FOSC Keywords: Companies should use additional opportunities to manage uncertainty

Providing multiple options for how to best manage cargo can be the best way for supply chain stakeholders to use the many data streams that come their way, says Michael Schrag, a researcher at the Massachusetts Institute of Technology’s Sloan School of Management.

In a keynote address at the FreightWaves Future of Supply Chain summit Tuesday in northwestern Arkansas, Schrague, an employee of Sloan’s Digital Economy Initiative, outlined the reasons why electives should be a goal for supply chain companies.

Optionality means considering different outcomes as well as many ways to achieve those outcomes rather than just focusing on one solution.

“In my opinion, how can we create a better choice rather than a better response? Because how did everyone in this room go through, if there is no better answer, what are you doing? ” Said Schrag.

One of the reasons companies should consider using electives is that it allows them to thrive, even in difficult and uncertain times such as a pandemic.

To develop options, a company may ask questions such as who it can coordinate with to generate a mutually beneficial income, which two or three of the best options are related to the company’s limitations and who has access to the data needed to achieve the desired results.

“I am surprised and disappointed by this [this line of questioning] does not happen more often. And I will go so far as to say that during COVID, when I worked with organizations during COVID, we saw a split [among] companies, ”Schrag said. “Most companies tried to trample the water and just get out. We have seen other companies that have mostly given up …. And then there was the fact that 15 to 20% of companies became more active and tried to turn the mistake into the future. “

The company can also “double” the creation of a platform architecture that provides visibility, transparency and maneuverability, Schrague said.

“What is your roadmap for visibility? … Can you help your customers or your customers’ visibility roadmaps? Are you talking about what visibility means at the end of 2023, and not just for the next three to six months? ” Said Schrag.

He later added: “I really wonder to what extent the supply chain of the future will use visibility around digital counterparts, visibility around simulation, visibility around simulation to make risk-based decisions about better delivery, supply chain management and risk.”

Because companies consider electives and include data in different options, they need to make sure they create an “interaction architecture,” which means scanning and running API data analytics so that data is not stored and does not interfere with company collaboration. , he said.

Many companies claim that they are digitally transforming and transferring data to the cloud, but what is really happening is that “you take these incredibly dysfunctional, incredibly closed systems and digitize them,” Schrag said. “So you recreate all your pathology and dysfunction in the cloud. You are dysfunctional. You do the wrong things, but hey, you do the wrong things faster, better and cheaper. ”

Companies should also consider innovative ways to cultivate electives. For example, to help NBA basketball players improve their game, Daryl Mori, NBA leader and co-founder MIT Sloan Sports Analytics Conferencecollaborated with video game makers to create a video game in which basketball players could play with analytical ideas about themselves, according to Schrage.

“Nobody wants to be a bitch of some algorithm … [but] I think we’ll see more and more simulation gamification [in the supply chain]”- said Schrag.

For example, assessing the needs of the supply chain, people may ask: “What if all this sunflower oil in Ukraine will no longer be? What are we doing? How do we get down? Who do we build communities with? Which are the two best sunflower substitutes, or which product containing sunflower oil could be redefined or revised if we use X? ”

“Well, suddenly people in the supply chain are no longer people in the supply chain. They are collaborative designers for next-generation products that work on time. Services. Experiences. I think it’s huge. I think it’s huge. “

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