As the pandemic continues to be unsettling and businesses have spent most of the past ten months scrambling to adapt, the global crisis has shed a harsh light on the fragility of our old methods. But it was also an opportunity to test resilience, mitigate risk, and innovate. In McKinsey research, many executives reported that they moved 20 to 25 times faster than they thought possible on building supply-chain redundancies, improving data security, and increasing the use of advanced technologies in operations.
Technology Tipping Point
The chaos pushed companies over the technology tipping point, creating a window of opportunity for clean-sheet thinking to rewrite antiquated ways of thinking. There’s no going back—real-time planning and analytics have become a reality. Visibility, collaboration, automation, and intelligence aren’t just buzzwords; they’ve become integral to the successful operation of businesses.
Rodney Manzo, founder and CEO of the cloud-based supplier relationship management platform Anvyl, believes “Technology is a force multiplier for businesses in times of crisis and more so best in breed technology in any given sector.”
Uncertainty remains, but 2021 will be a year of transition, moving past triage mode to shaping the future. The truth is, disruptions aren’t unusual; they can be predictable—financial disruption, political unrest, and mother nature can all create shocks to a supply chain.
Lead with Empathy
While technology is absolutely one piece of creating a supply chain built for the future, it also requires soft skills, like empathy. Although supply chain and empathy don’t often happen in the same conversation, experts believe leading with empathy is critical for future-proofing the operational side of any business against disruptions.
Respect, fairness, and a collaborative mindset are the basic principles that ground Nikita Bhatnagar, Global Sourcing Director at Harry’s, Inc., and her approach to building a supply chain. Relationships matter—treating vendors as thought partners build the long-term relationships.
Sharing insight on the impact of empathy during the pandemic, Bhatnagar said, “I think back to the suppliers, or the supply chains, that have really thrived during this time, and ‘thrive’ for me is defined as not just getting impacted, but coming back stronger. Those supply chains were with suppliers where we had great relationships. We were prioritized, given clear updates and timelines. Conversely, the supply chains where I saw the most disruptions without quick resolves were with suppliers where we had more of that transactional relationship.”
Providing insight into how suppliers think, Manzo believes, “Having empathy is a more critical requirement today than ever in supply chain. In the past, it has been easy to focus on tactical efforts. However, with limited resources such as time, money, and capacity, suppliers focus on supporting customers that care about them holistically.”
Often the default approach to making improvements is to lean on a vendor to do things faster or less expensively or face the consequence of losing business. Emily Gu, COO at Behave, believes thinking about empathy from a business-model perspective is a better approach. Ask supply partners “What are the financial drivers for their business? Why does their business exist? How do they make money? How do they make business decisions?”
Taking the time to understand what’s important to your supplier may surface efficiencies or creative ways to make improvements that go beyond the default cheaper, faster approach. Oftentimes operators are hyper-focused on the output or physical good. Being empathetic and able to communicate can be profound competitive advantages.
Dig Deep into Tactics
Building an elastic supply chain was the backbone that supported the ability for digitally native brands like Harry’s and Native to support growth and scale from DTC to traditional brick and mortar.
Bhatnagar suggests investing in three key pillars: systems, processes, and people. From a systems perspective, it’s important to begin with good S&OP processes and planning systems that are agile, addressing both short-term and long-term supply and demand. For her, processes and people go hand in hand, and it’s really important to think about redundancies as you think about building your teams. It’s important to think about what processes you are adding and consider: Is there clear communication? Is there clear communication from end to end in the supply chain? Is everyone working towards shared KPIs and goals? Those are just some of the many things she thinks about when building a resilient supply chain.
For Gu, an elastic supply chain means it can constrict and relax at will, which requires breaking down your supply chain into every component and making sure every single piece works for you and your supplier. For example, when she was at Native and went through this process, she bucketed components into raw materials, manufacturing, plastics, trucking, and shipping and fulfillment. Then one by one, she thought about what they could do for suppliers to equip them with the flexibility she needed and got granular in understanding each of her suppliers’ businesses. After going through this process, you’ll realize there’s a lot you can control.
These were just a few of the topics we tackled on our webinar Hitting Reset: Building a Supply Chain Fit for the Future, available on demand.
