Inside Hapag-Lloyd’s bid for Supply Chain Visibility

No company has had it easy when it comes to navigating supply chain disruption in recent times.
Whereas risk management and resilience were once arguably taken for granted, they have been propelled into the spotlight thanks to a series of derailing global events.
As a leader in international container shipping, Hapag-Lloyd has, unsurprisingly, seen its operations impacted by everything from COVID-19 to geopolitical conflict.
Of course, the question for leadership figures has been how to anticipate and prepare for disruptions before they have a chance to wreak havoc.
Outlining the stark reality facing supply chain professionals, Ingmar Mester, Director Supplier Management and Sustainability at Hapag-Lloyd, says: “COVID really put the topic of risk management and supply chain resilience into the focus area of top management and, ever since, it hasn’t disappeared from the radar screen.
“Everybody's expected now to have a greater level of transparency in their supply chains to be able to mitigate those risks.”
Emphasising supply chain’s rise as a priority topic at boardroom level, Ingmar continues: “Things have drastically changed over the last five or six years. It's no longer a buyer’s market. If you deal with transport suppliers or suppliers in general it's increasingly a seller’s market.
“Nowadays, you have limited choice and we hear every day in the news that there are shortages of critical materials, whether in pharmaceuticals, medicine or elsewhere. But the better we become at managing risk, the less it will be a focus of top management. If you're doing a good job, they may let loose; if you’re not doing a good job, you’ll always be in C-level focus.”
The importance of visibility
It’s well documented that supply chain visibility and, by extension, supplier visibility, have naturally assumed heightened importance during this ongoing era of disruption.
With Hapag-Lloyd’s business activities taking place all over the world, Ingmar looks after a not-insignificant procurement team of more than 150 people, who each deal with several-hundred suppliers.
“It’s absolutely critical for us to know as much as possible about our suppliers,” he says. “In one of my previous roles, we would say you need to know more about your supplier than your supplier’s key account manager.”
However, when dealing with a vast pool of suppliers, Ingmar calls this “an impossible task” – unless procurement teams have the required technological tools at their disposal to gain transparency, collate useful information, create supplier profiles and provide crucial updates.
Fortunately, interest in supply chain risk management has grown largely in parallel with the remarkable rise of AI and its more advanced offshoots, not to mention big data.
Ingmar adds: “For Hapag-Lloyd, a global company with a supplier base that extends into nearly every country in the world and a limited group of procurement, you need to rely on tools that help you manage the supply chain, create transparency and eliminate the false positives.”
Working with Craft
In a bid to obtain enhanced supply chain visibility, Hapag-Lloyd is working closely with Craft, an intelligent supply chain resilience solution enabling organisations to make smarter supplier decisions and protect against disruptions.
Having undertaken a thorough analysis, the shipping giant is continuously monitoring risk and compliance around 1,800 of its major suppliers via the Craft platform.
“You have your tail-end suppliers, which are not considered critical to your business, but then there are those where any kind of interruption would have a detrimental effect on Hapag-Lloyd – they are all covered,” Ingmar explains.
On a relatively basic level, Craft collects data, facts and figures via the internet and third-party sources to which it is subscribed and makes them available to Hapag-Lloyd, saving category managers hours of precious time.
What’s more, real-time alerts help procurement teams to understand potential threats to the supply chain, allowing professionals to make more informed decisions.
“This is a real step change for us – to have a tool providing these data and alerts, whereas before some of my colleagues were basically blindfolded; others were keeping their fingers crossed that nothing would happen,” says Ingmar.
“But of course we’ve seen now, with the pandemic and ensuing consequences in the global chain, that a lot can happen. Those who learn about ‘things happening’ first are the ones who can react and make a big difference.”
Harnessing the power of data
Having data is one thing, but being able to wade through and leverage this data for good is “absolutely critical,” says Ingmar.
Hapag-Lloyd had struggled in the past to find user-friendly technology platforms where data was correct, up to date and eliminated duplicate entries. Instead, Craft offers the perfect blend of artificial and human intelligence.
Crucially, Ingmar continues, new starters at Hapag-Lloyd are able to understand the basics of the platform in a matter of minutes.
“Hapag-Lloyd is the perfect example of a company that has successfully broken down silos for improved supply chain resilience and compliance,” concludes Ilya Levtov, CEO at Craft. “By collaborating and using the Craft platform across departments, employees can access customised risk alerts and insights and take coordinated action faster.
“With real-time data across multiple risk domains and AI-powered insights, companies can make decisions faster, uncover potential disruptions and protect revenue before business is negatively impacted.”
To read the full article in the magazine, click HERE.
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