The Value Network, Optimization & Intelligent Visibility

The supply chain is more properly designated a value network through which many supply chains can be traced.  Material, money and data pulse among links in the value network, following the path of least resistance, accelerated by digital technologies, including additive manufacturing, more secure IoT infrastructure, RPA, and, potentially, blockchain. 

If each node in the value network makes decisions in isolation, the total value in one or more supply chain paths becomes less than it could be.  

In the best of all possible worlds, each node would eliminate activities that do not add value to its own transformation process such that it can reap the highest possible margin, subject to maximizing and maintaining the total value proposition for a value network or at least a supply chain within a value network.  This is the best way to ensure long-term profitability, assuming a minimum level of parity in bargaining position among trading partners and in advantage among competitors.

Delivering insights to managers that allow them to react in relevant-time without compromising the value of the network (or a relevant portion of a network, since value networks interconnect to form an extended value web) remains a challenge.

The good news is that many analytical techniques and the mechanisms for delivering them in timely, distributed ways are becoming ubiquitous.  For example, optimization techniques and scenarios can provide insights into profitable ranges for decisions, marginal benefits of incremental resources, and robustness of plans, given uncertain inputs.

When these techniques are combined with intelligent visibility that allows you detect and diagnose anomalies in your supply chain, then everyone can make coordinated decisions as they execute.  

I will leave you with these words of irony from Dale Carnegie, “You make more friends by becoming interested in other people than by trying to interest other people in yourself.”

Thanks again for stopping by and have a wonderful weekend!