Tag Archives: future

A new supply chain paradigm

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Every generation has had its own global catastrophe, whether caused by ourselves or nature. And as every catastrophe challenges societies and cultures at the time, they also challenge the status quo. Yes, things do and will change.

COVID-19 has laid bare weak links in supply chain around the world. And now all involved in the supply chain are beginning (if they haven’t already) to review, reassess and consider other options.

But, did we really get it all that wrong based on the data and information we had at the time (prior to covid-19)? Definitely, many a BCP written within the last 10 years highlighted a number of weaknesses including those we see now, what we did not count on was the fallout of these – the subsequent events that have made the risks to the supply chain multiply as time goes on. China states it is getting its processes back on line, but the bull-whip effect from the panic buying, hoarding and (likely) government actions to limit continued or even secondary covid-19 events, will take its toll for a while to come.

Markets will change as the psyche of the customer changes, and the supply chain will morph into something completely different to today’s. We will probably see a rapid return to “make/buy local’ and although it will not be a complete shift, it will definitely be the critical components (for manufacturers). This change will become a feedback loop, those in the BRICS group will change their inter-relationships as China’s market/manufacturing changes.

As with any major disruptor – not a new invention or new software – but real disruptor a global one, there will be a repositioning of power, as governments rewrite legislation to control the flow of goods (they are already looking at this), countries lose their attraction as costs to obtain goods increase, manufacturing moves back on-shore as companies lessen their reliance on cheap but long supply chains.

Other considerations for the supply chain will be the environmental risks that are now regularly appearing, such as rampant fires, devastating floods and earthquakes – irrespective of where/why/who, the environment will be a consideration. As will the geopolitical world we have woven for ourselves. Future forecasting and supply chain planning will not be limited to cost mitigation, improved utilisation of resources, reduction in inventories and velocity to market. There will be a multitude of risks that will need to be:

  1. Identified
  2. Classified
  3. Quantified and then
  4. Mitigated as best as possible

As I see it, there will be an increase in local suppliers (although not for everything), there will be an increase in the need for information all along the supply chain prompting an increase in IOT and probably, block-chain, along with advanced forecasting software, including AI and predictive modelling. There will also be a need for more collaboration between partners to enhance efficiency plus much more.

Globalisation, will still be around but not in the way we have become accustomed to. And, although we will return to BAU, it will be a new and for a while a very challenging BAU. This is about Change with a capital “C”, it will be an exciting time, for tomorrow will be driven by those who can think laterally, out-side-the-box, have a variety of experiences, a range of skills and not be attached to the “old ways” – at least for the near future.

Innovation – Fueled by failure, driven by success.

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I am currently reading a book called “Innovation – the Attacker’s Advantage” by Richard Foster, although written and purchased a while ago (1980’s), it is still very interesting reading now that we can  travel back to the future, and still pertinent.

Another very good article on Innovation is from Stanford Graduate School of Business on why failure is considered a good thing:  Why Failure Drives Innovation.

My personal observations are that people of Mind set-1 (see Why Failure Drives Innovation)  rely on systems and procedures to improve what they have in an attempt to continue the success they once had.  Yes the tools such as 5S and six sigma and TQM and Lean and …..etc,   all add value to the process of improving quality and  reducing costs.

But it is the innovators, those that Baba Shiv calls Mind set-2, who are the ones that bring real success.   Improving what you have to the Nth degree is all fine and good and does save plenty of pennies. But this is neither sustainable nor effective in the long run – refer to Richard Foster’s  S-Curve pertaining to Performance vs Effort (funds).

Take land transport:  although humans have used the horse and donkey for a long time it was not until the invention of the wheel around 4,000-3,500 years ago when things really got moving, especially with the advent of the cart and chariot around 3,500 years ago.  But things remained slow for a couple of millennium, yes they improved the carts and wagons but they were still limited by the technology of the time. Then came steam during the 18th century and mass transportation began, people and goods being moved all over the country – but restricted to the rail corridor.  The next leap forward was the invention of the internal combustion engine by an innovator called Jean Joseph Etienne Lenoir – although the automobile was not patented until 1890’s.  And now, we have car  companies improving the effectiveness, efficiency and aesthetics of the automobile but they are still pretty much the same.  The next leap forward is the introduction of the electric car and levitating train.

As you can see, the periods between innovation are getting shorter. But innovation is at all levels, in all industries and in all countries, it is the Innovators who are making the jump, building the bridges to the future, the rest follow, some with eagerness while some dragged and screaming and the rest blindly.

Me, well I can’t wait for the strap-on, Personal Anti-gravity Commuter vehicle. Now that’s a back-pac!