I am back after two days at the Gartner Supply Chain Symposium this week, held again at the Swan and Dolphin twin Disney Hotels and convention center.
It is an event that continues to gain attendees – more than 3500 this year- and momentum.
Some may know that the Gartner conference is rooted in the same basic event that was started by AMR Research as the Supply Chain Executive Forum back in the 1990s.
After Gartner acquired AMR in 2009, it infused additional organizational and marketing muscle into the conference, largely to the good. It is a sophisticated event.
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The bottom line here: to reach Drive, initiatives must produce value along several dimensions, say cost reduction with sustainability gains and risk mitigation. |
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The success led to the conference moving up in the Gartner event hierarchy, where in 2022 for the first time it was designation as a Symposium, and with that moved to Orlando from its longtime home in Scottsdale, AZ.
The event felt packed. It is well organized, with support staff everywhere and high-quality meals.
This week, I am simply going to review the day 1 keynote. More on the conference overall and summaries of key breakout sessions next week.
I have frankly been disappointed with the opening Gartner keynotes in recent years, so I was hoping for better from analyst Tom Enright, whom I have loosely known for a number of years and respect as a presenter and thinker.
He normally covers retail supply chain issues for Gartner from his base in the UK, but was given the keynote spot with a presentation on "The Move to Drive – Owning Supply Chain’s Value.” I shall explain.
He started with a skit of a supply exec being fired, as the board believes supply chain disruptions are over, it’s time to focus on cost cutting again, and the company thinks someone new is needed to do that.
“Anyone who thinks organizations can thrive by treating the supply chain just as a cost center is just flat out wrong!” Enright said when the skit was over, eliciting s cheer from the crowd.
We’re now in a state, Enright said, where “workloads are intense, priorities ever-changing, often dictated by other functions,” while many supply chain teams are fatigued or even burned out.
Yikes. Sounds like we need something new.
“You may be getting the creeping sense that the supply chain is losing control of its own destiny and its own strategic priorities” Enright added.
Supply chain leaders have a choice, Enright said – with one option being to maintain the current status quo, likely moving into a state of “drift” and trying to do more with even less.
The alternative?
Getting to a place where the supply chain delivers a lot more value and does control its own destiny and priorities, Enright said – and where supply chain innovation can be “unleashed.”
Editorial comment: should supply chain really control its own destiny and priorities? Isn’t the mission to support corporate strategies and objects, with the problem often being not enough of that alignment?
Back to Enright: What is this happy place he referenced, and how do you get there?
Gartner calls it “Drive,” and offers up four keys to reaching this state of enlightenment.
Step 1: Deliver “multi-value contributions.”
This, Enright says, recognizes that supply chain can deliver value in a lot more ways than reducing costs. Examples include product innovation, sustainability, customer experience, risk reduction, etc.
Gartner terms these other areas the “Citadels of Value,” a rather odd name it seems to me but let’s run with it.
The bottom line here: to reach Drive, initiatives must produce value along several dimensions, say cost reduction with sustainability gains and risk mitigation.
 While doing that, Enright said, companies have to create some boundaries about the areas the supply chain can play in, based in part on assessment of the team’s strengths and limitations.
Meanwhile the type of value that might be delivered of course varies by the business unit or product area being served. The same thinking in a sense holds true for whether to centralize or decentralize – this isn’t a binary decision, Gartner says, but should be looked at on process by process basis.
The second key to reaching Drive, Enright said, is creating opportunity from uncertainty. I will first note this is hardly a new idea. I remember my friend Jim Tompkins, CEO at the time, of Tompkins Associates, talking about “harnessing the power of change” 20 years ago.
Gartner observed that companies react differently with regard to uncertainty. There is one group that Gartner calls “fragile,” that typically suffer losses when facing uncertainty.
Another group of “resilient” companies hold their heads above water and come out about even.
But a third group of companies that Gartner calls “anti-fragile” consistently find ways to profit from uncertainty, though few are there yet. There were some recommendations on this from Enright that I don’t have room for here.
Step number 3 to get to Drive: Removing complexity through “designed simplicity.” Here, Enright started by noting that Gartner research finds an amazing 90% of companies say they are either in a supply chain transformation process or have one on the horizon.
The problem: a high percentage of transformation programs don’t meet timelines and fail to deliver expected benefits.
To change that dynamic, Gartner proposes what is calls “designed simplicity, which focuses on the user experience and change management.
There must be an intentional focus on simplicity in all aspects, Enright said – process, technology, addressing areas of uncertainty, etc.
Finally, the 4th step to reach Drive is use of AI to enhance the value of people.
Pretty basic stuff on this one – focus more on the people and change management to increase the likelihood AI of initiative success, which right now is low, Gartner says.
“AI isn’t here to replace people, but rather to enhance people,” Enright said, and he’s hardly the first to do so. Wish I was more confident he and the others are right, but I am doubtful.
In conclusion, Enright had this to say: “Your future is yet to be written, but you hold the pen. Seize this opportunity. Unlock and unleash this new value creation that will permanently change the relationship between your supply chain and your company.”
All told good stuff, very well delivered by Enright. My critique would be that there is nothing really connecting the four keys proposed for reaching Drive, so the Drive construct may not last that long.
My favorite idea from the session was the material on designed simplicity.
More from the Gartner Symposium here next week.
What is your reaction to this review of Gartner 2024? What would you add? Let us know your thought at the Feedback section below.
Your Comments/Feedback
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Jim Rice
Deputy Director - MIT CTL, MIT Center for Transportation and Logistics |
Posted on: May, 17 2024 |
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| Hi Dan - nice article. I really appreciate your candor, particularly on two points.
The concert of taking advantage of uncertainty actually goes back at least as far as 1921 to Frank Knight's book "Risk, Uncertainty and Profit" as Gary Lynch points out in his 2017 strategy + business article about the Uncertainty Advantage. Gary has been one person who has pioneered the more recent revival of the concept. (He also wrote a book about it). So....it's not new as you point out.
Secondly, and possibly more importantly - the supply chain is indeed supposed to support the go-to-market approach that the corporation/SBU has selected. Surely the supply chain can support and align in a variety of different ways and therefore has some choices. However, encouraging supply chain leaders to pioneer product changes and set their own priorities cf. the corporate goals, well, that may be received with cheers from those who want to do their own thing, but it will lead to mis-alignment which you rightly point out as being a critical problem.
Dan, it has been a while since I have crossed paths with you and your writing, but I am reminded of how thoughtful and honest you are in your work. Well done.
Jim
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