process.

Commit

A successful Change Leader shows his commitment to the change. Be a role model.  Maintain control over the whole process: identify and focus on priorities. Maintain a clear purpose.

His or her behavior / beliefs is important to the rest of the group.

If the leader doesn’t believe, or doesn’t commit, it will have a negative impact on the change process, therefore the chance of FAILURE is extremely high.

If there is No effective leadership present, effectively implanting change will almost definitely fail.

A successful Change Leader has to remember that:

  • Leading change is not a ONE man job.
  • He has to believe in the team
  • Motivate the team
  • Be a role model
  • Pass responsibilities to other leaders in the group
  • Has to obtain a collection of skills to keep on top of change.
  • Communicate
  • And also: listen to the group

End to End Supply Chain

What are some best practices for planning and implementing an end to end supply chain?

Robert Mitchell

Investopedia defines an E2E SCP as, “…a term used to describe products or solutions that cover every stage in a particular process, often without any need for anything to be supplied by a third party. It also embraces a philosophy that eliminates as many middle layers or steps as possible to optimize performance and efficiency in any process.”

E2E Supply Chain graphic via LeanCorp.com

Traditional supply chains involve individual organizational silos that often result in inefficient overall performance and constrained supplier relationships. An end-to-end view of the complete supply chain begins with product design, supplier selection and management, then scheduling, production, distribution, and should include after-sale customer service. A holistic E2E Supply Chain integrates all revenue and expense streams. Effective E2E Supply Chains enable disruptive innovations in customer experience by delivering greater visibility of product design & performance and manufacturing capabilities, as well as order management and inventory status.

Building an effective E2E Supply Chain requires the implementation of an Enterprise Resource Planning (ERP) system that bundles top-level business processes such as Concept-to-Launch, Procure-to-Pay and Order-to-Cash functions as well as Hire-to-Retire and Sustain-and-Retain human capital asset management processes to present a holistic view of supply chain operations, while improving organizational strategic planning & deployment, decision-making, workforce planning and overall business growth.

Best Practices in E2E Supply Chains:

  • Inventory Management via Lean principles to eliminate waste (including unnecessary inventory) and reduce non value-added activities thereby reducing lead times and order fulfillment errors, resulting in improved customer perceptions of organizational responsiveness.
  • Customer Demand Planning that uses the customers’ order history, market analysis, seasonality, competitive landscape, and other factors to understand your customer needs better than they do enabling a more stable and predictable planning process.
  • Human Capital asset planning and management that assesses current workforce capability and capacity in response to strategic plans, focusing on the organization’s core competencies and strategic advantages.
  • A Lean Management System deploying data-driven root cause analysis where everyone from the CEO down to the intern is a problem solver, coupled with stronger supplier & vendor collaboration can strengthen an organization’s ability to plan effectively and respond to changes with greater agility.

Superior network connectivity between the supplier – manufacturer – customer can be a distinct competitive advantage to building strong business relationships. Working within and across the network to improve quality, service and cost at all touch points is a winning formula to help assure business success.

Nicole Radziwill

Supply chains are the lifeblood of any business, impacting everything from the quality, delivery, and costs of a business’s products and services to customer service and satisfaction to ultimately profitability and return on assets.

Stank, T., Scott, S. & Hazen, B. (2018, April). A SAVVY GUIDE TO THE DIGITAL SUPPLY CHAIN: HOW TO EVALUATE AND LEVERAGE TECHNOLOGY TO BUILD A SUPPLY CHAIN FOR THE DIGITAL AGE. Whitepaper, Haslam School of Business, University of Tennessee.

Industry 4.0 enabling technologies like affordable sensors, more ubiquitous internet connectivity and 5G networks, and reliable software packages for developing intelligent systems have started fueling a profound digital transformation of supply chains. Although the transformation will be a gradual evolution, spanning years (and perhaps decades), the changes will reduce or eliminate key pain points:

  • Connected:Lack of visibility keeps 84% of Chief Supply Chain Officers up at night. More sources of data and enhanced connectedness to information will alleviate this issue.
  • Intelligent:87% of Chief Supply Chain Officers say that managing supply chain disruptions proactively is a huge challenge. Intelligent algorithms and prescriptive analytics can make this more actionable.
  • Automated:80% of all data that could enable supply chain visibility and traceability is “dark” or siloed. Automated discovery, aggregation, and processing will ensure that knowledge can be formed from data and information.

Since the transformation is just getting started, best practices are few and far between — but recommendations do exist. Stank et al. (2018) created a digital supply chain maturity rubric, with highest levels that reflect what they consider recommended practices. I like these suggestions because they span technical systems and management systems:

  • Gather structured and unstructured data from customers, suppliers, and the market using sensors and crowdsourcing (presumably including social media)
  • Use AI & ML to “enable descriptive, predictive, and prescriptive insights simultaneously” and support continuous learning
  • Digitize all systems that touch the supply chain: strategy, planning, sourcing, manufacturing, distribution, collaboration, and customer service
  • Add value by improving efficiency, visibility, security, trust, authenticity, accessibility, customization, customer satisfaction, and financial performance
  • Use just-in-time training to build new capabilities for developing the smart supply chain

One drawback of these suggestions is that they provide general (rather than targeted) guidance.

A second recommendation is to plan initiatives that align with your level of digital supply chain maturitySoosay & Kannusamy (2018) studied 360 firms in the Australian food industry and found four different stages. They are:

  • Stage 1 – Computerization and connectivity. Sharing data across they supply chain ecosystem requires that it be stored in locations that are accessible by partners. Cloud-based systems are one option. Make sure authentication and verification are carefully implemented.
  • Stage 2 – Visibility and transparency. Adding new sensors and making that data accessible provides new visibility into the supply chain. Key enabling technologies include GPS, time-temperature integrators and data loggers.
  • Stage 3 – Predictive capability. Access to real-time data from supply chain partners will increase the reliability and resilience of the entire network. Enterprise Resource Planning (ERP), Manufacturing Execution Systems (MES), and radio frequency (RFID) tagging are enablers at this stage.
  • Stage 4 – Adaptability and self-learning. At this stage, partners plan and execute the supply chain collaboratively. Through Vendor Managed Inventory (VMI), responsibility for replenishment can even be directly assumed by the supplier.

Traceability is also gaining prominence as a key issue, and permissioned blockchains provide one way to make this happen with sensor data and transaction data. Recently, the IBM Food Trust has demonstrated the practical value provided by the Hyperledger blockchain infrastructure for this purpose. Their prototypes have helped to identify supply chain bottlenecks that might not otherwise have been detected.

What should you do in your organization?

Any way to enhance information sharing between members of the supply chain ecosystem — or more effectively synthesize and interpret it — should help your organization shift towards the end-to-end vision. Look for opportunities in both categories.