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ASCM Insights

Episode 14: Say Goodbye to 2020

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Bob Trebilcock: Welcome to The Rebound where we'll explore the issues facing supply chain managers as our industry gets back up and running in a post-COVID world. This podcast is hosted by Abe Eshkenazi, CEO of the Association for Supply Chain Management and Bob Trebilcock, Editorial Director of Supply Chain Management Review. Remember that Abe and Bob welcome your comments. Now to today's episode.

Bob: Welcome to today's episode of The Rebound, Say Goodbye to 2020. I'm Bob Trebilcock.

Abe Eshkenazi: I'm Abe Eshkenazi.

Bob: Abe, we're coming to the end of the year and the last podcast of the year. When I was thinking about a title for today's recording, Green Day’s “Good Riddance, I Hope You Had the Time of Your Life” came to mind, as did that old saying about the Lincoln assassination “Other than that, Mrs. Lincoln. How did you like the play?” It's been quite a year.

Abe: I think for almost every individual and every organization, this has been a wake-up call for all of us, not only on the health side but on our just daily living. I think most of us are glad to put 2020 in the rearview mirror and get moving forward here.

Bob: I couldn't agree with you more. When we launched this adventure last spring, supply chains were all over the news and for all the wrong reasons. Retail shelves were empty, next-day delivery had morphed into next week delivery, sometimes next month delivery. People just couldn't get the stuff they wanted when they wanted it. That's job one in supply chain management. When we launched this, we had a simple idea to look at what was going right in supply chain management. Our first episode was just you and me talking about what we were watching and it seemed only right to end the year on the same note.

Today you're going to be the guest instead of the host. Let's get started. When you think of the ASCM membership, your organization, and the executives you've spoken to, what's your most important takeaway from the last six months?

Abe: I think that's the wake-up call that we just discussed a little while ago. I think in a number of different ways, the awareness of supply chain has come to the forefront for every consumer, every patient, every organization across the globe. I think that's the first step, is that the interconnectedness and the complexity that is required to have an effective supply chain has really been put to the test. We operated in a very efficient environment prior to the pandemic. We were harmonizing and synchronizing our supplies, our demand, inventories were low, we had a very effective economy prior to this.

Obviously, the impact on a pandemic on every aspect of our lives from, as you just spoke, from our daily commodities to vaccines, we're seeing the impact of supply chain having a dramatic shift on our expectations and also our lives. Then lastly, we are adaptive, and I think that's probably one of the other great takeaways here, is that in spite of the disruptions, in spite of all the challenges that we faced, we're seeing that supply chains can be adaptive, and they can respond when given the opportunity to get the right data and to get back to synchronizing what we do.

Then finally, it's obvious that we are in a rapidly changing environment and that a lot of the rules that we played against and with over the past few years are starting to get challenged in terms of how do you respond, how do you support your consumers, and your patients across the globe? Supply chain is now in everybody's vernacular. The challenge that we have now is to make it as effective, as inefficient as it was prior to the pandemic knowing what we know now about disruptions.

Bob: To that last point, I'm going to throw a curveball out here that we hadn't discussed, but I just wondered if you're seeing the following with ASCM. You and I are both in the supply chain business but not directly. We don't manage supply chains. My readers, your members are the folks that do the heavy lifting, and Peerless Media, the company I work for, we do six magazines. Historically, my little magazine, Supply Chain Management Review, was the smallest in terms of circulation and also the smallest in terms of revenue. This year, with everything going on and supply chain going up in profile, we're still smaller in terms of circulation but all of a sudden, we've risen to the fore as the largest in revenue.

There's an awful lot of interest out there, and like my website traffic now is consistent with our biggest publications. I just wondered in terms of interest in supply chain management if you're seeing at ASCM the uptick in interest in memberships and certifications, that sort of thing?

Abe: Absolutely. I think we're seeing a number of different opportunities here for individuals at entry-level and that is individuals just looking for a job. The demand on logistics, warehousing, and distribution has probably never been greater than it is today. There are opportunities for individuals to get back on to a payroll. These are not necessarily career-oriented individuals but may have been displaced from the retail or some of the food service industries that have been significantly impacted. That's on the entry-level. Mid-career and late-stage careers, we are seeing a significant uptick in terms of not only the demand for supply chain individuals but the quality and the competency of these individuals is being tested right now.

We had a shortage prior to the pandemic, we're seeing it being exasperated even further right now for these talented individuals. Interest is across the board and across industries as well. There are a lot of industries that really didn't see that they had a supply chain program or a supply chain need, and now they're seeing the impact of working with their suppliers and working through their customers. Now they're the common definition and embracing of supply chain as a strategic imperative for a lot of organizations is elevated.

We need to match that, the focus on supply chain as you're describing with competency and the capabilities of individuals that can drive these supply chains into the future. I can't think of a better time for individuals and for supply chain to be recognized for the contribution that it makes.

Bob: Thanks. I want to throw something out that I've been thinking about the last couple of weeks and bear with me because this is a little bit of a long-wind up, but I do have a point at the end. Our first guest was the supply chain leader at the AGCO. They're a large manufacturer of agricultural equipment. They told the story about how they started hearing rumblings of something going on in Wuhan and then Northern Italy that could be disruptive to their business as early January 2019. They took those rumbling serious, they put an action plan in place. What seemed great about their story is they never lost a day of production and they kept operating across the globe.

They came up with a playbook and they just kept going. When we interviewed Greg from AGCO, the story seemed unique. It seemed like everything was falling apart and these folks figured it out. At my conference, and Abe, you did the Q&A with a supply chain leader from Honeywell, we heard a pretty similar story in terms of Honeywell. Hearing these things coming from overseas and Honeywell deciding we got to do something about it. Last week, I was catching up with a friend of mine from college who's the communications for a large, very large global manufacturer of electrical systems.

While we were talking about the effect of the pandemic on our lives, she was telling me that as early as January, they had production in Wuhan, they started hearing about the virus and then they were hearing about Italy. She said before January was out, they were having weekly global meetings of all their global leaders on a conference call. She came home on Valentine's Day, told her husband, "Something bad is coming our way," and she told me how they continued to operate through this whole thing. Then just a week or two ago, the Wall Street Journal did probably the longest article ever in the Wall Street Journal about the CEO of Emerson Electric and sounded just like AGCO, just like Honeywell, just like my friend. What I started wondering is why do you think some companies appear to have heard the warning signals, they took action and other companies were caught flat-footed?

Abe: I think what you're describing is the holy grail for a lot of organizations and that is not only having those early warning signals through transparency and visibility but the ability to take action. I think a lot of information is coming through the supply chain and as we're getting data, supply chain professionals are trying to make sense of it in terms of what does this mean for my production? What does it mean for my suppliers? What does it mean for my distribution system? Those questions are asked almost on a daily basis for organizations trying to rebalance their supply and demand across the globe.

When we take a look at why did these companies thrive, why did they not hurt as bad as a lot of other companies through the disruption first, as we just spoke about transparency and visibility, they had the data. That's the first step - is the availability of information that they were getting. Their scanning systems beyond tier-one were effective. They were getting the warning signals into the organization through their scanning and whether technology or whether through the person-to-person communication. That's first.

Secondly, they were able to discern what that information meant whether through AI or through critical thinking of supply chain professionals, they're now able to take the information and make sense out of it, and saying, "What does this mean to us as an organization? What does it mean to our suppliers? What does it mean to our distribution system?" They took the next step, and saying, "What if?" Their response to the disruption was active, it was not passive. These organizations had the ability to sense data. They had the ability to discern what was significant and what was noise in the background.

Then more importantly, they had the AI and the trained supply chain professionals to respond to these data signals. It's important to note that this is, as you spoke about, this is not unique to any particular company. It's putting those pieces together and making sense out of it to be able to respond to the challenges. We did a wonderful research paper with Morgan Swink on why companies responded better than other companies. Those were some of the key indicators that visibility and transparency, that ability to scan beyond your tier one, and then lastly the ability to take action and respond to these challenges or these data signals that are in the market.

Bob: You just talked a little bit about technology. One of the things that we hear often is that the pandemic sped up the adoption of technology, also the expansion of e-commerce, by about five years. A lot of that adoption, but not all of it, is being driven by the rapid expansion of e-commerce. Of course, you and I have had a number of technology-related guests on The Rebound. When you're thinking about either presenters for your conference, or just what you're keeping an eye on at ASCM, is there a technology or technologies that you think are going to be most useful going forward? What are you watching?

Abe: A really good point there, Bob. I think there's a field on that, our gaining attention of our members beyond the passive interest. There are some that have already been in place, and they were seeing greater investment in those. Obviously, IoT and robotics, those have been within our systems for quite a while now. Now we're seeing that connection between IoT and robotics into AI and predictive analytics. Now that we're going back to the point before about getting information and what do you do with it, there is a tremendous amount of data being generated through these technology systems, and the ability to discern and to identify what's critical for us, what's a leading indicator for us to make changes.

First, leveraging IoT and robotics, the investment that we've made as an industry in that. Next, AI and predictive analytics. That is the ability to discern what you need to do with that information. As we just indicated, there is a wealth of information and data in the marketplace. The ability to narrow it down and what's critical to the organization to act upon obviously is at the forefront. One of the other areas that we're paying attention to and that has picked up a lot of momentum, and I believe we'll have one of our Rebound presenters from FedEx on blockchain. I think this is a significant change for a lot of organizations is the trust in partners and the trust in the technology starts to become more accepted.

I think you'll see quite a bit of change in blockchain, and hopefully focus on the efficiency that it's going to provide. Blockchain, as well as AI, IoT, these are data-generating technologies. The challenge that you have is, how do you embrace that data and then make efficiency and effective decisions out of it so you can enable your organizations? Lastly, the investment in technology has to be matched with the investment in talent. As we've all learned over the years, just investing in technology does not get you over the hump.

You need to match that with the investment in the talent to make use out of the data. While technology is still at the forefront of investment, we hope that it's matched with the technology and the talent that is able to run and discern and use that technology.

Bob: That's a great segue way to our next question because the people side of supply chain is something that I know you and your team focus on at ASCM. We had Katty Kay on the podcast and talked about diversity in workplace. She also talked about the impact of the pandemic on the workplace. What do you think has been the impact of the pandemic on talent in the supply chain, and what's it going to be exact going forward?

Abe: I think this has been an evolving challenge and opportunity for a lot of organizations. If you want to make a difference, supply chain is an area that you need to embrace for a career. In digging down on the impact that the pandemic has had on workforce, not only working from home, but the challenges of maintaining a culture, maintaining that development, mentoring, and fostering cross-division, communication, and collaboration has been a significant challenge for supply chain. Let's dig into a little bit of the areas that we saw that has more significant impact. First, the impact on women has been disproportionate through this pandemic.

Not only did they pick up their work out of the office and bring it home, but they had domestic responsibilities in addition to a lot of individuals having home-school responsibilities. This has been a disproportionate impact on women within the workforce. Secondly, we just talked about the talent gap that we have. A focus on diversity, equity, and inclusion needs to be part of any strategic plan for talent development. If you want to acquire, if you want to retain and if you want to develop the right talent, you need to have diversity within your supply chain, not only in terms of the leadership but in terms of mentoring as well as role models.

We just don't have enough of those individuals in diversity, whether through gender or otherwise for other individuals to embrace. We talked a little bit before about entry-level as well as leadership opportunities within supply chain. There has been no greater example of the need for leadership in supply chain than we've seen through this pandemic. I often use this example quite a bit. There are two functions within an organization that have to know everything that goes on in the company. The first is finance. Nothing goes on in the organization without finance having a role or responsibility. Secondly is supply chain.

Nothing occurs in an organization without supply chain having some impact on it. Yet, when we see leadership development moving into the C suites, specifically COO or CEOs, it's traditionally from the finance or from a sales function. I think what we're seeing is that the leadership now is starting to come from supply chain as well. This is a wonderful opportunity for individuals to drive supply chain talent and leadership through an organization and have the ability and competency to do so. This is a wonderful opportunity for individuals at entry-level, mid-career, and late stage. If you want to make a difference in the world, supply chain provides that great opportunity for you.

Bob: Next the last question. You and I are in the communication and education business and 2020 was the year the supply chain and our events went virtual. How do you think an organization like ASCM and a publication like SCMR are going to need to adapt to reach our audiences?

Abe: I think, like every other industry that we just talked about and the impact that the pandemic has had, I think when we lift the mirror and take a look at ourselves, we recognize like almost every industry that's been affected, we've had to go virtual as well for a lot of the things that we do. Our distribution systems used to have face-to-face blended as well as online activities. Obviously, the pandemic has forced us to a completely online format in the short time after the pandemic hit. What the future of face-to-face looks like as well as blended or online virtual events, I think is a TBD.

I think most organizations, Supply Chain Management Review, ASCM, and a lot of other conference providers are hoping and planning for face-to-face in the future, but I think it's going to be at a lower volume or a lower participation than we've had. While we may desire to have those kinds of events, the question is are employers or individuals comfortable to go to those events? This may be a transition period over maybe a one to two-year period when we start to see the vaccines having a much greater impact on the infection rate.

As we're starting to see the pandemic tamp down, and everybody hopes it's sooner than later, we're probably going to see some of the face-to-face meetings coming back. As your and our organization right now, it is any time, any place, any device that you need to reach your members, and that's what we're focused on right now. We need to meet our members where they need the content as opposed to where we traditionally provided it. No different than food, no different than a lot of the other industries that have been impacted by the shift in demand. We've had a shift in demand in terms of where we deliver and how we deliver our content.

The future will be face-to-face, it will be blended, it will be completely virtual. We need to prepare our organizations to respond to the challenges that our consumers and the companies that we serve alike.

Bob: Last question. There are so many things, but if you have to narrow it down to one or two, what do you think is going to be the lasting impact on supply chains or the pandemic if any?

Abe: I think the focus on resiliency and agility. The disruption has had a significant impact on us. Obviously, we were an industry that focused on efficient and effective supply chains at a low cost with high delivery volumes and frequency. The e-commerce side and the demands from consumers is probably not going to reduce. I think consumers will still expect high variety, low cost, and rapid delivery for their products and services. That's going to drive global supply chains. We also need to pay attention to the disruptions that have occurred.

As we started the conversation that interconnectedness and the complexity of supply chain, when one part of a supply chain does not address or meet its expectations, the ripple effect on the entire supply chain is significant. We're not going to see, well we hope that we never see a disruption like this again. That the impact on organizations is far-reaching in terms of how do you respond to the disruption? We talked about organizations that did respond appropriately. How does resiliency and agility become part of the DNA of an organization? Whether we're talking about environmental pandemics as we're dealing with now or terrorism or cyberattacks that is in the news right now, organizations are dealing with these types of disruptions on a daily basis.

You need supply chain talent and you need supply chain leadership to not only be able to prepare an organization for these types of disruptions but to reduce, mitigate and avoid the types of disruptions that we're focused on. Lastly, we were an industry that focused on just-in-time that reduced the inventory's very efficient effective systems. We need to match that with just-in-case and that is identifying what is critical to our supply chains. What's in the national interest? What's in the global interest for our economies and for our people and our health, and identify how do we respond to the just-in-case demands that are going to be in place in the future?

We don't know what they're going to be but there are going to be disruptions in the future. We need to prepare our supply chains and the ability to respond and to adapt to these different types of environments in the future.

Bob: Thanks. As we're wrapping this up first, I just want to say thanks for doing this. To the listeners, this was to a large degree, Abe's idea. I've had a ball doing it and I'm looking forward to continuing it next year after the new year.

Abe: Bob, I couldn't be more pleased with the work that we've done here. Being able to share our insights and then more importantly getting the individuals that are responsible on our changing supply chain for our listeners, I think has been an extraordinary opportunity for us as an organization and with Supply Chain Management Review, I can't think of a better partner.

Bob: There we go. That's all the time we have today. I want to thank our listeners for listening on this one and all the podcasts we've had a great response to it. I hope you'll be back for our next episode going live on January 14th when we will be joined by Dale Christie, a blockchain strategist with FedEx. Abe referred to him a little earlier and I think you'll find it a great discussion. For The Rebound, I'm Bob Trebilcock.

Abe: I'm Abe Eshkenazi. Have a great holiday and new year.

Bob: The Rebound is a joint production for the Association for Supply Chain Management and Supply Chain Management Review. For more information be sure to visit ascm.org and scmr.com. We hope you'll join us again.

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