Building a Twenty-First Century Supply Chain with Dr. Elouise Epstein
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Supplier Experience Live 2023
HICX’s inaugural Supplier Experience Live Conference was opened by Dr. Elouise Epstein, Partner at Kearney, who provided a keynote speech on building the twenty-first century digital supply chain.
Dr. Epstein set the scene with a real life story that highlighted the challenges we face today with 3rd party data exchange, and throughout the speech provided concrete directions on how we can overcome these challenges with the use of modern technologies and, of course, by listening to the voice of our suppliers.
In this article we recap the key points from the session, including:
- What is wrong with our “modern” supply chains
- The biggest problem with enterprise supply chains today
- The future of supply chain technology
- Why should you care about the voice of your supplier
- How to win together with your suppliers using data
What is wrong with our “modern” supply chains?
Elouise set the scene by sharing a story of an epiphany she had while getting her second COVID vaccine and receiving a handwritten note detailing the batch numbers, which led her to the thought, “How is it that my health relies on this piece of paper? Is this the best that our American healthcare system can do?”
Dr. Epstein recounts how she decided to draw up a simplified vaccine supply chain. She included every link in the chain, from source materials, manufacturers, the different levels of distributors, all the way to the primary care physicians. She then asked herself, ‘why can’t the data from all these parties flow seamlessly through each step and end up in my electronic health record?’
The issue is, of course, that none of these entities are integrated with each other, which, as Elouise puts it, is the biggest problem with most supply chains today.
“When we extend supply chains for cost optimization, we make them very brittle and susceptible to risk,” she explains. “Underpinning everything in our supply chains is data. Failure to exchange data between all parties creates fragility and risk.”
The biggest problem with enterprise supply chains today
The issue with enterprise supply chains today is that they are set up with wrong assumptions in mind – and success requires us to rethink our approach.
According to Dr. Epstein, “The problem is that this [today’s supply chain system] assumes the enterprise is ‘king of the hill.’ That every supplier is sublimated to them.” Furthermore, the current approach is to believe that all our required functionalities can be managed in a single end-to-end ERP system, she adds.
The most critical piece missing from ERPs, according to Elouise, are the interactions with 3rd parties. ERPs are not designed for this and that is why Dr. Epstein believes ERPs in this regard are dead.
What is the future of supply chain technology?
The future is much less linear and more layered, while still covering plan, source, make, deliver and reverse logistics, like before.
From a single enterprise viewpoint, this would retain all the same functionalities required today – and adds on even more, with risk and ESG requirements constantly evolving. However, the critical difference is that data is centrally managed in the cloud. This allows us to have a seamless user experience and intelligence from the data.
Outside of the organization, this means being able to share all the data needed with third parties. Because, as Dr. Epstein highlights, the interaction with our partners is where we are failing today and that’s what we need to change.
Why should you care about the voice of your supplier
In the second part of the keynote, Dr. Epstein brings in the supplier experience element, citing the issue of frequent miscommunication.
“So, this is where we have to put ourselves in our supplier’s shoes and start to understand their pain,” Elouise explains. “When this happens, we change how we approach them.”
She clarifies how, just like regular citizens, suppliers will want to own more of their data. The current inefficient ways of entering data into multiple ERPs will not be viable.
According to Dr. Epstein, what’s needed is a way for the user to own their data, allowing them to share it when and where they want, while keeping the data up-to-date and syndicated into all the different environments.
As Dr. Epstein puts it, “My argument is, we need to start moving to a digital wallet.”
We see it as consumers, she explains, with “our data being used for monetary gain” and us being able to control or benefit from this monetization. The same should be true for supplier data. We need to incentivize our suppliers to want to keep their data up-to-date because it benefits them as well, she adds.
How to win together with your suppliers using data
Dr. Epstein concludes, “If there is only one thing you take away from this, then it should be that third party data exchange is the key to the future.”
Elaborating, she explains that we need to build our supply chains from the suppliers’ perspective architecturally, which facilitates easy data exchange.
We do that, she says, by being in the cloud and by moving away from E2E legacy ERP solutions that are not designed for third party interactions. At the same time, Dr. Epstein advises we need to move towards solutions that allow suppliers to own and manage their data from one place, while also receiving the benefits of sharing data with us. This means giving them an incentive to keep data up-to-date, creating a win-win-win scenario for the enterprise, the supplier and the end customer.
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