Supply Change episode 4—Apps: the secret sauce to digitization

May 23, 2019 Matt Vermeulen

Apps are the secret sauce for supply chain innovation. The ability to digitize transactions and activities is critical to the future of supply chain procurement.

As the Harvard Business Review said: “over the next five to 10 years, supply chains will change dramatically…Those who move quickly to digitize their supply chain will gain efficiencies, develop new business models and revenue streams, and create competitive advantages.”

The particular power of apps

B2B apps can have an incredible impact on the status quo. One app that we’re particularly fond of right now is called FRDM, an app that identifies slave and child labor in your supply chain. That’s the definition of a good business app: it solves existing problems. We have to make sure we’re designing and working with app partners that are solving real problems in the market.

Apps can also serve niche areas that drive activity at the center of the supply chain, element by element. So when procurement has criteria for things that matter, not just about price or quality of service, we can actually bid things out that are going to change the world.

Your digitization on-ramp

Companies can’t digitize their supply chain on their own terms overnight, they need a place to start.  Apps are a good first step towards digitization. Hundreds of apps offer different niche opportunities to digitize a particular process for a particular company. So instead of spending a year trying to figure out your digitization strategy, just get apps.

If you don’t like a particular app, you can pull it out and put another one in that does a better job. You can constantly, dynamically, build your app suite to allow your users to do their jobs faster, more accurately, and more completely.

Solving real problems

There are a million cool consumer apps out there, but the reality is we’ve got to make sure the ones we’re using in the B2B world address real challenges.

Consider food waste. Over a third of everything produced gets thrown away in the European market. We have enormous food shortage problems and we’re throwing away a third of the perfectly good food because we don’t have a way of bringing it to those in need. What if an app could create marketplaces that would help find, reprocess, resell, and transport that food?

Today, in the traditional procurement space, these things are all very high touch big implementation efforts, almost impossible to leave once you get in them, and you’re stuck with the same tool. But these types of app solutions are going to make it easier for a CPO to buy the products and services they need.

With an app ecosystem on a platform, you’re going to be able to interchange applications, build out new applications, add new marketplaces to deliver on solutions, and be dynamic, fast and digital.

Supply Chain Transparency

Supply chains have always struggled around visibility and transparency. Increasingly, the ability to deliver a transparency solution has become critical. Right now it requires too many tools for companies to invest in. This is one area where there’s been immense innovation over the last couple of years where we could really deliver value with apps.

Where will the apps space be in five years?

For one, you’re going to see supply chain organizations moving towards becoming “supply chain control towers,” where they’re managing data, not processes. The apps ecosystem and apps will help manage processes.

Secondly, from a people perspective, there will be fewer people working in traditional supply chains and more people working in the data space. Data available in the supply chain is going to be much more about monitoring processes and leveraging technology than it has been in the past.

Thirdly, apps will be doing all the transactional work going forward The chief procurement officer and the chief supply chain officer will be driving so much innovation and value that they’re going to have to have the skill sets to be able to work hand in hand with the CFO and the CEO on strategy.

Supply chains will individually become much more valuable, and those that have the skills to deliver on innovation won’t have to worry about the transactional work anymore.

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About the Author

Matt Vermeulen

Matt Vermeulen writes about B2B commerce for Tradeshift. Whether he's writing about Accounts Payable best practices or debunking AI myths, Matt enjoys making complex topics easy to understand and fun to read.

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