Tag Archives: supply chain management

Where Does Your Supply Chain Begin and End?

Supply chain professionals are no doubt an important link in any supply chain but it is but one link in the end-to-end process.

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Working in any supply chain management role can be all-consuming as well as challenging -but we can’t work in a vacuum. Supply chain professionals are no doubt an important link in any supply chain but it is but one link in the end-to-end process.

In the simplest type of supply chains, items and services are sourced from suppliers and converted into products and delivered to the customer or end-user.  During this process, both products and information move forward through the chain.   In the same way, products and related information move back up the chain.   

If only it were that easy. 

Any supply chain involves interactions between people, entities, information, and physical resources that combine, hopefully harmoniously, to sustain a company’s competitiveness.  It also has an objective to reduce overall costs and speed up the production and distribution cycle. As supply chain professionals know very well, if a supplier is unable to supply on time, and within the stipulated budget, business is bound to suffer losses and gain a negative reputation.

Q.  What is the main goal of an efficient supply chain?

A.  To get the customers what they want, when they want it, at least cost.  

If a company fails to focus fully on the consumer or end-user its ability to surviveis severely at risk. 

How to improve your supply chain

Sourcing is an early activity in the supply chain but demand planning comes first. By sharing projected requirements with your suppliers you can assist them to manage their own sourcing process and their inventory. Any forecasts that you supply them may not be cast in stone but they help to take the guesswork out of your order process.    Your Tier 2 suppliers, i.e. your supplier’s suppliers, are the ones that provide the items and services needed to fulfil your orders.  What products do they supply, what are their costs and what are their lead times?   

 The automotive industry is particularly good at this.  Modern vehicles are made up of more than 30 000 component parts.  Most leading vehicle manufacturers have a close grip on their Tier 2 suppliers: the parts suppliers for engines and equipment and computer software and hardware needed to make them run.

Technology in the supply chain 

The use, speed, and capabilities of technology are defining the trends in modern supply chains.  The cost of these technologies is starting to decrease making automation more affordable for mid-size companies. 

Demanding and techno-savvy customers are effectively re-shaping supply chains in the e-commerce world.  Customers expect to receive their order within a day or two whether it’s food, fashion or new bed linen.  They can choose not only what to buy, but who to buy it from and how to buy it.  E-commerce is creating new challenges throughout the supply chain from demand planning through procurement to warehousing, distribution and logistics.  Whether a customer is shopping in-store, on their laptop or mobile device, they expect their experience to remain the same, wherever they are in the world.  Retail companies that can adapt their supply chain operations to the new era of e-commerce will have the best chance of success.  

Global supply chains

Global supply chains are becoming very fragmented and dispersed and so require lots of resources and technologies to function well. Complex supply chains such as those in aerospace, hi-tech, chemicals and pharmaceuticals are becoming more difficult to design and manage.   According to Gartner, some of the most efficient global supply chains are in fast-moving-consumer-goods (FMCG) companies such as Unilever, Nestle, Nike and Inditex (Zara).  These companies have close relationships with their suppliers, even owning some of them, which is contributing to their successes. 

Johnson & Johnson is a confirmed leader in the healthcare industry due to its on-going focus on its supply chain capabilities such as end-to-end visibility.  The company prides itself on being a customer-centric organization.  It is an early adopter of new technologies such as 3D printing which it is using to enhance its manufacturing and distributions operations and unlock new opportunities.  Its global team has played a large part in streamlining the sourcing processes for both ingredients and packaging.    They realized that their supply chain was not as nimble and agile as it could be, and they weren’t leveraging their global scale in sourcing enough.

The professional association for supply chain management and the leading provider of research and education (APICS) provides a supply chain operations reference model (SCOR) on which you can assess your current abilities. It identifies steps in four measures:  process, performance, practices and people.    

The SCOR Model

APICS proposes that to improve your supply chain you need to:

  • Analyse your supply chain business processes and their dependencies with the SCOR framework in mind
  • Document and design your supply chain strategy, processes, and architectures to increase the speed of system implementations
  • Design internal business processes while taking organizational learning goals into consideration
  • Simulate the process to identify bottlenecks, gaps and process enhancements to improve supply chain performance

Underlying any successful supply chain is a strong organizational structure, up-to-date technology and strong leadership. An organisation’s supply chain is a significant source of competitive advantage and business leaders are embracing it as a strategic capability. 

If you’d like to read additional related content or get involved with thought provoking discussions check out the Supply Chain Pros group – a one stop shop for all your supply chain needs.

3 Success Factors In Building An Agile Supply Chain

Adaptability and agility in the supply chain are crucial in responding to fluctuations in demand and shorter product cycles.

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Today’s global marketplace is volatile and fast-moving.  Adaptability and agility in the supply chain are crucial in responding to fluctuations in demand and shorter product cycles. Agility within this unpredictable market requires that your supply chain is responsive and can deal with any sudden variations. According to most experts, there are three main success factors in effective and agile supply chains: your supplier relationships, your people, and the effective use of the supporting technology.

The FMCG sector

Organisations involved in the fast-moving consumer goods sector (FMCG) need to be able to adapt to unanticipated external shifts in customer demand.  Any company that has a constant stream of new, innovative products and services,   and is selling direct to the consumer (B2C) in the e-commerce world, needs to be doubly flexible.

Fast fashion poses real challenges. If you launch 10 000 new designs per year and you have more than 1 700 suppliers across 50 countries, you need to be both agile and quick.  Inditex, one of the largest fashion retailers in the world and the holding company of the Zara brand, does this successfully.

What contributes to its success is:

  • Market sensitivity.  Teams of retail and commercial specialists plan their products based on sales data collected on the fashion trends of target customers around the world.
  • Postponement of production.  Less than half their garments are sourced as finished products from low-cost producers. At least half are manufactured at short notice, mostly in Europe, depending on demand. 
  • Flexibility.  Manufacturing activities including labour intensive finishing operations are accomplished by a network of 300 specially trained subcontractors. 

Zara has gained accolades for its ability to swiftly implement decisions and deliver new clothes to stores faster than its competitors.  It has a supply chain that is not only agile and flexible but incorporates many lean characteristics into its processes, especially when overseeing the operations of its subcontractors.  In a lean approach, anything in the process that doesn’t add value for customers is eliminated.  Lean supply chain management is essentially about lowering the cost base and reducing waste as much as possible.   

The manufacturing sector  

In the manufacturing sector, being agile means that your supply chain must be responsive enough to deal with late deliveries and non-compliant suppliers.   The need to move raw materials, components and finished products across borders and over longer distances adds complexity.  This has resulted in longer planning time and increased levels of inventory.  Improving speed in logistics and minimising disruptions are important to gain competitive advantage and to reduce costs.  

Lean and agile supply chain solutions are often offered as an either-or option but many large global companies such as Unilever and Kimberly Clark are now embracing both approaches in their diverse operations. Having a hybrid supply chain strategy by using lean and agile approaches in combination is becoming commonplace.

Technology companies need to react quickly

 Communications and information technology company Nokiacommitted to achieving agility in its supply chain when it decided to move its manufacturing away from its home base in Finland. The company aims to refocus lower-value activities closer to component sources, thereby increasing supply chain responsiveness and streamlined logistics. “We are aligning our manufacturing strategy to increase competitiveness,” said Nokia spokesperson Mona Kokkonen. “We need to optimize our manufacturing operations so we can collaborate more closely with suppliers and be more responsive to customers’ needs.”

An I.T. systems company such as Cisco hasa highly diverse and extensive supply chain that spans the globe. Cisco has increased its agility, resilience and ability to scale by implementing new business models, a single ERP instance, standardization and automation throughout its supply chain.

The three success factors in building an agile supply chain

1.Focus on effective supplier contracts

If a key supplier fails it is necessary to have an alternative plan to avoid delivery crises and disappointing customers. In this situation, and especially if there is a sole-supply agreement, contingency plans must be put in place. Multiple supplier relationships for the same goods or services are sometimes necessary to reduce risk, but this comes at a cost. 

2. Build an agile team

The most effective people are those who are alert to external changes and market trends that may affect the business. They need to have a sense of urgency as well as being flexible. Exchanging information with suppliers, listening to customers and being aware of impending disruptions are all activities that, when acted upon, will set you ahead of the competition.  

3. Apply the right technology

Leaders in agile supply chains connect their supply chain partners on a shared technology platform, often cloud-based, so that they all have access to the same data in the same timeframe. Procter and Gamble (P&G) and Wal-Mart both speed up decision-making by analysing data on order status, inventory, shipments, documents, and payments.  The resulting information provides insights into future demand and facilitates forecasting.  

Supply chain agility delivers results when a company can quickly detect changes, opportunities and threats in the external environment AND act on this information speedily. This responsiveness depends on the ease of accessibility of usable real-time data and the electronic means by which to share it. 

Competition is fierce so organisations need to be alert and responsive to turbulent changes in the external environment.  As industrial and retail supply chains become more complex agility will become a real factor in a company’s survival. The use of appropriate technology will be a key success factor but only with the active involvement and support of both employees and suppliers.

If you’d like to read additional related content or get involved with thought provoking discussions check out the Supply Chain Pros group – a one stop shop for all your supply chain needs.

Making Supply Chain Your Organisation’s Competitive Advantage

In order to succeed, a business must be able to deliver more value to customers than its competitors. How do you make supply chain your organisation’s competitive advantage?

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In order to succeed, a business must be able to deliver more value to customers than its competitors. It is becoming more difficult to find, develop and sustain these opportunities in the rapidly evolving business landscape.  The free movement of people across borders, developments in technology and real-time communications add complexity to global supply chain management. World trade is highly competitive, constantly changing and volatile.

As a result, supply chains today need to become more strategic. They are multi-layered, integrated manufacturing and distribution systems that, to work efficiently, need to be optimised on a continuous basis.

Technology

Automation of manufacturing using robotics and self-driving equipment in factories is now commonplace.  Software solutions and telematics improve information sharing, processing, and analysis of data which is converted into usable information to inform policy and operational decisions. However, it’s important to ensure that technology investments are based upon business needs – and not just the newest tech available.

Areas of competitive advantage

Many global businesses now compete on the basis of their supply chain capabilities rather than only on their product lines.  Leaders with efficient supply chains such as Wal-Mart, Proctor and Gamble, Tata Motors, and Unilever focus on rationalizing each activity in their supply chains. They constantly monitor costs, demand patterns, lead limes and administrative processes to achieve competitive advantage while applying relevant technologies.  

Cost of goods sold (COGS)

Reducing the cost of goods sold can be achieved through a more focused approach to procurement including price negotiation and strategic sourcing.  Inventory, distribution and freight costs are specific target areas where the potential to save can be found.  Walmart runs a retail compliance program that defines when, how and where their supplier must deliver. This helps the company reduce its costs by adjusting its storage and distribution needs in line with customer demand. This means lower prices for the customer.    

Freight costs can be managed down by outsourcing delivery logistics where there are potential economies of scale.  Telematics is used extensively by third-party-logistics providers (3PLs) to provide visibility into the movement of goods, both in the warehouse and in transit, and ensure their safety.   

Shorter lead times

There are many delays experienced in supply chains.  Some of these are because of slow processing of orders due to cash flow challenges, batching of orders, organizing shipping and freight and slow communication processes.

One of the main methods by which a business can drive increased value is by decreasing these lead times. Both business- and consumer-facing companies are experiencing increased demand for faster shipments. Speedy deliveries can have a significant impact on sales. Amazon Prime customers will often pay more for guaranteed next day delivery.

Flexible demand management

Technology now provides us with forecasts of future customer demand using artificial intelligence tools. Predictive analytics are extremely useful in determining the optimum seasonal stockholdings and allows us to prepare suppliers for increases in demand. 

A flexible supply chain can quickly adjust to fluctuations in supply and demand keeping inventory down when interest is buying is low but being agile enough to respond to spikes in demand.

Documentation and administration

Streamlined and slick documentation and administrative processes in the supply chain are a great competitive advantage.  Reducing re-work and duplication, increasing visibility and smoothing communication channels are real advantages.  Supply contracts and service level agreements are often neglected areas that create hold-ups and expensive errors.  Some progressive organizations are using blockchain technology for maximum visibility and security.      

Insource or outsource?

The decision of whether to outsource manufacturing and/or services depends on in-house capabilities. Ideally, areas where competency or capacity are lacking are prime candidates for outsourcing.   Some larger organizations have the capital and resources to manufacture their own products, others will typically outsource their manufacturing to white-label providers.   Building internal warehousing, logistics and distribution facilities is a major undertaking and capital intensive. Successful outsourcing contracts in this category have robust service level agreements and detailed contingency plans. 

Supplier relationship management (SRM)

SRM is a huge topic and ranges from simple tasks such as paying suppliers on time to developing long-term collaborative partnerships with suppliers for mutual benefit and to promote innovation.  Leading companies in SRM such as Nestle, Toyota and Coca-Cola treat key suppliers like collaborators to get them integrated and prepared to take extra steps to ensure quality and speed.

Sustainability

A sustainable supply chain makes long term business sense.  Consumer awareness of environmental and social issues is growing around the world. IKEA is one of many companies that work with suppliers on a variety of challenges, from energy efficiency to sourcing materials responsibly.  Ignoring this trend may create reputational damage that takes years to restore.  

Conclusion

Effectively making use of rapidly advancing technology could be the key to leveraging your supply chain to get ahead of the competition. Difficulties in supply chain management occur due to evolving complexities and interdependencies. Companies that work on achieving continuous improvement through consistently and persistently working on strengthening linkages will drive competitive advantage.  

If you’d like to read additional related content or get involved with thought provoking discussions check out the Supply Chain Pros group – a one stop shop for all your supply chain needs.


Supplier Failure – Are You as Protected as You Think?

Supplier failure and collapse on a massive scale – it’ll never happen to you, right? How do you really think you’re doing to help protect your organisation from the fallout?

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London, July 2017. Despite an “encouraging start to the year”, the warnings are coming thick and fast on Carillion. By November 2017, the company has issued its third profit warning in five months and things are looking bleak. And in mid-January 2018, despite the deferral of two financial covenants, the company collapses into liquidation.

In the days that follow, the investigations and enquiries begin. How did a company so integral to so many high value and high profile UK Government projects get into such trouble? Where and how did billions of pounds worth of contracts become over £1.5 billion worth of debt?

And, perhaps most importantly of all, how did numerous civil servants, Government contract specialists and expert financial consultants not see it coming?

2018 – The Year of Demises

The demise of a construction giant will go on to leave an enormous hole for the UK Government to fill in order to continue providing key services across the country such as school meals and hospital and prison cleaning, and ensuring that the 19,500 employees delivering public services are able to be paid.

The final cost to the UK taxpayer is estimated to be more than £148 million, but the knock-on effects will be felt for some time to come. Late last year it was reported that there had been a 20 per cent rise in insolvencies in the construction industry as sub-contractors and small businesses struggled following Carillion’s collapse.

But 2018 wasn’t finished there. Fast-forward a little more than ten months and the unthinkable happened again. Twice. First, one of Carillion’s key competitors, Interserve, issued a warning on the state of its finances and increasing debt predictions to between £625 million and £675 million in 2018.

Then just before Christmas, Healthcare Environmental Services (HES), a key provider in the disposal of medical and clinical waste, closed its doors with the loss of nearly 200 jobs and leaving the NHS and Local Authorities scrambling to ensure that services could be delivered by another organisation.

Where did it go wrong?

If your procurement department was anything like mine, then all three situations dominated conversations for weeks after these public announcements. Beyond the usual, “well, I’m glad that wasn’t us”, and the frantic checking to understand exposure, questions were starting to be asked.

Give a procurement professional long enough and they’ll be able to pick through the wreckage of a broken contract and understand roughly where things went wrong. And frequently, lines are drawn back to the contract or contracts put in place and the overall management of this.

But in these cases, and particularly in the case of Carillion, there was a general disbelief that something like this could have been allowed to happen. After all, how was the overall performance of the supplier missed? And just why, even though it was clear that there were serious financial difficulties, was Carillion awarded more contracts to help bolster its financial position?

Like me, maybe you thought, “I’d like to have seen the procurement process for that one.” Or maybe you wouldn’t…

And probably just as likely, even though you tell yourself that it would never happen on one of your contracts, you go back to check. You know, just to be 100 per cent sure that all your checks and balances are in place.

Checks and Balances

What has subsequently been reported is that Carillion, in conjunction with its appointed internal auditor Deloitte, had been, “”unable or unwilling” to identify failings in financial controls, or “too readily ignored them””. This is where there may be some explanation or sympathy for the procurement process.

In the public sector, as in the private sector, procurement will work in tandem with other departments in its organisation to ensure the robustness of the contract and the suitability of the supplier. As part of public tendering exercises, there are a two stages in which this can happen for Economic and Financial standing assessment.

The first comes as part of the European Single Procurement Document (ESPD). Buyers will outline the minimum financial requirements for the contract, usually linked to contract value, complexity, volume and length, as part of their Contract Notice and ESPD. This can be, for example, a positive outcome for pre-tax profits for the previous 3 years, and/or certain outcomes linked to financial accounting ratios.

Suppliers will confirm that they comply with this and at this stage may provide evidence for this. This is backed up by the second stage for financial checks, the Request for Documentation (RfD). The RfD allows for this evidence to be requested by procurement of successful suppliers as a final check before contract award. These checks then provide the comfort that the supplier has a firm financial footing to undertake the contract.

The key issue here, and in the case of Carillion, is that the assessments are only as good as the information that is filed and provided.

Procurement’s Role and Remit

As with many of the challenges in the public sector, we’re left asking the question of what is procurement’s role and remit in this situation. There needs to be an understanding that procurement can only do so much. However, what they do have the responsibility to do needs to be done correctly.

In the Carillion example, procurement may asked all the right questions, but if the evidence provided isn’t accurate, it still wouldn’t have made any difference. Procurement can put in the ground work up front, before they even get to the stage of requesting responses to ESPDs and the like.

When looking at your next contracts, make sure that you have the following:

  • An accurate specification – this will fully outline the scope of requirements and the supplier’s responsibilities;
  • Estimated project volumes – based on historical usage data where applicable, otherwise linked to the specification requirements;
  • Market analysis – who are the suppliers that are likely to bid for this work? What is the overall market spend like with the top suppliers?; and
  • Understanding of current contracts – which suppliers have won the most business from you recently? Is anyone looking like they may have capacity issues?

Working with key stakeholders across the organisation is critical. Not only will this improve the accuracy of the data that is issued with the contract, but it will also mean that there’s an overall understanding of who is actually best placed to cope with the new package of work. Particularly if one supplier seems like they are overstretching themselves.

Then it’s back to a footing of openness and honesty with suppliers so that any potential issues with financial performance are flagged up well ahead of time. Build that relationship with your suppliers and you may help to head off a situation where it’s your contract on the front page of the newspaper next time.

I’d love to hear your thoughts on this article and the series of articles on the challenges facing public sector procurement in 2019. Leave your comments below, or get in touch directly, I’m always happy to chat!

Transparency In Supply Chains And Blockchain: What Is The Most Common Trap?

Becoming aware of blockchain’s weak spots is an important first step towards taking full advantage of what the technology really has to offer.


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Is Blockchain coming of age in 2019?

Judging by the first half of 2019, it seems that the blockchain hype is finally deflating and there is an overall consensus that it will not save the world (at least not this year…). The growing trend towards pragmatism, which is now beginning to temper people’s expectations, is the best thing that could happen to blockchain. . .  A more down-to-earth approach is welcome because, like any technology, blockchain is not perfect, nor the solution to all problems. It is important to be realistic about its potential and limitations.

In particular, blockchain has limitations that threaten to jeopardise many recent high-profile initiatives to increase traceability and visibility in the supply chain. Despite seeming like the ideal technology to address growing concerns about these aspects, most (if not all) blockchain implementations have an Achilles’ heel: the initial digitisation of data to bridge between the physical and the digital world.

Becoming aware of these weak spots is an important first step towards taking full advantage of what blockchain really has to offer. Blockchain’s real value proposition

There are many potential and valuable use cases for blockchain, especially in Procurement and Supply Chain Mgmt.  

“If you talk to supply chain experts, their three primary areas of pain are visibility, process optimisation, and demand management. Blockchain provides a system of trusted records that addresses all three.” Brigid McDermott, vice president, Blockchain Business Development & Ecosystem, at IBM (source Blockchain and Supply Chain Finance: the missing link!, Finextra)

The most valuable characteristic of blockchain is that it serves as a backbone for “convergence”:

  • For better insights and actionable intelligence: Blockchain is the missing link in Big Data initiatives and the convergence of the Internet of Things (IoT), Artificial Intelligence (AI), and blockchain represents a breakthrough.
  • From an integration perspective: Blockchain-based supply chains allow three different supply chains (physical/informational/financial) to converge into a single digital one.

Blockchain has the potential to converge the two main ecosystems involved in trade finance — the financial ecosystem, which includes banks and suppliers, and the supply chain ecosystem. At the same time, the technology can provide a unified platform for multiple stakeholders, potentially avoiding difficulties that slow down operations” Béatrice Collot, Head of Global Trade and Receivable Finance at HSBC quoted in Blockchain’s Main Strengths Are Transparency and Instantaneity on Cointelegraph

While these features will certainly contribute to improved supply chain transparency, there is still a critical challenge that needs to be addressed: the digitisation of data at the beginning of the process. This crucial step constitutes a fundamental weakness of many current digital supply chains.

Blockchain’s Achilles’ Heel: Mind the Gap!

Traceability and transparency along the supply chain, from raw materials to final products, is a growing concern for organisations. New regulations from governments & institutions, customer expectations, and company’s self-interest in issues like sustainability, incident management, and efficiency, have created the need for an infrastructure to track, trace, and store data in the supply chain.

At first glance, blockchain may seems like the ideal solution. It creates a permanent record of all transactions at all levels of the supply chain, guaranteeing full traceability and establishing trust. So, many companies started to provide blockchain-based means of collecting information in their supply chain with the goal of making it accessible to customers as irrefutable proof about the origin of products and components.

A typical story goes like this: “Thanks to our application, you can take a picture of the QR-code on your product and view the entire supply chain of all components/elements that contributed to the final product you have in your hands.”  

This sounds great in theory, but there is an important caveat:

 “At the interface between the offline world and its digital representation, the usefulness of the technology still critically depends on trusted intermediaries to effectively bridge the “last mile” between a digital record and a physical individual, business, device, or event. […] And if humans […] manipulate the data when it is entered, in a system where records are believed ex-post as having integrity, this can have serious negative consequences.” What Blockchain Can’t Do, Harvard Business Review

The use of blockchain technology gives people a false sense of security because it relies on cryptography and various mechanisms to ensure that information stored on it can be trusted (identity, immutable record, etc.). But, as illustrated above, the digitization step when the information is recorded (a block added) is not protected by this same “guarantee.”. So, it is not because blockchain technology supports and enables a better transparency that it should be blindly trusted by customers or by procurement or supply chain pros.

The solution?

It is undeniable that blockchain is a form of digital trust. Much of the hype surrounding it has been driven by a broader trend in society: the erosion of trust in people and institutions. Blockchain is playing a major role in shifting that trust to technology and software. This explains, in part, why compliance and transparency are the use cases that are priorities for procurement and supply chain pros.

However, it is important to remember that blockchain’s reputation as “trustworthy” can be misleading, especially in the case of supply chain transparency. Manual operations are still part of the initial process of digitizing the data. Therefore, trusting data stored in the blockchain also means trusting that initial step that relies on human activities.

For this reason, building trust in business partners will continue to be a vital part of the procurement function’s role in the future. Introducing digital initiatives will not entirely remove the human element of the job, and Procurement practitioners will need to continue working on establishing trust and nurturing it with suppliers and stakeholders.

Also, from a technology perspective, there are already initiatives to close the gap between physical and digital as much as possible. Interestingly, they focus on physical objects (crypto-hardware) and not just on software. These objects are the child of RFID, connected devices, and blockchain, with the intent to create a convergence between the Internet of Things and the Internet of Value (blockchain) to create the Value Internet of Things (VIoT).

In addition to the human and technological answers that will both contribute to creating a truly integrated supply chain (physical + informational + financial), a third component will remain essential: critical thinking.

Trust and verify!

World’s Deadliest Supply Routes: Ice Road Trucking

Are you responsible for sending your people into danger? In a new Procurious blog series, The World’s Deadliest Supply Chains, we investigate the most high-risk supply chains out there…


By James Gabbert / Shutterstock

The intrepid truckers on the temporary ice roads spanning hundreds of kilometres of frozen lakes in Canada and Alaska keep their hands on the door handle for good reason: should the ice crack, they have a split second to leap from the vehicle before it falls into the icy, watery abyss.

For a decade, viewers of the History Channel were given a first-hand view of what motivates these drivers and the perils they face, which include not just a frigid sinkhole but avalanches, whiteouts and hypothermia, even earthquakes and volcanic activity.

Set in Canada’s Northern Territories and Alaska, Ice Road Truckers lasted 11 series between 2007 and 2017.

The truckers’ mission was to supply remote gold and diamond mines and entire small towns with goods in the winter months, when road access is only possible because the lakes have frozen over.

Items included anything from fresh food to mining equipment that would be tricky to transport even on well-laid bitumen.

Featuring nicknames such as “Chains”, “Bear Swensen”, “Polar Bear” and “Hammer Down”, the rough-hewn drivers were often depicted in mishaps such as when they ran off the road or got bogged.

In one episode, viewer favourite Lisa Kelly – one of three female drivers – leaps from her truck amid ominous cracking sounds and a disconcerting build-up of water under her rig’s 18 wheels.

As is the norm for ‘reality’ programs, the series was criticised for overdramatising and promoting reckless behaviour among the truckers – one of them, for example, exclaims “yee-haw!” after driving too fast over a rough patch of road.

The opening sequence showing a truck sinking through the ice was staged at a Hollywood studio in sunny California, using sugar and shaved ice. However, the set-up was based on a real accident at Mackenzie Crossing in Alberta, with the driver apparently not recognising a warning sign that the road was suitable for light loads only.

Some viewers were less than impressed with the skills of the Ice Road Truckers cast. “Who the heck tries to pull out another truck using a chain that has slack in it and then drops the gas [accelerates] and takes off?” asked one heavy-haul driver.

Ventures West Transportation president Glenn Bauer reckons the televised truckers come across as a “bunch of cowboys” (the Alberta-based company hauls fuel to some of the Canadian diamond mines featured early in the series).

He says the only incident he knows about involved road-building equipment falling though the ice. “In reality, it’s very, very controlled,” he told truckingnews.com.

Despite the series’ bent towards entertainment, there’s little doubt that navigating a 70 tonne load over hundreds of kilometres of icy wilderness is inherently dangerous and there have been some fatalities over the years.

Fatalities are rare, though. As a guide, the 27 truckers in the Ice Road Truckers series all lived to tell their war stories, save for Montanan Darrell Ward who died in 2002 aged 52 – in a light plane accident. He was, ironically, on his way to film the pilot for a documentary-style show involving the recovery of plane wrecks.)

One reason for the low fatality rate is that, as with inherently risky aviation, operators are required to follow strict safety protocols.

For instance, trucks travel in convoy (although not too close together) with the most experienced drivers leading, and trucks are limited to speeds as low as 10 kmh. In parts where slush is forming, drivers are advised not to stop altogether lest they get stuck.

The ice roads are not random trails, but can be engineering wonders. One example is the Tibbitt to Contwoyto Winter Road, which spans 595 kilometres from north of Yellowknife into the neighbouring territory of Nanavut.

The width of an eight-lane highway, the road takes 140 workers to build each year and can support 70 tonne, eight-axle articulated trucks.

The famed Dalton Highway in Alaska – spanning 414 miles from Fairbanks to the oilfields of Prudhoe Bay – was the subject of an innovative repair job that itself presented a huge logistics feat.

The massive task involved underlaying 80 kilometres of a vulnerable section of the highway with 1.2 million metres of polystyrene foam strips, to keep the permafrost frosty and to raise the road above flood level.

Apart from a crazy streak, the only formal prerequisites to become an ice-road trucker are completing high school and possessing a heavy commercial truck licence. The truck companies provide the training – not that there is any real substitute for experience.

With no pit stops along the way, the truckers need to be proficient drivers as well as proficient mechanics.

The lure of the lucre is a key motivation, although pay levels vary markedly. Typical remuneration for a season varies between $US20,000 and $US80,000, but harder working truckers can earn up to $US250,000.

The pay levels depend on the distances driven, the type of cargo and the hazard levels.

Despite high competition for relatively few jobs, driver turnover reportedly is very high, with many not returning after their first trip after realising how dangerous the game can be.

A paradox of the ice-trucking game is that while the frigid conditions make for treacherous conditions, warmer-than-expected weather is even worse because the highways are more prone to crack and develop slushy parts.

In the next few years, climate change, rather than ice blizzards and crevasses, may defeat the hardened people of the ice roads.

If you’d like to read additional related content or get involved with thought provoking discussions check out the Supply Chain Pros group – a one stop shop for all your supply chain need

Is AI The New Electricity?

For supply chain professionals, the drive to use AI is there. But how do organisations get to the point when AI-enabled supply chain management is the norm?

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“Electricity changed how the world operated. It upended transportation, manufacturing, agriculture, health care. AI is poised to have a similar impact. Artificial Intelligence already powers many of our interactions today. When you ask Siri for directions, peruse Netflix’s recommendations, or get a fraud alert from your bank, these interactions are led by computer systems using large amounts of data to predict your needs.”

Andrew Ng – Stanford University – March 2018

According to the results of our latest survey, Procurement 2030, supply chain pros are well aware of how impactful AI could be for their profession. Indeed, 92 per cent of professionals believe the profession will transform by 2030 as a direct result of new technological innovations. And 51 per cent predict that, with the help of AI, supply chain professionals will become an agile group of strategic advisors.

The intention to utilise technology is there. But how do organisations get to the point when AI-enabled supply chain management is the norm?

Getting started, and knowing where to start, is tough going – as with anything new and unknown. We know that many supply chain pros are concerned that implementing AI into their supply chains is a complex step. In fact, our survey takers ranked it as the technology they feared most difficult to adopt. But are their fears unfounded?

We want procurement pros to be pushing the limits on Industry 4.0, and the first to adopt new technologies.

And so, in our latest webinar – How AI Saved My Day Job: Confessions from a Supply Chain Pro we’ll be demonstrating that AI is the real deal by giving you the insider information, the low-down, on what it is delivering right now for supply chain teams.

Webinar speakers

We’ll be speaking with supply chain professionals who are already implementing AI in their organisations and have discovered that AI does provide a demonstrable bottom-line impact across all supply chains structures. Speakers include:

  • Rob Allan – Program Director, Supply Chain Insights Offering Management – IBM
  • Tania Seary Founder – Procurious
  • Connie Rekau – EDI Manager – The Master Lock Company
  • Nickolas Bonivento – EDI Manager – Anheuser-Busch InBev

When is the How AI Saved My Day Job webinar?

The webinar takes place on 15th May 10am ET / 3pm BST. Sign up or log in via the form above and we’ll be in touch ahead of the event to provide details on how to join the webinar live.

How do I listen to the How AI Saved My Day Job webinar?

Simply sign up here and you’ll be re-directed to the Supply Chain Pros group where you can access heaps of related content. You will also join the webinar mailing list, so we can provide you with details on how to access the webinar before it goes live.

Help! I can’t make it to the live-stream of the How AI Saved My Day Job webinar?

No problem! If you can’t make the live-stream you can catch up whenever it suits you. We’ll be making it available on Procurious soon after the event (and will be sure to send you a link) so you can listen at your leisure!

Do I have to be a member of Procurious to access the How AI Saved My Day Job webinar?

Yes. To access the webinar you’ll need to sign up to Procurious. You’ll be joining a community of 30,000 like-minded procurement and supply chain peers and gain access to all Procurious’ free resources. You’ll be joining a community of 30,000 like-minded procurement and supply chain peers and gain access to all Procurious’ free resources.

Could AI revolutionise your supply chain and save your day job – allowing you to make better decisions, more efficiently and in a more repeatable way over time? Let’s find out!

Supply Chain Pros: Could AI Save Your Day Job?

Supply chain leaders know AI is a game-changer, a technology that will allow them to optimise their supply chain for competitive advantage. But just how much will it impact your profession?

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Today, business leaders are looking to their supply chains to create differentiation and they recognise that data is a key driver. Having said that, only a small fraction of supply chain data is effectively used, and most companies are virtually blind to data that is unstructured – for instance, from social, weather and IoT sources. With limited visibility it’s difficult to optimize supply chain operations, leaving the business exposed to unnecessary disruptions, delays and risks, as well as increased costs. In fact, 87 per cent of Chief Supply Chain Officers say it is extremely difficult to predict and manage disruptions.

Supply chain leaders know AI is a game-changer, a technology that will allow them to optimise their supply chain for competitive advantage. They understand and have relied on descriptive analytics – using massive volumes of data within the enterprise to understand better what has happened in the past and what is happening today. They’re now ready to explore how to use AI to see beyond the four walls of their business; understand how potential disruptions in the environment could impact the supply chain; and act quickly to seize opportunities or mitigate risk.

A new era of AI in the supply chain

Already, AI capabilities in IBM Watson Supply Chain Solutions are moving from descriptive analytics to predictive insights. We’re helping clients look ahead of supply chain events and see likely delays, demand spikes, supply changes and stockouts with new capabilities, such as anomaly detection in supply chain processes and leveraging conversational analytics for response management. Going even further, we are showing clients the power of prescriptive analytics, where Watson evaluates several dynamic parameters associated with a supply chain scenario and in near real time suggests the best actions and can even automatically create supply chain playbooks.

But this is not the end of the journey. We are also creating a plan where Watson adapts on its own, learning what matters to you and developing the capability to show you where to focus your attention to mitigate disruptions and take advantage of opportunities.

Here are some new capabilities available today (and some that are still to come!) :

  • Expanding data sources for Watson – IBM Supply Chain Insights allows us to add new data sources specific to each client’s challenges in as little as five weeks, accelerating the content that Watson draws from to gain intelligence, from basic ontology and supply chain terminology to weather and now many more external data sources. 
  • Anomaly detection – This new capability in IBM Business Transaction Intelligence for Supply Chain Business Network tracks supply chain transactions, spots anomalies and provides early warning signals so you can discover potential problems and take corrective action sooner. 
  • Optimising order and response management – IBM Order Management software uses AI to select the best location to fulfill an order, adjust availability promises and safety stock levels, and empower customer service reps to make more informed decisions and answer questions with greater accuracy and speed.
  • What’s next for AI – In the future, Watson Supply Chain capabilities will include predicting supply chain cycle times, to new frontiers where Watson adapts to your supply chain and users and learns about trends, issues, actions and behaviors to make recommendations. 

Could AI save your day job?

On 30th April I’ll be taking part in a new Procurious webinar: “How AI Saved My Day Job – Confessions from a Supply Chain Pro.” We’ll be exploring the real-life applications of AI in workplaces today and the problems it can solve for supply chain professionals.

How AI Saved My Day Job – Confessions from a Supply Chain Pro will go-live on 30th April 2019. Sign up here (it’s free) to join the Supply Chain Pros group on Procurious and gain access to this webinar.

World’s Deadliest Supply Routes: Antarctica

Are you responsible for sending your people into danger? In a new Procurious blog series, The World’s Deadliest Supply Chains, we investigate the most high-risk supply chains out there…

By Thelma Amaro Vidales / Shutterstock 

The sight of 1900 rolls of toilet paper would not usually excite your typical urban dweller, but when the consignment supplies a remote Antarctica camp of 350 people for the whole winter it’s a case of unfettered joy and – of course – relief.

The most essential of household essentials was among the 3000 tonnes of provisions and equipment delivered by the chartered US vessel MV Ocean Giant to New Zealand’s Scott Base in January.

The supply drop – which can take up to nine days to unload – included 200 kilograms of coffee beans, 100 cans of peaches, a Toyota Landcruiser, two rowing machines and a triple-glazed window.

According to Antarctica New Zealand logistics manager Paul Woodgate, organisers need to think of everything the isolated community might need, including spare parts for water plants and heaters.

“We need supplies to keep the base clean, everyone fed and warm, and the water flowing,” he told Maori Television.

While routine, MV Ocean Giant’s delivery trip reflects the enormous task of supplying myriad human needs to the frozen wilderness.

While Antarctica might be known as the Lonely Continent, human activity abounds with no fewer than 36 permanent scientific and research bases operating there. In the summer months, many smaller facilities spring up too, all needing to be supplied by the mother camp.

Dangers lurks underneath every crevasse and ice flow, in an environment in which temperatures can fall to minus 90 degrees and winds can howl at more than 300 kilometres an hour.

As with Mt Everest, dozens of people have died on Antarctica’s icy expanses over the years – not just derring-do explorers but workers charged with ensuring the bases are supplied with thousands of items that city folk take for granted.

In 1976, 11 Argentinean airmen were killed when their plane crashed on a reconnaissance mission over Drakes Passage. In a tragic postscript, a helicopter dispatched to recover the bodies also crashed.

In 1971, a Hercules C-130 made a forced landing on a re-supply run to McMurdo Station (the US base on Ross Island that hosts Antarctica’s largest community).

No-one was injured. But the overseers of the US Antarctica program did their sums and realised that salvaging the aircraft would cost $US10m, compared with the $US38m replacement cost.

Seventeen years after it went down, the Hercules was fitted with skis, flown out and pressed into service once again. A testament, indeed, to the durability of the so-called ‘workhorse of the skies’.

As with the Argentinean incident a decade previously, the mission did not have a happy ending: in December 1987 two US sailors died when a different Hercules crashed, while conveying spare parts to the refurbished plane.

These days, the supply chain is made safer with technological advances such as GPS positioning, powerful ice breakers, carbon-fibre skis, freeze-proof laptops, satellite phones and sealed, all-weather runways.

But ‘safer’ is by no means ‘safe’, with many mishaps happening in more recent years.

In January 2016, helicopter pilot David Wood stepped from his aircraft and straight in a crevasse on the Western Ice Shelf, while on a routine mission to re-supply a fuel cache. He was rescued after four lonely hours, but subsequently died from hypothermia.

His death resulted in criminal charges being laid against Australia’s environment departments and a helicopter contractor.

To mitigate the ever-present dangers of Antarctica, governments are constantly stretching the envelope to make the complex logistics requirements that much safer.

In a breakthrough flight, a Royal Australian Air Force Flight C-17A in September 2017 supplied Davis Station from Hobart and then returned to the Tasmanian capital without landing at the base. The 10,000km round trip was made possible by a difficult mid-air refuelling exercise.

The plane air dropped nine tonnes of supplies – including fresh produce – to the base, which is inaccessible by sea from April to October.

Within the next decade, Antarctica’s logistics needs will only expand as more nations establish a presence there, if only to ‘fly the flag’ or with a view to claiming dibs on potential large oil and gas reserves in the future.

Most notably, China has established three bases and three airfields, reportedly spending more on its Antarctic program than any other country.

Six countries have territorial claims to Antarctica: Argentina, Australia, Chile, France, New Zealand, Norway and the UK.

But the Antarctic Treaty actually covers 53 countries, 29 having “consultative status”, which allows them to carry out research.

With 20 airports dotted around Antarctica, helicopters and fixed-wing aircraft are playing an increasingly prominent role – especially during winter months when sea access isn’t possible and roads on the continent are out of action.

“With more time and advancing technology, carrying goods to remote locations in Antarctica will only get easier,” says the Dubai-based Gulf Worldwide Logistics.

“The logistics industry is preparing for advancement in this continent over the next few years.” But again, ‘easier’ does not imply ‘safer’ and logistics operators perennially need to be alert to the dangers. Like the Emperor penguins, Antarctica is not the type of wild environment that can ever truly be tamed.

If you’d like to read additional related content or get involved with thought provoking discussions check out the Supply Chain Pros group – a one stop shop for all your supply chain need


A Supply Chain That Never Forgets

How do you retain knowledge and talent and how do you ensure your supply chain team doesn’t forget key information?  Imagine having a supply chain that never forgets…

By Kletr/ Shutterstock

At last month’s CPO roundtable in London we discussed the importance of improving diversity and inclusion in the workplace, how to nail your next big career move and how AI is enabling supply chain professionals to add greater value to their organisations.

At this point, supply chain and procurement professionals might be getting a bit impatient with AI. We’ve all heard how this technology is poised to revolutionise the supply chain, but day to day you’re not working in R&D; you’re responsible for P&L. You need the insight across the business and with your suppliers – but don’t have a technical degree.  The obvious question you might be asking yourself is – what’s in it for me and the bottom-line performance of my business?

Roger Needham, IBM Supply Chain Consultant, led an insightful discussion on why AI does matter to supply chain and procurement professionals.

IBM’s $2.47 billion supply chain consists of a 12,000-strong supplier base across 100 countries with 150,000 contracts managed. It’s no mean feat managing the risks associated with such a large-scale operation. So when it comes to AI, Roger argues, it’s not a theoretical concept. “AI has been deployed in IBM’s supply chain over four years and it is delivering real bottom line benefit.”

“What led to AI being directly implemented within our supply chain centered around the trade lane and visible logistics elements and how these impacted the supply chain. You can set up a factory perfectly but if you can’t get the materials you need to it then it’s a completely wasted effort.”

“After a Japanese tsunami disrupted our supply lanes in 2011, we asked ourselves how to get better predictive insights of real world supply chain disruptors. IBM Watson Supply Chain is the result.” AI can help manage unforeseen disruptions by alerting key decision makers and working towards solutions.

In Roger’s experience AI can supply chain teams to learn on a daily basis and to do more with less. From concept to final delivery the platform is developing but as a minimum we have to be able to do more with the same. With AI We don’t need to hire three more people, we can do more with the five we already have. And we are learning every day how to deploy this AI into our supply chain.”

Roger outlined the four pillars of Watson Supply Chain.

  1. Identify and alert – Control towers are able to alert supply chain professionals when something goes wrong
  2. Analyse and understand – Watson is able to analyse the impact of a disruption on the business. How many orders will be affected by a tsunami in Japan and what is the value of those orders? A supply chain that can feedback that critical business data is important.
  3. Interact, Collaborate, Resolve – If there’s a challenge that needs solving, Watson can bring all the relevant people into a virtual room and resolve it quickly, also advising who should be in that room.
  4. Learn and Share – How do you retain knowledge and talent and how do you ensure your supply chain team doesn’t forget things?  If your team encounter a problem that has happened before – you won’t know to resolve it if those involved the first time around have now left the business. You’re effectively starting from scratch. Watson, on the other hand, is like an elephant – it never forgets.

“Human and machine always get a better answer than human alone or machine alone” Ginni Rometty, THINK 2018

“Watson gives the information, and the ultimate decision rests with a human being,” explains Roger. “But an issue is solved with two individuals and three email exchanges with Watson advising versus three weeks to resolve with fifteen people and dozens of emails.”

Putting the D in D and I

In today’s workforce, diversity has become a buzzword, with organisations increasingly communicating its importance through their advertising and core business values.

But what does diversity mean, why is it important, how do you achieve it and, once you have it, what do you do with it?

Joelle Payom, Global Strategic Sourcing & Vendor Management Lead explained that there is an enormous pressure for organisations to hire people that are different. But alongside that moral pressure to ‘do the right thing’ is a very strong business case.

“A UK report revealed that the British economy could be boosted by as much as £24 billion if black and minority talent was fully utilised. When you have a diversified workforce you have a broader [talent pool] who are able to bring different ways of working, different ways of dealing with issues and can provide greater innovation.”

As Joelle points out, there is no point in building a diverse workforce if it is not nurtured into being an inclusive one. “To reap the benefits of a diverse workforce it’s vital to have an inclusive environment where everyone is treated equally, feels welcome to participate and can achieve their potential”

Diversity = The What 

A mix of diverse types of people

Inclusion = The How

The strategies and behaviours that welcome, embrace and create value from diversity

“What I want people to take away is that diversity and inclusion (D & I) is not only for women or for people of different ethnicities or sexual orientation. It is for everybody. D & I, which is much more important than diversity, means that we need to provide each human being with equal treatment in the corporate world. By having an inclusive corporate environment for people we can make a change and improve the way society works.”

Being a business leader

Lucy Harding, Partner and Global Head of Practice, Procurement and Supply Chain at Odgers Berndtson led a discussion on what it takes to get to the top and the qualities that will set you apart from the pack when aiming for the C-Suite.

She advises that ambitious procurement and supply chain professionals put the business first and the function second.

“The biggest reason CFOs go to market [for a CPO or Head of Supply Chain] is because they need a business leader, not a function leader.”

They will assume you can do the mechanics of a procurement or supply chain role and will spend far less time testing these specifics, particularly given that most CFOs aren’t in a position to test technical procurement and supply chain competence. “You should know your stuff and they’ll assume that.”

What a hiring CFO really wants to know is how you’ll apply what you know to their business and how you’ll build a talented team below you. Everyone else on the shortlist will equally qualified, from a procurement and supply chain perspective, so it’s about differentiating yourself.

Lucy highlighted a further four crucial capabilities for a prospective CPO or Head of Supply Chain

  • Breath of experience – function and broader business
  • Leadership
  • Learning agility
  • Embrace technology and innovation

IBM Watson Supply Chain sponsored Procurious’ London CPO roundtable on 13th February. 

To request an invitation contact Olga Luscombe. If you’d like to read additional related content or get involved with thought provoking discussions check out the Supply Chain Pros group – a one stop shop for all your supply chain needs