“In the complex and rapidly evolving business landscape and volatile global market conditions, supply chains cannot thrive in isolation,” begins “Building Constellations of Value — Transforming Supply Chains to Drive Collaboration, Innovation, and Long-Term Value,” a recently published report by the Digital Supply Chain Institute (DSCI), an organization focused on the evolution of enterprise supply chains. “Companies are increasingly recognizing the need for collaborative networks — Constellations of Value (CoV) — that bring together diverse stakeholders across a supply chain to tackle shared challenges and unlock new growth opportunities.”
The CoV framework is based on inputs from DSCI members and other global supply chain leaders. “A key insight from this effort was that successful supply chains are no longer defined solely by their internal efficiencies; instead, they must be designed as collaborative networks that drive shared value, resilience, and innovation.”
I couldn’t agree more.
As I’ve previously written, I first became interested in global supply chains in the 1990s, when the explosive growth of the Internet was driving a new golden age of globalization. In his 2005 international best-seller The World is Flat, Thomas Friedman explained that the rise of global supply chains was one of the key forces that contributed to flattening the world, along with the Internet, open source software, and related technologies.
Over the next two decades, I gained insight into the rising complexity of global supply chains. As a technologist, I was hopeful, — naively so in retrospect — that our increasingly powerful technologies, the Internet and blockchain in particular, would help us better manage this complexity.
In 2016, the World Economic Forum included blockchain in its annual list of Top Emerging Technologies. At the time, I was convinced that global supply chains would emerge as the killer app for enterprise blockchain technologies, — i.e., an application that’s so useful that it drives the success of a technology, product, or platform. Blockchain, I thought, would enable the institutions participating in a global supply chain to share information and communicate safely and efficiently while lowering transaction costs.
But, as it turned out, blockchain was no killer-app. This was highlighted in a December 2022 Wall Street Journal article, “Blockchain Fails to Gain Traction in the Enterprise.” The article noted that “Blockchain, the technology underpinning bitcoin and other cryptocurrencies, for years has been viewed by some companies as a way to drive industry-transforming projects, among them the tracking of assets through complex supply chains. So far that hasn’t happened.”
The DSCI Constellation of Value recognizes that technology-based solutions like blockchains, no matter how advanced, cannot solve complex supply chain problems on their own. As the report explains: “Modern supply chains are plagued by inefficiencies, lack of integration, and an inability to respond swiftly to changing customer and market demands,” and notes that “companies must reimagine their supply chains to be more interconnected, collaborative, and responsive to customer needs.”
The CoV report provides a playbook for creating collaborative ecosystems where all members work toward common goals. It argues that CoV-based networks should enhance supply chain stability and resilience and should be more adaptable than any one company could achieve alone. At its core, the CoV aims to align suppliers, logistics providers, technology partners, and even customers around a common purpose based on seven key steps:
- Identify the problem to solve and determine the relevance of a CoV;
- Define the Constellation of Value;
- Ensure internal alignment and support for CoV;
- Build the CoV framework;
- Jointly define and align the framework and governance;
- Launch the CoV; and
- Learn, adjust, and evolve the CoV.
Let me briefly discuss each of these seven steps
Step 1: Identify the problem to solve and determine the relevance of a CoV
Developing a CoV requires substantial effort and resources; it should only be pursued after exploring other less demanding solutions. When a CoV is deemed necessary due to the complexity of the supply chain under consideration, organizations should:
- Clearly articulate the specific and measurable problem or opportunity;
- Define the overall context and scope of the supply chain solution;
- Identify constraints and limitations that might affect the potential solutions; and
- Pinpoint the key stakeholders of the CoV-based solution.
Step 2: Clearly Define the CoV Structure
After determining that a Constellation of Value (CoV) is the right solution, the next step is to
clearly define how to organize the effort, including
- Set clear goals and metrics that support the broader business strategy;
- Define the scope of the work to maintain focus and avoid scope creep;
- Select the right mix of internal and external members; and
- Establish a compelling value proposition to ensure buy-in from all members.
Step 3: Ensure Internal Alignment and Support
A successful implementation of a CoV-based solution requires organizational commitment at all levels, as well as the allocation of resources, staffing, and governance. The following steps are necessary:
- Secure executive sponsorship with the authority to drive the initiative;
- Gain buy-in from key internal stakeholders across all departments;
- Allocate sufficient resources, including a well-planned budget;
- Build a skilled team aligned with the CoV’s objectives; and
- Define roles and responsibilities within the CoV governance structure.
Step 4: Building the Constellation of Value
Creating a CoV involves more than assembling a network of partners — it requires fostering collaboration and alignment:
- Select internal members to promote cross-functional collaboration;
- Choose external partners, such as suppliers and technology providers, that complement internal capabilities;
- Craft a compelling value proposition to secure long-term member commitment; and
- Develop an effective outreach and communication strategies to onboard members.
Step 5: Jointly define and align on a governing frameworkGlob
Before launching, it’s critical to align all members with a governing framework that balances structure and flexibility. Key factors influencing governance include:
- Size: CoVs with large membership require more formal governance structures and will be significantly more challenging to manage;
- Diversity: Greater diversity in geography, industry, or expertise increases coordination complexity; and
- Complexity: Pre-existing competitive issues or legal disputes among participans will make it harder to organize and manage the CoV.
Step 6: Launching the CoV
Launching a CoV requires making sure that all the members are ready and properly aligned, including:
- Confirming internal and external alignment on goals and KPIs;
- Establishing a clear plan with defined milestones and regular progress reviews;
- Ensuring that the necessary resources and infrastructures are in place; and
- Operationalizing the governance frameworks and clarifying roles and responsibilities.
Step 7 : Learn, adjust and evolve the CoV
Finally, a hallmark of a successful CoV is its adaptability. Continuous learning and improvement are essential to sustain value over time:
- Monitor progress against goals using key metrics and reviews;
- Gather member feedback to refine processes;
- Adapt to changing market conditions, regulatory landscapes, and technological advancements; and
- Identify emerging risks and opportunities.
Modern supply chains are no longer linear but multidimensional, encompassing customers, parts suppliers, logistics providers, technology vendors, and regulators. The DSCI’s Constellation of Value framework offers a comprehensive roadmap for optimizing these complex networks and fostering long-term resilience and innovation.
Comments