This site depends on JavaScript to run. Please enable it or upgrade to a modern browser that supports it.

ASCM Insights

Episode 28: Just What Is Digital Transformation?

title

Bob Trebilcock: Welcome to The Rebound, where we'll explore the issues facing supply chain managers as our industry gets back up and running in a post COVID world. This podcast is hosted by Abe Eshkenazi, CEO of the Association for Supply Chain Management, and Bob Trebilcock, Editorial Director of Supply Chain Management Review. Remember that Abe and Bob welcome your comments. Now to today's episode.

Bob Trebilcock: Welcome to today's episode of The Rebound, or just what is digital transformation? I'm Bob Trebilcock.

Abe Eshkenazi: I'm Abe Eshkenazi.

Bob: Joining us today is Brent Ruth. Brent is the Digital Transformation Lead for a large global industrial manufacturer. Brent, welcome.

Brent Ruth: Good afternoon.

Bob: Thanks for being here, Brent. In supply chain, we have a lot of terms to describe what we're doing. Continuous process improvement and lean manufacturing are just two that have been around for years, and I think everybody understands what those terms mean. Today there's a lot of buzz around digital transformation, but just what does it mean for supply chain organization to become digital? For those who haven't started on that journey yet, how do they identify where to start to gain the most value?

Those are questions we're going to put to Brent in today's episode of The Rebound, based on his experience at his firm. Brent, first, Digital Transformation Lead, your title is certainly a new supply chain role. As you see the task, what does it entail and what are your areas of responsibility? And maybe add to that, how did the role come about?

Brent: That's a great question. Digital transformation is a case word, and that it can mean different things to many different people, and for me, what digital transformation is really focused on bringing our manufacturing facilities, modernizing them, taking advantage of technology and sometimes, combination of different solutions to meet true business need, and to continue to advance and maintain market share and competitive advantage.

Abe: When you talk about the role and the expansion of that role, especially within supply chain, how does it differ from what you've done in the past and what new competencies are you looking for, and what are you trying to accomplish through digital transformation? Because these are skillsets that are expected for supply chain professionals today. Give us a sense, how does this transform the role?

Brent: That too is a very good question, Abe. I'll tell you that this role is really focused on the future of understanding both nascent and well-established technologies, and how they can be used together to transform operations and supply chain, and this role really came about as a conflux of three different technological advances. One is massive computing power, this is ubiquitous data and unlimited connectivity. The combination of those three in today's modern era, it's really ushering a revolution in manufacturing and supply chain.

How I came to this role was, I had a atypical career path progression event, in that, I've been on the business side from a supply chain perspective, I've led an SAP deployment, as well as understanding our information technology in an IT technical role, and now I'm back on the business side and really understanding the nexus of these three trends, allowing us to do what even a few years ago might be considered impossible.

That's what makes this role so exciting, is being able to focus firmly on the future and see real, tangible, propounding lasting effects of these technologies and solutions upon our modern global supply chain.

Bob: Brent, when you and I were talking to set this up, I'd mentioned that I was part of an event last year where there were three keynotes talking about digital transformation. One was from a large appliance manufacturer, who was talking about how they brought digital transformation to transportation and logistics. One was from a high technology laptop producer, who talked about how they were using blockchain to onboard new suppliers, and the last was a telecommunications company that was talking about digital transformation of procurement.

All three of them came from big global organizations talking about digital transformation, but had very different starting points and reasons for that. Can you put in context a little about some of the projects you've worked on in your organization, and just as importantly, why those projects were chosen-- what value they delivered and why start with those?

Brent: Excellent. I think one of the first thing you want to do with digital transformation is not chase technology for technology’s sake, you have to really equate it and focus on what are those key business requirements, really link those things together. For example, if you have an accounts payable organization that is focused on getting suppliers paid, and on time, by the way, they can be easily overwhelmed by the amount and varied invoices they get.

That's a great example of where moving beyond simple OCR into machine learning, we were able to train a machine learning-enabled RPA robotic process automation to teach it to read invoices in different languages, and automatically process those into our system of record. Now, the benefit from that is that the box doesn't take breaks, they don't take the weekend off, they don't argue as much or yearly evaluations, but they work continuously. The amount of volume of invoices that they're able to process really takes the burden of the manual input of the people, and allows that the humans in the process to focus on the true exception management, that’s one example.

Another example is using machine learning cameras for visual quality inspection. We started off on looking at our pre-delivery inspection, and what we had determined was that defects were escaping and were being discovered by the customer, which is obviously not what we want to happen. But we found in this case, predelivery inspection is something that is not a well-suited fishy lens, and by that, I mean, you give me a hundred-point checklist that I do eight hours a day, my eyes glaze over just thinking about it. Usually, is not the most ergonomic or rewarding task.

However, machines do it very well, and we were able to, again, show that machines don't get tired and they work. We were, again, able to take this routine and manual mundane process, automate it and free up those quality technicians again, the focus on more proactive while the measures to do more critical thinking through exception management and innovation. The other large area of focus is we're implementing-- We're getting ready to implement a DDMRP, which is again a good partner with a demander of an institute with ASCM, and we're excited about doing our first pilot of that solution next year.

Abe: Brent, it sounds like you guys are fairly mature in terms of your evaluation on where to start some of the paybacks. A lot of the listeners either just started their digital transformation or they're considering investment in their digital transformation. What advice do you give to those individuals or organizations that are taking a look to your examples, either the people, the processes of the tools as what can deliver the most value? Where do you start?

Brent: That's a great question, and really what I recommend to those that are just starting their journey is really to understand what the pain felt by the businesses are, and to be then able to look at either of those solutions that you already have in your enterprise landscape, or where those fall short. Then to be able to do research at such places like an ASCM Conference and others to be able to see what solutions and solution vendors are out there. To partner with universities as well, to really keep your finger on the pulse of what's happening in the marketplace, to then best be able to marry these blends, and bring that right solution to bear focus on that business need. If you can't tie it to a specific business problem or outcome, you're wasting your time.

Bob: Brent, before I ask my next question, I just wanted to step back one second for a quick one, when you talked about the inspection. Are you doing that at your supplier's facility so you catch any defects before they even leave the suppliers plant and get delivered to you? The reason I ask is I did a story with Pratt and Whitney a little bit back and they put in a program at their suppliers’ manufacturing lines to monitor for things out of parameter during the manufacturing process so they can catch defects even before the manufacturing is done. When you were talking about that visual inspection, I wondered if you were doing at an inbound at your facility or before outbound at your suppliers. Just a quick question.

Brent: Yes, Bob excellent question and again, focusing on where that business pain is, we're really at the tip of the tail this is prior to delivery to the customer, but to your point what we've been steadily doing is moving that same inspection upstream in the process that catch the defects where they're happening. That has provided a lot of value to being able to see that and capture those defects. The machine learning cameras have surprised us, they've found things that both the operator and the quality technician have missed, but ultimately, we see that going to your point all the way back into the supplier to be able to capture those critical defects even before they come into the facility.

Bob: Thanks for that. Back to our regularly scheduled programming. Supply chains, even digital ones, rely on people. No matter how digital, we still have people as a backbone. How do you put together a team for digital transformation? What are the skills you look for?

Brent: My team is a support team and I did handpick each of them but what I really focused on was being able to cover all the way from manufacturing engineering, all the way through logistics execution so a full end to end life cycle, but really looking for someone that had both process and technical expertise. That's not easily found but having worked on, again, throughout my career had known quite a few people in these functional areas was able to bring together and coalesce this team. I think that's the power, it’s having people that are cross functional in the aspect of knowing both business and the technical side of things. Is really where the magic happens.

Abe: Brent, oftentimes we seem to think that technology solutions are, in and of themselves, the answer. Oftentimes we see that one organization invests in a particular strategy and then you see a lot of follow-ons in terms of well, if they're using a robot or an autonomous vehicle strategy, we need one as well. How do you not become enamored with technology and focus on the value creation that you're discussing here as opposed to just another investment in technology that often seems to never end?

Brent: We like to call that pilot purgatory, Abe. We want to be able to escape that and provide real lasting value to the organization. So what that normally entails is we have a proof of concept, no matter what technology or solution that is out there, there's always that healthy skepticism, it might be great in that lab, they can at work in a real modern manufacturing facility on the shop floor. We need to prove that that works, for the values, the return on that investment, we have to prove that before we can scale it. We ended up doing a lot of small projects to begin with to prove that yes, that it has, it does what it claims it can, that it plays well with others, so to speak, that it delivers value, then we can scale it and that is really the key.

Bob: Brent, last question. You're the Lincoln Land Chapter President for ASCM. What do you see as the role of the APICS body of knowledge and digital transformation? How are you utilizing it? How would you like to see that go further?

Brent: As I began our discussion here this morning, I talked about how digital transformation can mean different things to different people, even when expressed in the same language, the same words can mean completely different things and this is really where I think APICS takes a leading role, is being able to establish that baseline through the body of knowledge, through using the APICS terms and definitions and processes. It really helps level the playing field.

Some of the worst kept secrets, I should say, of the industry is that modern ERPs like SAP, EQAD and others are built upon the APICS body of knowledge, and therefore being able to talk with academia and consultants and solution vendors, being able to talk using the same terminology and to have that same understanding is priceless, so really I see the role of APICS body of knowledge, being able to support the understanding of not just the underlying business processes of what digital transformation actually means to modern supply chains.

Abe: Really interesting, Brent. That is all the time that we have today, a special thanks to our guest, Brent Ruth, for discussing this exciting topic and what the future looks like for him. Bob and I would also like to invite all of our listeners to join us at ASCM CONNECT along with other supply chain leaders from Aceto, GE Appliances, and Flock Freight. You'll learn how leading supply chain professionals are achieving true and lasting results. Also, at ASCM CONNECT, we'll talk to Brent about AI in the supply chain during our fireside chat on October 25th, which is day one of our ASCM CONNECT. You can find quite a bit more information at ASCM.org. Finally, a special thanks to all of you for joining us on this episode of The Rebound. We hope there'll be back for our next episode. For The Rebound, I'm Abe Eshkenazi.

Bob: And I'm Bob Trebilcock.

Abe: All the best.

Bob: The Rebound is a joint production of the Association for Supply Chain Management and Supply Chain Management Review. For more information be sure to visit ASCM.org and scmr.com. We hope you'll join us again.

Bob Trebilcock: Welcome to The Rebound, where we'll explore the issues facing supply chain managers as our industry gets back up and running in a post COVID world. This podcast is hosted by Abe Eshkenazi, CEO of the Association for Supply Chain Management, and Bob Trebilcock, Editorial Director of Supply Chain Management Review. Remember that Abe and Bob welcome your comments. Now to today's episode.

Bob Trebilcock: Welcome to today's episode of The Rebound, or just what is digital transformation? I'm Bob Trebilcock.

Abe Eshkenazi: I'm Abe Eshkenazi.

Bob: Joining us today is Brent Ruth. Brent is the Digital Transformation Lead for a large global industrial manufacturer. Brent, welcome.

Brent Ruth: Good afternoon.

Bob: Thanks for being here, Brent. In supply chain, we have a lot of terms to describe what we're doing. Continuous process improvement and lean manufacturing are just two that have been around for years, and I think everybody understands what those terms mean. Today there's a lot of buzz around digital transformation, but just what does it mean for supply chain organization to become digital? For those who haven't started on that journey yet, how do they identify where to start to gain the most value?

Those are questions we're going to put to Brent in today's episode of The Rebound, based on his experience at his firm. Brent, first, Digital Transformation Lead, your title is certainly a new supply chain role. As you see the task, what does it entail and what are your areas of responsibility? And maybe add to that, how did the role come about?

Brent: That's a great question. Digital transformation is a case word, and that it can mean different things to many different people, and for me, what digital transformation is really focused on bringing our manufacturing facilities, modernizing them, taking advantage of technology and sometimes, combination of different solutions to meet true business need, and to continue to advance and maintain market share and competitive advantage.

Abe: When you talk about the role and the expansion of that role, especially within supply chain, how does it differ from what you've done in the past and what new competencies are you looking for, and what are you trying to accomplish through digital transformation? Because these are skillsets that are expected for supply chain professionals today. Give us a sense, how does this transform the role?

Brent: That too is a very good question, Abe. I'll tell you that this role is really focused on the future of understanding both nascent and well-established technologies, and how they can be used together to transform operations and supply chain, and this role really came about as a conflux of three different technological advances. One is massive computing power, this is ubiquitous data and unlimited connectivity. The combination of those three in today's modern era, it's really ushering a revolution in manufacturing and supply chain.

How I came to this role was, I had a atypical career path progression event, in that, I've been on the business side from a supply chain perspective, I've led an SAP deployment, as well as understanding our information technology in an IT technical role, and now I'm back on the business side and really understanding the nexus of these three trends, allowing us to do what even a few years ago might be considered impossible.

That's what makes this role so exciting, is being able to focus firmly on the future and see real, tangible, propounding lasting effects of these technologies and solutions upon our modern global supply chain.

Bob: Brent, when you and I were talking to set this up, I'd mentioned that I was part of an event last year where there were three keynotes talking about digital transformation. One was from a large appliance manufacturer, who was talking about how they brought digital transformation to transportation and logistics. One was from a high technology laptop producer, who talked about how they were using blockchain to onboard new suppliers, and the last was a telecommunications company that was talking about digital transformation of procurement.

All three of them came from big global organizations talking about digital transformation, but had very different starting points and reasons for that. Can you put in context a little about some of the projects you've worked on in your organization, and just as importantly, why those projects were chosen-- what value they delivered and why start with those?

Brent: Excellent. I think one of the first thing you want to do with digital transformation is not chase technology for technology’s sake, you have to really equate it and focus on what are those key business requirements, really link those things together. For example, if you have an accounts payable organization that is focused on getting suppliers paid, and on time, by the way, they can be easily overwhelmed by the amount and varied invoices they get.

That's a great example of where moving beyond simple OCR into machine learning, we were able to train a machine learning-enabled RPA robotic process automation to teach it to read invoices in different languages, and automatically process those into our system of record. Now, the benefit from that is that the box doesn't take breaks, they don't take the weekend off, they don't argue as much or yearly evaluations, but they work continuously. The amount of volume of invoices that they're able to process really takes the burden of the manual input of the people, and allows that the humans in the process to focus on the true exception management, that’s one example.

Another example is using machine learning cameras for visual quality inspection. We started off on looking at our pre-delivery inspection, and what we had determined was that defects were escaping and were being discovered by the customer, which is obviously not what we want to happen. But we found in this case, predelivery inspection is something that is not a well-suited fishy lens, and by that, I mean, you give me a hundred-point checklist that I do eight hours a day, my eyes glaze over just thinking about it. Usually, is not the most ergonomic or rewarding task.

However, machines do it very well, and we were able to, again, show that machines don't get tired and they work. We were, again, able to take this routine and manual mundane process, automate it and free up those quality technicians again, the focus on more proactive while the measures to do more critical thinking through exception management and innovation. The other large area of focus is we're implementing-- We're getting ready to implement a DDMRP, which is again a good partner with a demander of an institute with ASCM, and we're excited about doing our first pilot of that solution next year.

Abe: Brent, it sounds like you guys are fairly mature in terms of your evaluation on where to start some of the paybacks. A lot of the listeners either just started their digital transformation or they're considering investment in their digital transformation. What advice do you give to those individuals or organizations that are taking a look to your examples, either the people, the processes of the tools as what can deliver the most value? Where do you start?

Brent: That's a great question, and really what I recommend to those that are just starting their journey is really to understand what the pain felt by the businesses are, and to be then able to look at either of those solutions that you already have in your enterprise landscape, or where those fall short. Then to be able to do research at such places like an ASCM Conference and others to be able to see what solutions and solution vendors are out there. To partner with universities as well, to really keep your finger on the pulse of what's happening in the marketplace, to then best be able to marry these blends, and bring that right solution to bear focus on that business need. If you can't tie it to a specific business problem or outcome, you're wasting your time.

Bob: Brent, before I ask my next question, I just wanted to step back one second for a quick one, when you talked about the inspection. Are you doing that at your supplier's facility so you catch any defects before they even leave the suppliers plant and get delivered to you? The reason I ask is I did a story with Pratt and Whitney a little bit back and they put in a program at their suppliers’ manufacturing lines to monitor for things out of parameter during the manufacturing process so they can catch defects even before the manufacturing is done. When you were talking about that visual inspection, I wondered if you were doing at an inbound at your facility or before outbound at your suppliers. Just a quick question.

Brent: Yes, Bob excellent question and again, focusing on where that business pain is, we're really at the tip of the tail this is prior to delivery to the customer, but to your point what we've been steadily doing is moving that same inspection upstream in the process that catch the defects where they're happening. That has provided a lot of value to being able to see that and capture those defects. The machine learning cameras have surprised us, they've found things that both the operator and the quality technician have missed, but ultimately, we see that going to your point all the way back into the supplier to be able to capture those critical defects even before they come into the facility.

Bob: Thanks for that. Back to our regularly scheduled programming. Supply chains, even digital ones, rely on people. No matter how digital, we still have people as a backbone. How do you put together a team for digital transformation? What are the skills you look for?

Brent: My team is a support team and I did handpick each of them but what I really focused on was being able to cover all the way from manufacturing engineering, all the way through logistics execution so a full end to end life cycle, but really looking for someone that had both process and technical expertise. That's not easily found but having worked on, again, throughout my career had known quite a few people in these functional areas was able to bring together and coalesce this team. I think that's the power, it’s having people that are cross functional in the aspect of knowing both business and the technical side of things. Is really where the magic happens.

Abe: Brent, oftentimes we seem to think that technology solutions are, in and of themselves, the answer. Oftentimes we see that one organization invests in a particular strategy and then you see a lot of follow-ons in terms of well, if they're using a robot or an autonomous vehicle strategy, we need one as well. How do you not become enamored with technology and focus on the value creation that you're discussing here as opposed to just another investment in technology that often seems to never end?

Brent: We like to call that pilot purgatory, Abe. We want to be able to escape that and provide real lasting value to the organization. So what that normally entails is we have a proof of concept, no matter what technology or solution that is out there, there's always that healthy skepticism, it might be great in that lab, they can at work in a real modern manufacturing facility on the shop floor. We need to prove that that works, for the values, the return on that investment, we have to prove that before we can scale it. We ended up doing a lot of small projects to begin with to prove that yes, that it has, it does what it claims it can, that it plays well with others, so to speak, that it delivers value, then we can scale it and that is really the key.

Bob: Brent, last question. You're the Lincoln Land Chapter President for ASCM. What do you see as the role of the APICS body of knowledge and digital transformation? How are you utilizing it? How would you like to see that go further?

Brent: As I began our discussion here this morning, I talked about how digital transformation can mean different things to different people, even when expressed in the same language, the same words can mean completely different things and this is really where I think APICS takes a leading role, is being able to establish that baseline through the body of knowledge, through using the APICS terms and definitions and processes. It really helps level the playing field.

Some of the worst kept secrets, I should say, of the industry is that modern ERPs like SAP, EQAD and others are built upon the APICS body of knowledge, and therefore being able to talk with academia and consultants and solution vendors, being able to talk using the same terminology and to have that same understanding is priceless, so really I see the role of APICS body of knowledge, being able to support the understanding of not just the underlying business processes of what digital transformation actually means to modern supply chains.

Abe: Really interesting, Brent. That is all the time that we have today, a special thanks to our guest, Brent Ruth, for discussing this exciting topic and what the future looks like for him. Bob and I would also like to invite all of our listeners to join us at ASCM CONNECT along with other supply chain leaders from Aceto, GE Appliances, and Flock Freight. You'll learn how leading supply chain professionals are achieving true and lasting results. Also, at ASCM CONNECT, we'll talk to Brent about AI in the supply chain during our fireside chat on October 25th, which is day one of our ASCM CONNECT. You can find quite a bit more information at ASCM.org. Finally, a special thanks to all of you for joining us on this episode of The Rebound. We hope there'll be back for our next episode. For The Rebound, I'm Abe Eshkenazi.

Bob: And I'm Bob Trebilcock.

Abe: All the best.

Bob: The Rebound is a joint production of the Association for Supply Chain Management and Supply Chain Management Review. For more information be sure to visit ASCM.org and scmr.com. We hope you'll join us again.

 

Use of Cookies

We use cookies to personalize our website’s content and ads, to provide social media features and to analyze our traffic. We also share information about your use of our site with our social media, advertising and analytics partners who may combine it with other information that you’ve provided to them or that they’ve collected from your use of their services. You consent to our cookies if you continue to use our website.