Supply chain is firmly on the executive agenda (at last!). But how can we keep our seat at the table? Procurious talks to Kearney partner Kate Hart about the burning issues in supply chain – from attracting new talent to co-creating with suppliers.
Supply chain is firmly on the executive agenda (at last!). But how can we keep our seat at the table?
Procurious Founder Tania Seary recently sat down with Kate Hart, Partner at consulting firm Kearney, to talk about the state of supply chain and what’s coming.
Change, pivot, attract
Supply chain management is increasingly about dealing with disruption, says Kate.
“Recent events have highlighted how susceptible our global supply chains are to disruption, from the pandemic to ransomware attacks to global trade wars,” Kate explains.
So how do we cope? It all comes down to two critical capabilities.
The first is the ability to sense the changing environment and pivot. And the second is the ability to attract and retain core talent.
That need hasn’t changed for a decade, says Kate. So why is it worth mentioning now?
“What it means today is very different to what it meant 10 years ago in regards to the importance of being able to sense a change environment and pivot,” Kate says.
That’s because the demands on supply chain professionals have changed dramatically – and certain industries adapt quicker than others.
“Some global geographies are a lot more mature than others so far as their uptake of e-commerce and some geographies have really been lagging,” Kate says.
Why technology means survival
If retailers were hesitant to adopt new technology, they have an extra incentive now. It’s their key to survival.
“Amazon has been a trigger for some of those geographies to uptake, but obviously the pandemic has just increased the proliferation of retailers offering e-commerce platforms,” says Kate.
Companies are also becoming more innovative in the way they handle the actual distribution of their supply chains, particularly in the business-to-consumer route.
“We’ve seen a proliferation of sort of rideshare ‘uberisation’ of that last mile,” Kate says.
“What we’re seeing is those companies that invested in the technology and got ahead of the game really have thrived during this. Now it’s going to be a matter of, you know, catch up or who survives, so it’s going to be quite interesting.”
Understanding the risk
So what are smart companies doing now to avoid future disruption? Supply chain network mapping.
Kate has seen a huge influx of companies not just looking at supplier risk, but looking at suppliers’ suppliers risk and building that information through their supply chains.
Interestingly, this is largely driven by senior executive interest. Never before has supply chain resilience enjoyed such a prominent position on the c-suite agenda.
“It’s beyond just enterprise risk. There is reputational risk, there is financial risk, there are lots of different risks that are inherent in the supply chain and that is very much front and centre in many of our board conversations at the moment,” Kate says.
“The key question that we’re getting asked by boards is how they get visibility in their end-to-end supply chain risk and how they manage that resilience.”
Making it automatic
Companies are also investing more heavily in automation to improve resilience.
‘It’s been quite extraordinary. Some global areas, particularly in the US and in the UK, are seeing a lot of advantage from automation,” Kate says.
“But the investment in automation needs to be deliberate, with a very sound business case, otherwise organisations are investing but not necessarily seeing returns in some areas.”
Technology, like automation, is providing supply chain teams with new levels of influence, Kate says.
“We’re seeing supply chain organisations use digital tools to create a triage process with a front door to supply chain – a self-service functionality,” Kate explains.
“[It] enables their internal talent team to then work with their business stakeholders to drive extraordinary value.
“So, supply chain is really being impacted positively by digitisation and automation. It’s all part of a focus on resilience which elevates the conversations and, in turn, the value that supply chain can deliver.”
Working as partners
That’s why Kate says the future will be all about human decisions facilitated by technology.
“What does that mean for partnerships across your supply chain?” Kate asks. “It means that the problems that need to be solved are increasingly complex. It requires a very strategic view of your supplier base.”
The strategic view increasingly means changing the relationship to a close partnership.
“In some of the scenarios that we’re working on at the moment, the clients don’t know what the solution is and actually need to engage the suppliers to co-create solutions for problems that are new to both of them,” Kate says.
That means seeing suppliers as extensions of your own organisation, which is positive.
But as Kate points out, companies still need to maintain “control and visibility so you are not anchored to them in perpetuity. So getting that balance of control versus collaboration right is going to be really, really important.”
The right people
As Kate puts it, the bright future of procurement isn’t possible without the right people.
“All of that is very contingent on the ability to attract, retain, and grow talent – the conundrum of supply chain management for aeons,” Kate says.
“But never is it more important than now. For supply chain management to have a seat at the table it needs to be attracting the core talent that we’re seeing coming out of the universities.
“There needs to be a very strong talent pool that’s feeding into the industry.”
Kate Hart – Partner at consulting firm Kearney, overseeing the supply chain practise within Asia Pacific – can be heard in the webcast series The Future Of Supply Chain Now.
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