By: Eric Jones and Rebecca Niemeyer
Today’s tense global conflicts have forced companies – both big and small – to rethink how they operate their supply chains. Out of this chaos has emerged an unfamiliar supply chain landscape that seems to require more art than science to navigate.
Without any control over resource shortages, transportation issues, or market disruptions, companies have been forced to shift from external inputs, or process leading people, to internal outputs, or people leading process. Adjusting to this shift in approach will be equal parts challenging and rewarding, but ultimately contribute to the continuous improvement and strength of the organization.
Faced with these unprecedented levels of uncertainty, the importance of supply chain resilience cannot be overstated. Here are three ways leaders can rethink supply chain resilience in today’s unpredictable environment:
1. Embrace the Art of Supply Chain
Managing a supply chain is a craft that requires both art and science. The latter is inherently pragmatic, while the former is inherently conceptual. Science seeks to establish fact through analysis, standardization, and repetition. Art uses technical competence and understanding to divert from what is “known” as a strategic means to create value through variation. Said more plainly: if science represents rules, then in this context, art represents diversification.
For example, a 12-point checklist for supplier selection may be a necessary pragmatic starting point – after all, you probably want a financially stable supplier who’s capable of meeting your demand in a timely fashion, has consistently good quality, is ethical, responsible, and so on. However, your starting point should not also be your end point.
Back in 2015 (and unsurprisingly still relevant today) one of Gartner’s Top 25 Key Supply Chain Trends was: “More mature supply chain organizations have dedicated teams and established playbooks for assessing the current and required capabilities of new business and determining the best roadmap…”. To maintain an edge over your competition you need buyers who are both competent and creative – capable of going beyond fixed checklists to identify suppliers open to collaboration for better design, better delivery methods, and can ultimately drive more business value.
2. Use Disruption to Learn How Your Company Truly Functions
When our car runs as intended, we don’t take the time to assess the ways it could potentially break down – let alone what purpose each part serves – because there’s no need. Instead, we focus externally: traffic, construction, or inconvenient red lights affecting our ETA. Only when our car putters to a stop and smoke escapes the hood do we investigate the internal source of damage and solve our immediate problem.
Pre-pandemic, we all had our fair share of unexpected flat tires and dead batteries, (maybe even a few dented rear ends) but for the most part, we could cruise down the interstate confident we’d arrive at our destination. Two years and one global pandemic later, our approach is different: we’re now diligent about routine oil changes, cautious to go below a half tank of gas, and check our tires regularly… or do we?
Every vulnerability within supply chain structures and operational environments has been amplified as a result of disruption. While organizations are understandably thinking ‘as if it wasn’t hard enough already’, the opportunity to investigate structural and operational vulnerabilities can be a ‘blessing in disguise’ for companies to accelerate adoption of more efficient, collaborative, and dynamic supply chain strategies.
3. Change the Way You Manage Change
Traditional change management practices haven’t evolved with today’s fast-paced, interconnected world of digital transformation. What businesses require is a model for change that integrates purpose with methodology, where the only way to win is by working together. This entails:
Deputizing Team Members Towards Action: It is time to prioritize speed over bureaucracy. Empowering non-managerial employees with decision-making authority is new for most organizations, especially those with a strong, traditional hierarchy. This comes down to a fundamental culture of informed trust. Equip the people with the insight and tools to analyze and respond within their scope of responsibility. It is incumbent on executive leadership to set this tone and drive a culture of speed, critical thinking and action.
Aligning, and Then Leveraging, Collaboration: To achieve the highest level of business success internally, everyone has to be in the same boat, rowing in the same direction. This means being transparent with data (always), maintaining an open-door policy, and allowing teams to contribute where they can best help – even across departmental lines.
Driving Action Instead of Dispensing Information: When routine meetings fall into a static exchange of information the original value-add objective is lost. Conversely, when information flows freely, the completeness and status of business inputs become accessible to everyone and meetings transition from status updates to action-driven and solution-oriented. This not only scales communication and alignment across departments, but positively impacts supply chain performance, speed, and agility.
Today’s environment has shifted so drastically, so quickly that previously satisfactory business functions are facing such massive disruptions, making once established supply chain processes no longer seem stable. For some companies, revamping their processes may strictly be pragmatic. For others, keeping pace with change and disruption may require more nuanced methods. For the majority of businesses, it probably requires both.