Creating a Customer-Centric Supply Chain

A Report from the 2017 Next Generation Operations Summit

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The complete version of this report is available as a PDF

Overview

Emerging from the disruptive forces of global regulatory flux, cyber-security risk, machine learning and automation advances, and omni-channel consumer shifts is the promise of the next generation of supply chain business models. In this digital era, chief operating officers and chief supply chain officers will have an unprecedented opportunity to harness new business models and be at the forefront of growth and enterprise value.

Yet realizing the potential of emerging ideas has always been difficult. Even for path-breaking innovations with transformative potential, the road to implementation can be filled with obstacles, twists and turns, and dead-ends. It begs the question: How can supply chain leaders break through barriers and leverage new business models to improve capacity, elevate customer experience, and increase enterprise value?

To help current and next generation supply chain leaders meet the demands of this digital era, Leadership for a Networked World and the Technology and Entrepreneurship Center at Harvard, in collaboration with Accenture Strategy, convened The 2017 Next Generation Operations Summit: Creating a Customer-Centric Supply Chain. The report includes findings and case studies from the Summit.

A letter from the Executive Director

Dr. Antonio Oftelie, Executive Director of Leadership for a Networked World, reflects on this year's summit and it's implications.

Read his letter here. >

“The supply chain of the future has to be very different from today. We have no alternative. We cannot as a company afford a tale of two cities, with a cutting edge high-tech front-end and a non-digital, non-connected supply chain at the back-end.”
Hans Melotte
Executive Vice President of Global Supply Chain, Starbucks

Report Insights

  1. Designing a New Supply Chain for the AB InBev and Keurig Joint Venture

    When Anheuser-Busch InBev, one of the largest brewing companies in the world, and Keurig Green Mountain decided to form a joint venture, the market took notice. During a presentation at The 2017 Next Generation Operations Summit: Creating a Customer-Centric Supply Chain, Scott King, who is leading supply chain strategy for the joint venture (JV), talked about what it’s been like to merge teams from two very different companies. The JV is set up as a research partnership. Both companies will contribute to developing new technology for an in-home beer and cocktail experience. The JV will operate as a separate entity from its parent companies but will be able to draw on the capabilities and pedigree of both as it evolves.

  2. Transforming the Supply Chain at Johnson & Johnson

    When Johnson & Johnson (J&J) got its start in 1886, there were just over one billion people in the world. Now, 131 years later, J&J serves just over one billion people per day worldwide. The company is responsible for many popular consumer brands, life-saving drugs, key service delivery components – a whole variety of products that are critical to the daily lives and business operations of many people. Maintaining the supply chain that ensures all of these varied products get where they need to go is more complex than ever before. To meet the needs of J&J's growing customer base, the company transformed its supply chain into an engine that supports innovation throughout the organization. Given the scale and scope of J&J, this is no easy task. With more than 60,000 people and 350 distribution centers globally, J&J fills over 100,000 orders a day sending products and treatments to hospital operating rooms, retailers, pharmacies, and millions of homes around the world.

"When we talk abouttechnology it needs to be less theory, more execution. What has worked well? What hasn't worked well? You learn more from your failures than you do successes."
Cheryl Boddiford
Global Director of Service Component Procurement, Siemens Energy

Summary

When organizations think about supply chain, much of the conversation is dominated by technology. Business leaders often wonder, “How can we be more like Amazon?” “How should I use Big Data or Internet of Things
(IoT) technology?” While these concerns reflect today’s dominant trends, they don’t capture the whole picture. Operations and supply chain professionals will be the first to tell you that immediate delivery is a great ideal but not always appropriate or realistic. Broader concerns around product quality and safety have to be folded into the mix. Setting up an Amazon-like delivery network may require many more distribution centers than anyone expects or can afford without third party assistance.

Ultimately, in order to create a successful, customer-centric supply chain, organizations will have to work through how to meet current expectations without sacrificing quality. The key for supply chain success is to create a roadmap that starts to phase in new technology smartly. In many cases that means running several small trial projects in different parts of the organization to find out what works before mandating a full-scale change from the top down.

As with everything in business, partner relationships are also critical to the supply chain of the future. Vendors, logistical support companies and others may all be able to increase efficiency in new and exciting ways, but that will require giving up some data ownership and being more transparent about each phase of the fulfillment process. Companies that are willing to take that step have already started to reap the rewards, but it requires a culture shift. For supply chain professionals to succeed in the future, depending on technology isn’t the only way forward—collaboration and data transparency across the supply chain will be critical as well.

The Executive Leadership Group

Leadership for a Networked World, and the Technology and Entrepreneurship Center at Harvard would like to thank the Executive Leadership Group for their vision and ideas that aided the development of this Summit.

Kevin Brown
Chief Supply Chain Officer
Dell
Pascal De Petrini
Executive Vice President Strategic Resource Cycles
Danone
Marc Engel
Chief Supply Chain Officer
Unilever
Bill Hutchinson
Senior Vice President of Supply Chain and Logistics
Comcast
Peter Kraemer
ABInBev
Chief Supply Officer
Mike McDermott
Vice President Specialty / Biotechnology Operating Unit
Pfizer
Hans Melotte
Executive President Supply Chain
Starbucks
Meri Stevens
Vice President Strategy and Deployment
Johnson & Johnson

Videos from This Summit

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Leadership for a Networked World’s applied research, student innovation challenge, and on-campus summit programs are an initiative of Dr. Antonio M. Oftelie, Innovation Fellow at the Technology and Entrepreneurship Center at Harvard (TECH), part of the Harvard John A. Paulson School of Engineering and Applied Sciences. TECH is a hub for students, faculty, alumni, and government and industry leaders to learn together, collaborate, and innovate. LNW accelerates these efforts by connecting leaders across sectors and developing cutting-edge thought leadership on innovation and organizational transformation.

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