As we approach the midpoint of 2024, supply chains continue to grapple with significant pressures. These include high geopolitical, trade, and regulatory uncertainties, a push towards AI-based technology, and increasing climate disruption risks affecting agriculture, the electric grid, and consumer behavior. Gartner’s supply chain analyst, Stan Aronow, suggests that these shifting disruptors necessitate a deeper change than “tactical resilience,” requiring a transformation of enterprise operating models (EOMs) for greater adaptability.
The Need for Modular Business Models
Gartner’s research indicates that traditional operating model transformations often take too long to realize value, with a full redesign taking three to five years. This delay could render the model obsolete before its implementation. Gartner’s solution? Build more modular, interchangeable, and adaptive business model elements instead of shifting from one rigid model to another.
Key Imperatives for Change
- Focus on smaller, discrete activities or business capabilities that exist independently of the workflows that sequence them. These could be physical process steps in a factory or warehouse or logical steps used in planning.
- Decouple data, activities, and decision rules from a workflow and implement them as discrete components. This approach allows them to be leveraged as part of an alternative workflow to meet different needs.
The Rise of the ‘Versatilists’
- Hire and develop ‘versatilists’ – individuals skilled in multiple areas with some depth of expertise in all of them, as opposed to specialists. Versatilists can fulfill multiple roles, expanding their scope of work beyond a single job.
- Move towards adaptive governance by pushing accountability for outcomes as close to the point of value creation or delivery as possible to expedite action.
In the current environment, Gartner asserts that having an agile and flexible operating model is as crucial as operational excellence. The concept of modular design is a critical ingredient in this mix, leading to better and faster responses to supply chain changes and disruptions.
