May 17, 2020

The big questions for the future of supply chain

Supply Chain
Social Media
Supply Chain Management
Supply chain risk
Dale Benton
5 min
The big questions for the future of supply chain
There is one week left on the Future of Supply Chain survey from SCM World, which invites supply chain professionals to share their views on the issues...

There is one week left on the Future of Supply Chain survey from SCM World, which invites supply chain professionals to share their views on the issues which will shape the future of the industry.

Kevin O’Mara, Chief Content Officer, examines the big questions ahead of the report being published in November this year.

What technology disruptors deserve immediate attention?

In 2015, the big topics of Big Data Analytics (77 percent), Digital Supply Chain (71 percent), Internet of Things (64 percent) Cloud Computing (56 percent) Advanced Robotics (38 percent) and Machine learning (36 percent) represent the “disruptive and important technologies with respect to supply chain strategy.

But the biggest changes when compared to 2014 are 3D printing (31 percent), Drones/self-guided vehicles (17 percent) and Uberisation (16 percent) have entered the conversation surrounding disruptive technologies and supply chain strategy.

Where are the jobs going?

The survey collects data on countries’ prospects for supply chain investment, capacity additions, and of course – job creation.

The United States leads the way in job creation, with supply chain positions being added at twice the rate as they were being removed. Compare that with the UK, where more jobs were planned to be removed than they were to be created.  Mexico, Vietnam and India are the surprising supply chain job creators – with a near 10:1 ratio in adding new jobs.

Looking across the countries included in the survey, there are still a large number of countries planning reductions across supply chains.

What are the biggest risks facing supply chain leaders?

Risks can change every day, week, month and year. Supplier failure has been a big risk across supply chain, but more recently commodity price risks are more commonplace with an increase fear of geopolitical incidents.

Over the next three years’ the major supply chain risks include commodity price volatility (59 percent), Safety/quality issues (46 percent), legal/regulatory issues (46 percent) and a supply shortage of materials/components (40 percent).

 

What role does social media play in supply chain strategy going forwards?

Social media is here to stay. It is well and truly a part of our everyday lives. The Supply Chain survey has been looking at how social media impacts supply chain strategy results are showing that social media is becoming more and more an important factor. 

The survey asked supply chain leaders if they feel social media influences supply chains today, or is more of a future matter.

For sources of real time customer feedback, more people (56 percent) feel it is an impact for the future strategy planning as opposed to the strategy planning of today.

This is a common theme across the survey. 45 percent feel it will inform product enhancement/innovation proprieties, 46 percent think it will improve demand sensing and forecasting and 42 percent think it will offer an improved communication with trading partners – but importantly, in the future.

 

What skill mix defines a great supply chain professional in 2020?

In the previous surveys, soft skills like communication, influence and change management have been identified as essential skills for supply chain professionals. In the most recent survey of 2015, 90 percent of respondents agree and feel communication and influence is an essential skill as a supply chain professional.

Tied with communication and influence, 91 percent of professionals believe a foundational knowledge of core supply chain functions (plan, source, make deliver) is an “essential” skill. Business strategy (87 percent) and change management (84 percent) are still essential skills.

Technology enablement, while still considered an essential by (58 percent) there is still a large portion of respondents who don’t see it as essential, with (48 percent) considering it as “nice to have”.

That being said, analytics is well and truly “essential”, with 71 percent of respondents identifying it as a key part of a supply chain professional’s profile.

 

What are supply chain leaders doing about sustainability?

The supply chain survey has been analysing attitudes towards sustainability since 2011 and has seen a rise in waste reduction, turns towards renewable energy, water stewardship and green products.

The survey also looks at the reasons behind investment, is it because it’s the right thing to do and has financial payback? Is it because it’s purely the right thing regardless of payback?

Looking at the respondents, a large majority of company approaches to sustainable initiatives invest because it is the right thing to do and has financial payback. this includes waste reduction (65 percent) sustainable water management (43 percent) and renewable energy (41 percent).

While most of the respondents invest for both the financial return, they are investing because they feel it is the right thing to do. For example, 44 percent of respondents invest in greener products because it’s the right thing to do, regardless of the financial return. This applies for fair labour standards (49 percent), ethical sourcing (50 percent) and carbon offsets (37 percent).

 

Where are the next generation of leaders coming from?

The question for every business and every industry, who is going to be a key supplier of the future workforce? The top 10 universities for supply chain talent 2015 are:

  • Michigan University
  • Massachusettes Institute of Technology
  • Penn State University
  • Harvard Business School
  • Arizona State University
  • Cranfield School of Management
  • Stanford University
  • Georgia Institute of Technology
  • Cambridge University - INSEAD
  • University of Tennessee

 

Have your say in the Future of Supply Chain

 

Supply Chain Digital's November issue is now live. 

Follow @SupplyChainD on Twitter.

Supply Chain Digital is also on Facebook.

 

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Jun 11, 2021

NTT DATA Services, Remodelling Supply Chains for Resilience

NTTDATA
supplychain
Supplychainriskmanagement
Procurement
6 min
Joey Dean, Managing Director of healthcare consulting at NTT DATA Services, shares remodelling strategies for more resilient supply chains

Joey Dean, the man with the coolest name ever and Managing Director in the healthcare consulting practice for NTT DATA and is focused on delivering workplace transformation and enabling the future workforce for healthcare providers. Dean also leads client innovation programs to enhance service delivery and business outcomes for clients.

The pandemic has shifted priorities and created opportunities to do things differently, and companies are now looking to build more resilient supply chains, none needed more urgently than those within the healthcare system. Dean shares with us how he feels they can get there.

A Multi-Vendor Sourcing Approach

“Healthcare systems cannot afford delays in the supply chain when there are lives at stake. Healthcare procurement teams are looking at multi-vendor sourcing strategies, stockpiling more inventory, and ways to use data and AI to have a predictive view into the future and drive greater efficiency.

“The priority should be to shore up procurement channels and re-evaluate inventory management norms, i.e. stockpiling for assurance. Health systems should take the opportunity to renegotiate with their current vendors and broaden the supplier channel. Through those efforts, work with suppliers that have greater geographic diversity and transparency around manufacturing data, process, and continuity plans,” says Dean.

But here ensues the never-ending battle of domestic vs global supply chains. As I see it, domestic sourcing limits the high-risk exposure related to offshore sourcing— Canada’s issue with importing the vaccine is a good example of that. So, of course, I had to ask, for lifesaving products, is building domestic capabilities an option that is being considered?

“Domestic supply chains are sparse or have a high dependence on overseas centres for parts and raw materials. There are measures being discussed from a legislative perspective to drive more domestic sourcing, and there will need to be a concerted effort by Western countries through a mix of investments and financial incentives,” Dean explains.

Wielding Big Tech for Better Outcomes

So, that’s a long way off. In the meantime, leveraging technology is another way to mitigate the risks that lie within global supply chains while decreasing costs and improving quality. Dean expands on the potential of blockchain and AI in the industry

“Blockchain is particularly interesting in creating more transparency and visibility across all supply chain activities. Organisations can create a decentralised record of all transactions to track assets from production to delivery or use by end-user. This increased supply chain transparency provides more visibility to both buyers and suppliers to resolve disputes and build more trusting relationships. Another benefit is that the validation of data is more efficient to prioritise time on the delivery of goods and services to reduce cost and improve quality. 

“Artificial Intelligence and Machine Learning (AI/ML) is another area where there’s incredible value in processing massive amounts of data to aggregate and normalise the data to produce proactive recommendations on actions to improve the speed and cost-efficiency of the supply chain.”

Evolving Procurement Models 

From asking more of suppliers to beefing up stocks, Dean believes procurement models should be remodelled to favour resilience, mitigate risk and ensure the needs of the customer are kept in view. 

“The bottom line is that healthcare systems are expecting more from their suppliers. While transactional approaches focused solely on price and transactions have been the norm, collaborative relationships, where the buyer and supplier establish mutual objectives and outcomes, drives a trusting and transparent relationship. Healthcare systems are also looking to multi-vendor strategies to mitigate risk, so it is imperative for suppliers to stand out and embrace evolving procurement models.

“Healthcare systems are looking at partners that can establish domestic centres for supplies to mitigate the risks of having ‘all of their eggs’ in overseas locations. Suppliers should look to perform a strategic evaluation review that includes a distribution network analysis and distribution footprint review to understand cost, service, flexibility, and risks. Included in that strategy should be a “voice of the customer” assessment to understand current pain points and needs of customers.”

“Healthcare supply chain leaders are re-evaluating the Just In Time (JIT) model with supplies delivered on a regular basis. The approach does not require an investment in infrastructure but leaves organisations open to risk of disruption. Having domestic centres and warehousing from suppliers gives healthcare systems the ability to have inventory on hand without having to invest in their own infrastructure. Also, in the spirit of transparency, having predictive views into inventory levels can help enable better decision making from both sides.”

But, again, I had to ask, what about the risks and associated costs that come with higher inventory levels, such as expired product if there isn’t fast enough turnover, tying up cash flow, warehousing and inventory management costs?

“In the current supply chain environment, it is advisable for buyers to carry an in-house inventory on a just-in-time basis, while suppliers take a just-in-case approach, preserving capacity for surges, retaining safety stock, and building rapid replenishment channels for restock. But the risk of expired product is very real. This could be curbed with better data intelligence and improved technology that could forecast surges and predictively automate future supply needs. In this way, ordering would be more data-driven and rationalised to align with anticipated surges. Further adoption of data and intelligence and will be crucial for modernised buying in the new normal.

The Challenges

These are tough tasks, so I asked Dean to speak to some of the challenges. Luckily, he’s a patient guy with a lot to say.

On managing stakeholders and ensuring alignment on priorities and objectives, Dean says, “In order for managing stakeholders to stay aligned on priorities, they’ll need more transparency and collaborative win-win business relationships in which both healthcare systems and medical device manufacturers are equally committed to each other’s success. On the healthcare side, they need to understand where parts and products are manufactured to perform more predictive data and analytics for forecasting and planning efforts. And the manufacturers should offer more data transparency which will result in better planning and forecasting to navigate the ebbs and flows and enable better decision-making by healthcare systems.

Due to the sensitive nature of the information being requested, the effort to increase visibility is typically met with a lot of reluctance and push back. Dean essentially puts the onus back on suppliers to get with the times. “Traditionally, the relationships between buyers and suppliers are transactional, based only on the transaction between the two parties: what is the supplier providing, at what cost, and for what length of time. The relationship begins and ends there. The tide is shifting, and buyers expect more from their suppliers, especially given what the pandemic exposed around the fragility of the supply chain. The suppliers that get ahead of this will not only reap the benefits of improved relationships, but they will be able to take action on insights derived from greater visibility to manage risks more effectively.”

He offers a final tip. “A first step in enabling a supply chain data exchange is to make sure partners and buyers are aware of the conditions throughout the supply chain based on real-time data to enable predictive views into delays and disruptions. With well understand data sets, both parties can respond more effectively and work together when disruptions occur.”

As for where supply chain is heading, Dean says, “Moving forward, we’ll continue to see a shift toward Robotic Process Automation (RPA), Artificial Intelligence (AI), and advanced analytics to optimise the supply chain. The pandemic, as it has done in many other industries, will accelerate the move to digital, with the benefits of improving efficiency, visibility, and error rate. AI can consume enormous amounts of data to drive real-time pattern detection and mitigate risk from global disruptive events.”

 

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