In Pursuit of the Cognitive Supply Chain

Stephen DeAngelis

February 25, 2020

In many digital transformation-focused discussions, the “enterprise” and the “supply chain” are separate conversations. Separating the discussions is a mistake. Lora Cecere (@lcecere), founder of Supply Chain Insights, insists, “The supply chain IS Business, not a department within a business.”[1] In other words, the enterprise and its supply chain must transform in lockstep. So where is the enterprise headed? Brian Solis (@briansolis), a digital analyst and futurist, believes enterprises are headed towards a post-digital transformation world. He explains, “What if I told you that most digital transformation roadmaps were no longer enough to compete for the future? In reality, digital transformation has become foundational. It’s necessary that every organization embrace digital transformation to modernize infrastructure, operations and most importantly, performance. There is no end state, however. It’s an endless process. To compete for the future now, enterprises must start to plan for a post digital transformation world.”[2]

Solis believes the post-digital transformation world will witness the rise of cognitive enterprises. He writes, “Executives must look beyond modernization toward AI, machine learning and other emergent technologies that are already starting to shape next-generation enterprises. … The cognitive enterprise landscape is starting to take shape.” If I’m correct about the importance of the enterprise and its supply chain transforming in lockstep, then supply chain professionals need to prepare for the cognitive supply chain.

Towards the cognitive supply chain

As Solis notes, digital transformation helps establish a foundation upon which digital enterprises are built. Digital enterprises must then aspire to become intelligent enterprises with intelligent supply chains. Heidi Benko, Vice President of solutions strategy and marketing with Infor Supply Chain, states, “[An intelligent supply chain is a] supply chain that’s data-driven in nature. It leverages data and insights, and applies machine learning and artificial intelligence, to drive processes and decisions. We’re at this point now because supply chains have changed so rapidly, but also because we have a lot of new digital technologies available. We’re getting real-time signals from sensors, versus a human interpreting and updating the data. And we’re applying machine learning to identify new patterns and insights, and help users make smarter decisions.”[3] Like Solis, Benko believes digital transformation is foundational. “To get to the intelligent supply chain,” she states, “a digital foundation is required. That means no more emails, phone calls and spreadsheets. The end-to-end process has to be digital.”

Both Solis and Benko mention two of the technologies enterprises require to become “intelligent” — artificial intelligence and, a subset of AI, machine learning. However, AI, in all its forms, requires data and no enterprise or supply chain will ever become “intelligent” without the right data. Data, in turn, is necessary but not sufficient. Robert J. Bowman, Managing Editor of Supply Chain Brain, notes, “Data by itself is ‘dumb’.”[4] Advanced analytics are required to mine the insights data contains. In the supply chain arena, much of the data needing to be analyzed will come from sensors connected to the Internet of Things (IoT). As one source concludes, “An intelligent supply chain is built upon digital technologies that empower businesses to keep up with the speed of their customers’ needs and expectations. Digitally transforming how we source and deliver goods to end-customers helps improve visibility and agility, reduce costs and operate a customer-centric supply chain. Multi-enterprise business networks are revolutionizing how companies bring together the necessary parties, documents and data into a digital ecosystem. Artificial Intelligence, machine learning and the Internet of things help turn data into intelligence to make and execute supply chain decisions.”[5]

Analysts from Gravity Supply Chain Solutions use Abraham Maslow’s Hierarchy of Needs theory as a framework for discussing digital supply chain transformation.[6] Maslow’s hierarchy of needs makes the simple observation that a drowning man is thinking about his next breath and little else. Maslow’s pyramid is normally represented in a pyramid like the image showed below. Starting at the bottom of the pyramid, the layers represent the following needs: Physiological, Safety, Love/Belonging, Esteem, and Self-Actualization.

Image result for Maslow Heirarchy of needs png transparent"

Gravity analysts write, “Reimagining this theory allows us to align supply chains in the modern world as they transition from traditional legacy systems to become cognitive and enable the ultimate goal — the best-in-class customer experience.” In their hierarchy pyramid for the digital supply chain, the layers (from bottom to top) are: Evaluate (problem statement); Analyze (research); Synthesize (strategy); Connected (agile); and Fully Digitized. Concerning the top of the pyramid, they note it is “cognitive.” They conclude, “To become the ultimate leader and reach the pinnacle level and command the prime spot at the top of the pyramid — a cognitive, best-in-class digital business, you need to identify unexpected issues in real time today and intelligently plan for tomorrow. Successfully passing through the lower tier stages of your journey will create the building blocks required to achieve your goals.”

Concluding thoughts

Jia Jen Low (@JiaJen13) asserts, “Supply chains have become crucial focal points for technological innovation.”[7] She continues, “Supply chain technology continues to evolve, and IBM predicts the next stage in this development will see the emergence of the ‘cognitive supply chain’. Powered by advanced AI, cognitive computing and cloud technology, the supply chain will not only be majorly automated, it will become self-learning, able to predict and act on a wealth of proliferating data sources, from market trends, scarcity, demand, competitor behavior, and more.” As President/CEO of a cognitive computing company, you’ll not be surprised to learn I agree with IBM that we’ll eventually see a cognitive supply chain. Given the right data, solutions like the Enterra Supply Chain Intelligence System™, powered by the Enterra Cognitive Core™, can help generate the kind of actionable insights decision-makers need to enter this bold, new enterprise space.

Footnotes
[1] Lora Cecere, “Sage advice? Only for turkeys.” eft, 1 February 2013.
[2] Brian Solis, “Rise of the Cognitive Enterprise in a Post-Digital Transformation World,” eWeek, 17 January 2020.
[3] Robert J. Bowman, “What Is the ‘Intelligent Supply Chain’?SupplyChainBrain, 16 December 2019.
[4] Ibid.
[5] “Bringing the Intelligent Supply Chain to Life Through Digital Transformation,” Supply Chain Dive.
[6] Staff, “Building Blocks for the Ultimate Digital Supply Chain,” Gravity, 2019.
[7] Jia Jen Low, “IBM predicts the rise of cognitive supply chains,” TechHQ, 17 January 2020.