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How Digital Data Enables Strategic Fit

While Carhartt traces its roots back 133 years, the company is now implementing digital tools (cloud, analytics, artificial intelligence, etc.) to improve its overall supply chain operations.

To implement process improvements, data must be timely, accurate, and relevant. A common expression amongst operations leaders: for something to be “meaningful” it also needs to be “measurable.” Hence the requirement for real-time data analytics.

Carhartt continues to improve its operational capabilities—for example increasing factory automation—as a means to further enhance a differentiated business strategy of superior quality products. Even more impressive, Carhartt implemented many of these new tools during the height of the COVID-19 pandemic.

Carhartt is now using these tools specifically to improve operations as well as inventory management. In the November 2022 CIO article, Katrina Agusti shares that Carhartt is using digital tools to optimize inventory levels at its various distribution centers, heightened by the company’s ongoing strong growth rates across all three of its business lines—direct to consumer, direct to business, and wholesale.

With ongoing roll-out of these new tools, Carhartt’s overall supply chain is positioned for ongoing success by being able to make quicker data-based decisions in operations processes to better support customers’ changing needs and preferences, which accelerates Carhartt’s unique ability to achieve strategic fit (alignment) between its business strategy (mission) and supply chain functional strategy.

Video Spotlight:  

This post is based on the CIO article, Carhartt turns to data under new CIO, by Paula Rooney, November 25, 2022, and the YouTube video in the Spotlight. Image source: vanitjan/Shutterstock

Discussion Questions:

1.  How can high-quality (reliable, timely, etc.) digital data be valuable for Operations organizations?

Guidance: High-quality digital data enables more accurate decision-making, quicker resolution of issues, more responsiveness to customer needs (volume, specifications, etc.), potentially higher quality, and lower total cost.

2. How can strategic fit—that is, the degree of alignment between overall business strategy and supply chain functional strategy—be heightened (increased) by digital data?

Guidance: Given Carhartt competes using a differentiated business strategy (superior quality), Carhartt’s functional operations organization also needs to be differentiated in terms of capability, data, and communications. Investing in digital data may extend Carhartt’s competitive advantage over rival companies, enabling them to charge a price premium while creating higher value appropriation (i.e., improved financial performance).

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