Composable Enterprise: the next revolution in Supply Chain?

The ability to remain agile and deploy new products at a competitive pace, is nowadays crucial for any company; agile methodologies and fusion teams seem the way to go to organize work to be done speedily and effectively.

A fusion team is “a multidisciplinary team that blends technology or analytics and business domain expertise and shares accountability for business and technology outcomes”. Fusion teams are typically organized by cross-cutting business capabilities or business outcomes they need to support. [Gartner]

Multidisciplinary teams cut deployment times (by removing interdepartmental checking processes and middle management), and they allow the rapid implementation of new business capabilities, because they do not need to rework applications in a monolithic approach.

Furthermore a modular, microservices-architecture allows for large and small changes to be done quickly across a common architecture: exposed API offered by PBCs are utilized by fusion teams to combine components quickly, to solve any unpredicted business issue or emergency effectively.

In a market space filled with countless products and alternatives, businesses must put customers at the center to remain competitive: it's the customer experience, where convenience, personalization and flexibility are key, that truly gives value to the final customer.

However traditional “one size fits all” business models fail to support these customer expectations. Businesses must shift to a platform-enabled, customer-centric model, where they don’t adapt to changing customer demand, but they decide the level of service that sets the standard for their competitors.

Composable enterprises enables what KPMG calls the “micro supply chain model”: operations are segmented in different business streams, optimized to serve a specific market segment or customer, without impacting how the organization serves other segments [KPMG].

The focus shifts from a Project-Centric Approach to a Continuous Product-Centric Delivery [Gartner]; the goal is to build a product that enables customization, without changing it all the time and for the single customer, by assembling already available PBCs to adapt to the customers peculiar business scenario and project requirements.

This way an organization can better tackle complexity and costs, react faster to changes and ultimately differentiate themselves in the market by offering an optimized customer experience.

The agility and customer experience required by the market require new capabilities and tools. Agile operations make extensive use of smart automation and advanced technologies such as robots, AGVs, drones (and many more) in both production and logistics settings.

The drive for agility also requires companies to reassess and adapt to demand fast; this is possible by leveraging analytics and visibility tools, to quickly identify pain points and opportunities across the end-to-end supply chain.

Integrating new tools and capabilities in a company ecosystem can be challenging: different systems and technologies often come together in a mishmash of applications. However microservices and APIs make it easier to integrate technologies as well as orchestrate processes in the company ecosystem, as well as to implement customizations for business needs as the changes can be modularized, well-tested and well-maintained.

Better integration open the field to third parties, make deployments more manageable and reduce risk; most importantly, they unlock the possibility of innovation, where different functionalities, technologies and enablers come together in new cutting-edge solutions, improved interfaces, and a seamless experience of integration to customers.

Traditionally IT expenses have fallen under the umbrella of capital expenses (or CapEx); those costs are usually paid in bulk by companies to acquire, and own its physical assets and software. With the advent of cloud computing and the ‘as a Service’ model, many organizations have shifted to the OpEx model, where expenses are recurrent costs, usually paid through a subscription model.

In the capability economy model, payments are componentized, meaning that companies pay for smaller components, enabling them to pay for what they really use and need. While CapEX and OpEX models can result in losses and hidden costs, due to upfront expensive and sometimes badly planned investments, a real “pay as you go” model, maximizes profitability and scalability and enable flexibility in expenses.