Let’s be clear, the challenges during the COVID-19 pandemic didn’t reveal the interdependent or global nature of supply chains; rather, they highlighted that most organisations aren’t set up to manage this interconnectivity when extreme adverse impacts occur. In some cases, this has caused companies to take a hard look at their processes and their business models. In others, it has opened new opportunities for innovation, growth and competitive advantage. Overall, it has demonstrated the power of interconnected, digital supply networks to enable organisations to anticipate, sense and respond to unexpected changes.
But beyond the immediate economic and operational challenges created by COVID-19, what might supply networks in the post-pandemic world look like? Here, one could argue that despite the profound shifts we’ve experienced over the past year, the future of supply chains doesn’t look all that different from how we previously imagined it – we just have to get there much faster.
Of course this is easier said than done. One thing is to recognise shifts in your customers, your business operations and technologies, ecosystems and workforce.
You also need to assess your organisation’s ability to cope with these shifts – and you need to position the organisation to thrive.
It’s a process that doesn’t just include finding the right answers, but also asking the right questions. Here are 20 of those questions that I’ve debated a lot over the last months. I’m sure they’re part of your conversations, too.
Meeting evolving customer values and requirements
1. How diversified are our sales channels and are we prepared to market to and fulfil orders from a fully digital customer base?
2. Are we able to track online customer engagement metrics and leverage that data to inform planning and forecasting?
3. Is there a measurement for the impact and importance of each product or service relative to its current and future profitability and growth potential?
4. How does the product mix impact the complexity and cost drivers of our supply chain, such as production scheduling, overall equipment effectiveness and storage and package configurations?
5. Are there tangible measures for the real (or perceived) environmental or societal impact, both pre- and postproduction, of our company’s products?
6. Does our organisation segment its customers based on profitability percentage, total margin contribution, strategic importance, growth potential or some other measure?
7. Do our employees regularly engage with the highest-value customers to understand the potential for additional services or enhancements, to inform pricing strategies across customer tiers?
Building trusted, connected supply networks
8. Are our logistics operations optimised (including shipment scheduling, mode-switching, route optimisation, tracking and tracing, inventory rebalancing and network footprint changes) – not just on a cost basis but also considering cost/resilience trade-offs?
9. Is our network over-reliant on specific regions – particularly those that may be prone to supply chain disruptions?
10. What do we know about the supplier bases of our suppliers? Are our systems connected to those of our suppliers and customers (i.e., would a disruption at a first- or second-tier supplier trigger an alert to our planning systems)?
11. Are we able to automatically and dynamically reallocate volumes across our suppliers based on anticipated delivery risk, quality, timeliness and cost metrics? Do we understand the profitability impact of doing so?
12. Are we able to proactively monitor and assess the health and resilience of our suppliers and incorporate those results into contracting decisions?
13. Can we adequately assess cost-to-serve/profitability vs. risk/resiliency tolerance of given supplier network configurations?
14. Can our inventory management systems automatically rebalance inventories across the network?
Enabling the future of work in supply chain management and operations
15. Do we understand the capabilities we need and where the best places are to find those capabilities (e.g., through freelancers, alliance partners or technology solutions)?
16. Is our organisation focusing on the right work outcomes to drive our business forward and unleash productivity and new value?
17. Are we thinking of technology as a means of substitution or as an enabler to augment work and drive better collaboration?
18. How will we educate and develop the workforce to gain these capabilities, including working alongside new or enhanced systems and partners?
19. How should we be leading, rewarding or incentivising the workforce to drive the productivity gains our organisation needs to thrive?
20. And have we created a culture that promotes adaptability, enables teaming and teaches leaders how to lead their teams in both a physical and virtual environment?
There’s no doubt that many of the answers to these important questions will evolve alongside the technology curve: We are already in an age where humans and robots share the factory floor as well as the corporate office; where algorithms can predict demand patterns and determine scheduling sequence; where global value chains can be viewed from a centralised control tower using AI or machine learning to manage performance across networks, trigger alerts and initiate mitigating action; where the trade-off of cost vs. service can be weighted to consider multitiered risk and resiliency; and where supply chains can be fully synchronised and dynamically optimised from source supplier to end customer.
Of course these seeds for change were sown long before ‘social distancing’ and ‘Zooming’ became household terms. And while there is undoubtedly a steep road ahead for many, those supply chain organisations that can embrace the next normal of interconnectivity and full transparency will likely be best positioned to thrive.
As a part of the Strategy & Operations practice Tore has worked with analysis, development and implementation of operational strategies. Tore has deep experience with aligning business models to changing market demands through optimisation of business processes and aligning systems, organisation and governance accordingly. He has industry experience from manufacturing, transportation, consumer products and energy. His main focus is on on the operational core processes but he also covers administrative support processes. As a program manager Tore has been leading transformation projects for international clients heading multiple parallel projects and reporting directly to executive committee members. His responsibilities cover everything from initiating assessments, identifying opportunities for improvement to building business cases and following up by designing solutions and driving teams through implementation.