Tag Archives: supply chain predictions

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

Risky Business in Procurement and Supply Management

What sort of fallout can you expect to see from a supply chain scandal? What should you do when a risky event takes place? Tune in to today’s podcast on risk in procurement and supply chain, featuring ISM CEO Tom Derry and Procurious Founder Tania Seary.

Today we’re faced with complex supply chain challenges. In fact, it’s hard to think of an area of the business that modern procurement doesn’t touch, ranging from employment law, to climate change, to human rights.

As the complexity of supply chains continues to increase, so too does the number of issues we need to deal with, which is why supply chain disruption is often quoted as the number one concern of CEOs. They know that supply chain failures can have a dramatic impact on their public reputation – and their company share price.

ISM CEO Tom Derry joined Procurious to discuss how a supply chain disruption can damage an organisation, and what can be done to mitigate the risk.

What kind of fallout is a company likely to see as a result of a supply chain scandal?

Tom: From a Board and CEO point of view, there was an academic study written by a professor out of Georgia Tech a few years back that revealed that if there’s a publicly announced supply chain disruption, that company will experience a lower stock price for at least five years after the event. We’re talking about a catastrophic destruction of market cap and value for companies that experience disruption.

The other fallout is a permanent loss of sales. My 21-year-old daughter makes decisions about the products she buys based on what she knows about the company’s social and sustainability practices. If she hears something about a company that she doesn’t agree with, that company has lost her business for the rest of her life – that could be as much as 80 years of lost sales!

On the other hand, companies that have built up good social equity because of their CSR and sustainability practices don’t tend to suffer the same kind of heavy damage.

What are the common-sense steps to take to ensure your risk management is in order?

Tom: The first thing to understand is this doesn’t require an expensive consultant to run 10,000 Monte-Carlo simulations, give you a probability assessment or sell you a 2×2 matrix.

For procurement and supply management professionals, it’s important to look beyond the first tier of suppliers to where your organisation is really vulnerable – three or four levels down.

You should know every single-source supplier in your supply base, and you should have plans in place for immediately dealing with an issue with one of those sources.

You need to beware of geopolitical risk. If something changes – if an industry gets nationalised or if someone unexpectedly wins an election or referendum – what will your answer be if a scenario like that develops?

Look at the other side of the company. What are the products and services you’re selling, and what in your supply base could put that at risk? We should understand how the activities we are performing help support the business in making its money, and look there for risks that could really disrupt the business. 

How do you minimise fallout from a risk event taking place?

Tom: Wait. In the heat of the moment, it’s a natural human feeling to get defensive when you’re being criticised. An immediate instinct might be to get out there and say that the fault lies with someone else, but that would be a mistake. Don’t give into that instinct to blame, deny and defend. Instead, take a measured view of what’s going on, then accept ownership and responsibility. People will give you a lot of credit for being open, straightforward and transparent about a mistake. If you try to dodge it, it’s going to get worse before it gets better.

Part Five of Tuesdays with Tom is available now. Click here to sign up and hear ISM CEO Tom Derry discuss what sort of fallout you can expect to see from a supply chain scandal and what should you do when a risky event takes place?