New Realities Demand Supply Chain Agility and Resilience

Stephen DeAngelis

May 26, 2021

Most experts agree the COVID-19 pandemic marked a paradigm shift in the business environment. A paradigm shift means some of what has happened in the past becomes irrelevant to future activities; nevertheless, we are all tempted to look to the past. Most people are familiar with tragic stories about people who couldn’t resist looking back. In the Old Testament, we find the story of Lot’s family fleeing the wicked city of Sodom at the urging of angels so they could be saved from the impending disaster that was about to strike the city. They were given the command, “Flee for your lives! Don’t look back, and don’t stop anywhere in the plain! Flee to the mountains or you will be swept away!”[1] For reasons unknown, Lot’s wife turned to look back at the doomed city and was reportedly turned into a pillar of salt. Lot’s wife isn’t the only tragic figure whose life was adversely by succumbing to the temptation to look back. Heather Wishart-Smith, the Senior Vice President, Technology & Innovation for Jacobs, recounts the story of Orpheus. She writes, “Orpheus, regarded in Greek mythology as a musician without equal, loses his beloved wife Eurydice to a fatal snakebite. Travelling to the underworld, he beguiles the lord and lady of the dead through the power of his music to release his wife and restore her to life. They agree, but on the condition that Orpheus walk ahead of his wife on the road leading out of Hades without looking back. Just before Eurydice makes it across the threshold, the doubting Orpheus succumbs to the temptation to turn around to make sure his wife was really following him. Orpheus sees her shade for a brief moment but having broken his agreement with Hades, Eurydice is lost to him. She is compelled to return to the underworld forever, leaving Orpheus inconsolable.”[2]

 

Of course, not everyone who looks back or looks to the past is met with some dreadful end; however, when the world has changed, one should be very careful about the lessons they think history is teaching them. We must remember that even after a paradigm shift not everything has changed. Understanding what has changed and what hasn’t changed is essential for moving forward. This is especially true in the supply chain arena. Mike Uskert, managing vice president and chief of research for Gartner’s supply chain research practice, writes, “The transformation and digitalization of supply chains has been an ongoing evolution for years. COVID-19 acted as a catalyst, accelerating the transformation, but also reshaping how chief supply chain officers (CSCOs) reimagine the future of supply chain.”[3]

 

Digitalization Can Help

 

“The pandemic put global supply chain networks in the spotlight,” Uskert writes. “It highlighted their weaknesses and flaws.” To address weaknesses and flaws, Uskert believes digitalization provides part of the answer. He adds, however, “Digitalization for its own sake is not enough. Supply chain leaders also must use new technologies to adapt to the ever-changing environment in which they’re operating. A more disruptive geopolitical landscape and the supply chain’s role in the organization’s sustainability efforts call for new strategies and mindsets.” Tricia Wang (@triciawang), a self-described Tech Ethnographer & Sociologist, agrees with that position. She has stated, “A lot of companies treat digital as if they are ‘doing digital’ — this is ‘digitization’ at its worst — as if it’s some checklist of things to do. It’s very transactional, and people are so busy doing digital they don’t even know WHY they are doing it in the first place! Whereas [some companies] embrace ‘being digital’ — this is ‘digital transformation’ at its best — it’s a total paradigm shift in the culture and operations — it’s not just about buying the latest digital tool, but about creating a new system, new cadence, new mindset.”[4]

 

New mindsets are important because paradigm shifts require you to look at the world in a new and different way. Your old mindset might tempt you to look back when you should be looking ahead — and trying to steer your efforts looking in the rear-view mirror could prove disastrous. Anthony Casciano, President and CEO of Siemens Financial Services, Inc., writes, “We are dealing with the consequences [of the pandemic] every day, but there are also many other current and potential future disruptors — from climate change and de-globalization to shifting demographics and technological advancement — that convince us that a review of supply chain strategy is necessary.”[5] Here’s the rub. Uskert notes, “One of the top priorities for companies now is to improve supply chains’ resilience and agility in meeting customer needs. At the same time, the pressure to contain costs isn’t going away as customers demand competitive pricing and CEOs watch their margins.” Improving resilience and agility while cutting costs is more than just a tall order — and achieving those aims is impossible without digitalization.

 

Trends Making Supply Chains More Agile and Resilient

 

Uskert asserts automation technologies, such as artificial intelligence (AI), robotic process automation (RPA), the Internet of Things (IoT), and blockchain will help supply chains become more agile and resilient. He didn’t specifically mention the most important thing when it comes to digitalization: data. Jonathan Wright (@jjwright101), global head, cognitive process re-engineering at IBM, writes, “Now is the time to adopt an ‘inside-out’ perspective, leveraging the unique strength of company-owned data partnered with emerging technologies for a stronger, more resilient future.”[6] To do that he suggests companies need to get onboard with five technology trends. They are:

 

1. Customized customer experiences. He writes, “With the new generation of consumer expecting to order what they want, when they want, from wherever they want, hyper-personalized buying experiences are becoming the norm. Supply chains need to deliver differentiation through radical customer customization, with the customer experience integral to virtually all operational touchpoints.”

 

2. Self-learning operations. Wright believes, “Supply chains should strive for autonomy, with connected devices and assets that understand the current state, learn and take action accordingly. This next-generation approach to supply chain planning uses AI capabilities to sense and respond to change, maintain continuity during disruptions, foster constant collaboration between disparate teams and external partners and shift from demand response to predictive demand creation.”

 

3. Agile operating models. Like Uskert, Wright believes agility is essential for post-pandemic supply chains. He explains, “Agile operating models can provide near-instant insights in support of an organization’s workforce, ecosystems and fluid work unit teams.”

 

4. Transparent, ethical networks. Wright notes, “Blockchains can enable cross-industry, multi-enterprise networks to provide shared visibility into trusted data that can drive insights and decisions. When connected with the supply chain, blockchain networks can also remove transactional blind spots between partners, reduce order errors and improve dispute resolution.”

 

Concluding Thoughts

 

Although we are all connected to the past, we cannot expect historical precedents to win the day in the aftermath of a paradigm shift. New technologies and real-time data can help supply chain professionals steer their companies safely through the turbid waters of the next few months and years. Agility and resilience are the watchwords of the day. Uskert adds, “Being profitable is no longer enough when faced with the existential environmental impacts on stakeholder groups across the value chain. … For many organizations, the most significant end-to-end environmental impacts come from supply chains. … Again, digitalization helps. A digital partner ecosystem powered by technologies such as blockchain and the Internet of Things will foster collaboration, increase visibility and support better risk management.” There’s no looking back.

 

Footnotes
[1] Genesis 19:16 (New International Version).
[2] Heather Wishart-Smith, “Don’t Look Back: Innovation, Supply Chains And Moving Forward With Trust,” Forbes, 19 April 2021.
[3] Mike Uskert, “The Future of Supply Chain: Resilient, Agile, Purpose-Driven,” Smarter with Gartner, 26 February 2021.
[4] Trevor Miles, “Let’s be clear: Digitization is not the same as Digital Transformation,” Kinaxis Blog, 8 December 2017.
[5] Anthony Casciano, “Adapt Your Supply Chain to New Realities,” Middle Growth Market, 20 April 2021.
[6] Jonathan Wright, “5 Trends Every Supply Chain Leader Should Focus on in 2021,” Supply & Demand Chain Executive, 31 March 2021.