My previous blog post highlighted the complex real-world challenges that are leading companies to embrace automated execution. It also explored the significant benefits businesses can realize by digitally connecting their logistics operations to drive intelligent, autonomous decision-making, fueled by artificial intelligence (AI) and machine learning (ML).
That blog post was based on the ongoing digital transformation of worldwide logistics at Bayer Crop Science, enabled by Blue Yonder and Ernst & Young LLP (EY US). The results of that effort — including a 3-5% reduction in Bayer’s overall transportation spend — was the focus of two breakouts at ICON 2024.
The team involved in the transformation includes Johnny Ivanyi, Global Head of Distribution Excellence at Bayer Crop Science and Vivek Chhaochharia, Digital Supply Chain Leader at EY US. Along with Ben Ames, Senior Editor at DC Velocity, I joined these experts for a recent webinar called “A Guide to Mastering Automation in Transportation, Warehouse, and the Yard.” Available to watch on demand, the event was hosted by DC Velocity and CSCMP’s Supply Chain Xchange.
Based on the results achieved by Bayer and other Blue Yonder customers, there’s no doubt that the world’s logistics teams have much to gain from supply chain digitalization and automated execution. But how can they get started? I posed that question to our panel of experts.
Begin With a Clear Direction — and Stay Focused
Vivek Chhaochharia of EY US is quick to point out a surprising statistic about supply chain reinvention efforts. “When we look at digital transformations across industries, less than 30% of them succeed — and only 16% deliver lasting benefits over time,” he says. “That’s a pretty powerful number, but companies can do a lot to improve their chance of being in that 16%.”
“One of the key success factors is having a very, very defined case of change,” Chhaochharia continues. “Why are we going through this journey? Where are we going? What is at stake? It’s always going to be an uphill battle to empower people to drive change, to ensure that employees have ownership, to ensure that leadership and stakeholder engagement is very, very strong. That becomes a lot easier if you communicate why the change is needed. One common mistake we see is that companies focus much more on implementing a specific piece of technology than on driving a real transformation across people, processes, data, and technology. No one is implementing advanced technology for no reason. Define the new direction and share it.”
Johnny Ivanyi of Bayer agrees. “I just had a good benchmarking discussion yesterday with a company that’s starting the journey with Blue Yonder that we began 10 years ago,” he states. “The best advice I can give them is to be clear about the end goal. Of course you can change, but why? What are the new capabilities that you really need as a business? Because it’s different for every company.”
“It’s a long journey, a marathon,” Ivanyi adds. “But what is the end game? That’s what you need to stay focused on. You also need to celebrate incremental wins. If you improve delivery performance by 5% today, then 5% tomorrow, you’re eventually going to get to a 500% improvement. Take it step by step and believe that the big gains are going to come.”
Increase Your Chances for Success
Once you’ve started the journey, what are some key lessons you can apply from companies like Bayer? Our automated execution experts also had a lot to say on this topic.
“As Johnny said, it’s a long journey. But it’s really helpful to focus your attention on some key challenges with immediate returns,” Chhaochharia emphasizes. “When you build the roadmap, ensure that there’s a continuous trickle of value being delivered. Focus on realizing that value, and achieving the results you targeted in the beginning. Sometimes we see clients getting distracted by shiny objects. They see a new technology, and they think it will create value. But it ends up sidetracking the transformation and distracting the stakeholders.”
“I think you can also get distracted by big data volumes,” Ivanyi points out. “There’s so much data available, but which data is relevant? What information do you need to make the best decision? Collect and apply the data that’s related to your key improvement targets.”
“A closely related problem is having too many metrics and KPIs,” Ivanyi continues. “You can’t have 60 KPIs. That’s how you lose focus, and employees lose focus. At Bayer, we highlight a few critical metrics like greenhouse gas emissions, downtime, and delivery. You need to keep it simple because that’s what creates employee ownership and buy-in. You need to understand what’s needed from a business perspective, but you can’t overlook the fact that it’s also a cultural shift. Employee engagement and change management are a key part of the journey.”
“At the end of the day, it’s a people game,” agrees Chhaochharia. “We can introduce new technology as an enabler, but people need to use it, they need to adopt it. They need to share the vision. That’s why it’s very, very critical to look at these journeys from a holistic perspective across people, processes, data and technology.”
The results achieved by Bayer Crop Science through automated execution are impressive. To learn more and how you can start your own digital transformation journey visit blueyonder.com.
