Bimodal Supply Chains – What Have I Missed?

I share what I learned from last week’s Gartner Supply Chain Conference.

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I attended the Gartner Supply Chain Conference in London last week and all the talk was about the importance of having a bimodal supply chain strategy. Now I hadn’t really come across this concept before and to be honest I wasn’t sure precisely what it meant or involved and my initial thoughts were was this just a new way of spinning old messages and concepts?

The theme was consistent throughout the event and I did some quick research where I discovered that the concept is fairly established and mature and has been applied across many business, functional and process areas. It draws a distinction between core operational management of routine processes and controls with those which are less structured, more rapid and typically focused on innovation. The former is described as Level 1 and the latter Level 2.

Over time successful Level 2 initiatives get inculcated into the business and become Level 1 activities as they are mainstreamed. The theory goes that the different skills, investments and mindsets that business and individuals need to operate effectively in these Levels means that by separating them you drive greater efficiency and success. It makes great sense.

Incubating business ideas through startups which are separate to the main business operation is nothing new and there are countless examples of companies doing this. The supply chain analogy was interesting and also made great sense to me. Gartner’s message is that to succeed in business now and in the future, you need to think about two distinct supply chain paths.

Mode 1 as analog and designed for stability, efficiency, and operational excellence. Mode 2 is digital and designed for agility and innovation—an approach supported by advanced analytics, automation, and connectivity.

The prize for being able to follow both paths is the panacea of being "industrialized and innovative, lean and effective but agile," according to Gartner Chief of Research David A. Willis in his keynote at the US Gartner Supply Chain Conference earlier this year.

The digital and analog sides of supply chain operations are not in competition – they are fundamentally complementary and have to work together.

According to Willis the "bimodal supply chain" concept is catching on and it does make sense to me that companies need to develop strategies that encourage supply chain organizations to prepare for the data-driven business of the future while reinforcing the value of mainstream operational excellence.

In the conversations that I had with attendees and Gartner analysts there was a great deal of discussion about how to deliver this and what are the primary challenges and opportunities – not surprisingly data was called out as being the critical enabler of both Modes and the need to be able to identify, capture, analyze and share data and insights was called out time and again as being one of the major challenges. This is compounded by the continued and relentless growth in data volumes and complexity which will certainly compound our existing challenges as supply chain leaders.

Many presenters spoke about how the role of the supply chain is becoming increasingly strategic in their organizations with Neil Humphrey, former chairman of Unilever Supply Chain Company (USSCC) spoke about in his keynote on the second day of the London event.

Humphrey described how the Unilever board decided to put its supply chain at “the heart of Unilever” as it sought to regain market share and previous levels of profitability.

“Our boss said we needed to radically change the entire system – supply chain wasn’t understood by the wider organization, by sales and operations, by marketing teams – and was seen as a black box.

“And we had never really communicated or explained the importance of supply chain to the business, despite the fact that we had a really strong team that had hit every target for the five years since USCC was established,” he said.

The overarching goal was to change the team from being supply chain leaders to business professionals.

A while ago I wrote a blog with the highly ambitious claim that the supply chain was sexy – as I listened to Humphrey’s presentation I realized how right I had been!

Photo credit: Marcin Wichary via Foter.com CC BY

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