Louisa Hosegood, Digital and Strategy Director at Bis Henderson Consulting, draws on the team’s experience to set out a strategy for supply chain leaders.
New challenges and constantly evolving operating models are nothing new for supply chains – they are expected to be everything to everyone – resilient, fast, cost-effective, convenient, sustainable, responsible, responsive. The current combination of interlinked threats, from Covid and Brexit, to carbon dioxide availability, energy pricing, global shipping turmoil, driver and other labour shortages, to name just a few – may be unprecedented, but they are not unrepeatable. Many have been building for years, and they overlay more fundamental changes in consumer behaviours and expectations.
Even before Covid businesses were under constant pressure to balance the competing demands and changes from customers, suppliers, the external economic and political world, investors, stakeholders and staff.
Some of these, such as the impact of Covid, were truly unpredictable. Others have been in plain sight – Brexit has been a ‘thing’ for five years, driver shortages building predictably for a decade. Ecommerce growth and high street shop closures are not new, shorter product lifecycles and material sourcing changes have not appeared overnight, rising customer expectations and increasing regulations have been pain-points for a long while.
Faced with ever more diverse consumer preferences often driven by social media, the old, largely stable, model of mass production mediated through mass marketing no longer works.
The ‘nuts and bolts’ of our supply chains have never been more efficient, but the task they are asked to achieve is changing beyond recognition.
The global toilet roll shortages of the early pandemic, for example, were more about changes in patterns of consumer demand – in this case panic buying – rather than serious supply chain failings. In his recent book, ‘The New (AB)normal: Reshaping Business and Supply Chain Strategy Beyond Covid-19,’ Yossi Sheffi, Director of the MIT Center for Transportation and Logistics, makes the case that The Covid pandemic didn’t actually break the global supply chain, it simply revealed underlying cracks and accelerated shifts that were already well underway.
You could argue that the bright spotlight of Covid has acted simply as a catalyst – it has accelerated the need for change, and the case for a new approach to the future of supply chain.
And what is that future supply chain aiming to deliver? According to the Gartner 2020 Future of Supply Chain survey, 97% of leaders said their digital supply chain strategy was striving to improve customer experience, whilst at the same time 98% said the aim is also to reduce costs.