The resilient supply chain: How businesses have learned to prepare for incredible circumstances
As businesses have adapted to unprecedented circumstances, supply chain planning has had to evolve and incorporate technological aids to give supply chain planners the space to succeed
If there’s one thing businesses have had to learn over the past 12 months, it is resilience, but how do you get your own supply chain to a state of resilience? It’s a complex question companies in all sectors have been asking and finding different answers to, but frequently the answer lies in a robust planning environment that can thrive off dynamic and quick reactions.
Reuters Events: Supply Chain sat down in a webinar with industry leaders who have led the contingency effort within their companies over the course of the pandemic, to discuss what they had learned about the resilience of their own supply chains, and how they intended to guarantee their supply chain network’s agility, dynamism, and robustness.
The need for visibility
While it may feel like we are on the downside of COVID risk now that vaccines are becoming widely available, unpredictability in supply chains hasn’t ended and is the one definite we can expect ahead. Now is the time to take in lessons learnt so far and incorporate them into long-term business approaches.
There’s a lot that we’ve learned in the last year that I think we can apply to the future years and the potential risks
“There’s a lot that we’ve learned in the last year that I think we can apply to the future years and the potential risks,” said Paul Gallagher, VP North America Supply chain at General Mills, adding that “there’s tissue and muscle that we built in the last year.”
A huge part of the growth has been in elevating visibility and introducing the capacity to react quickly to findings, as well as predict issues before they threaten entire supply chains.
Resilience doesn’t necessarily mean we create a lot of redundancy
“I think everybody’s trying to evaluate what post-COVID looks like” commented Val Hoge, Chief Operating Officer at DHL Supply Chain, but “being able to have that full supply chain view and being able to manage it throughout, particularly in global application, is going to be of great importance.”
“Resilience doesn’t necessarily mean we create a lot of redundancy,” thinks Hoge. “It’s not [only] about building additional inventory, or having to have a flexible model, but it is about visibility. We’ve been finding that being able to add that transparency you need in the supply chain, and being able to be more predictive, is really going to allow us to be more resilient.”
There's opportunity to realise new opportunities, new potential growth opportunities from a customer's perspective, and knowing that what we see in the months to come may not necessarily be built from the history that we've had in the months that have passed
This is why “We have Resilience360, which is a risk management software that allows the business to predict potential supply chain disruptions so that you can easily you know, get ahead of them and mitigate them,” said Hoge.
Even for the most longstanding of firms, there have had to be changes to business practices. “You don’t exist for that length of time,” in General Mills case 150 years, “without building some resilience.” However, they leaned into their experience “to experiment where there's opportunity to realise new opportunities, new potential growth opportunities from a customer's perspective, and knowing that what we see in the months to come may not necessarily be built from the history that we've had in the months that have passed.”
We had multiple control towers across the organisation where we had real-time information. That shared consciousness allowed for you to be able to react to the unknowns, with a level of insight and speed that was able to keep that momentum going
This is why they made “Data and analytics a strategic priority” through building a greater range of dashboards that they made “visible to everybody. We had multiple control towers across the organisation where we had real-time information. That shared consciousness allowed for you to be able to react to the unknowns, with a level of insight and speed that was able to keep that momentum going.”
As the pandemic pushed employees to work from home, outbreaks shut down entire factories, and peak season volumes became the norm, businesses quickly turned to automation to pick up the slack.
“There is no guarantee we have direct labour available all the time,” noted Amit Nastik, Global Head Strategy & Operations and Local Markets Manufacturing at pharmaceutical giant Novartis, which naturally was under immense pressure in 2020. “So, we need to have backup for that with increased automation.”
We made sure that we had digitisation and robotics engaged
Similarly, DHL found they needed machine help to cope with volumes: ‘‘We made sure that we had digitisation and robotics engaged.… Coming up to Q4 peak volume season, it was important for us to be able to make sure that we could accommodate that new volume, with probably less reliance on a labour force,” commented Hoge.
This has given organisations an ability to future-proof their supply chains to some extent, but is not to say that automated enhancements can carry all the work. Gallagher spoke instead about the use of their workforce, and how individuals ensured a resilience that technology cannot yet replace. “Building that culture of a common purpose is absolutely paramount,” he said. “I think what helps navigate is having that clarity of purpose.”
“A lot has to do with human effort and willpower," agreed Nastik.
Overcoming the ‘tyranny of the urgent’
Supplementing human capacity to produce, act and intervene will only become more important as “I think COVID has shown us that not everything we can plan for,” said Nastik, “and it has shown us interruptions like never seen before. Our contingency plans or business plans usually have assumptions, like ‘what do we do if one site is down or one transportation is down, or one border is closed?’” But considering disruption in isolation has simply not been possible in this last year, as issues cascaded, hitting multiple sectors and geographic areas in close timeframes or simultaneously.
Machine learning is probably one of the areas that we think we can maximise the most by being able to have more of that predictability and an opportunity to be able to optimise
The lesson is that “We don’t know what risks are coming our way,” said Gallagher, so “for me, it’s more about how do we build the muscle to be able to react quickly if that risk arises?”
This is where man and machine meet, as the smart supply chain of the future will give supply chain planners the breathing room to make the right decisions.
“Machine learning is probably one of the areas that we think we can maximise the most by being able to have more of that predictability and an opportunity to be able to optimise,” believes Hoge. Indeed, DHL found that they came to heavily “Rely on being able to analyse the demand, look at predicting buying patterns, particularly as we saw an increase in online ordering.’
General Mills found that by working on the complete planning process through both technology and technique it gave them the “Autonomy and the accountability for making decisions at the right level and appropriate escalations,” which then allowed them to “not solely to react to the tyranny of the urgent, but ensure that also we were looking at improvement and transformational activities.”
To hear more supply chain insights from sector leaders directly, check out our Interactive Supply Chain Innovation Week 2021!