Ambitious visions clash with reality, but optimism reigns
Humanity can be fickle, swinging between extremes before finding a happy medium. During the Covid-19 crisis we have heard both how nothing will change, and that everything will be different in the “new normal”. And so, for the logistics industry and global supply chains we observe how lack of visibility and flexibility have been the cause of the management challenges; “he who fails to plan is planning to fail”. But the industry got so much right keeping global trade flowing and moving critical products to their destination. Even more positive news came from the glimpse we all saw of developments and enhancements to ways of working and innovation that could bring step changes to the industry.
This week’s F&L discussion poured some cold water on more extreme statements, looked beyond short term demand volatility and debated how we might find opportunities to build a more sustainable supply chain as global trade looks beyond what’s happening today. There is room for optimism and the crisis may be an accelerator. Just-in-time supply chains could be transformed by technology to develop “lean resilience”; supply chains could be rationalised, and visibility enhanced with tools and technological innovation that is already available. What is missing? Houston we have a data problem! To solve the data concerns, perhaps, we need to create financial incentives and pivot the supply chain model so that confidentiality and trust is preserved whilst efficiency benefits are derived by all. Developing smarter tools and new (impartial) services can be part of the answer.
Maybe we do not yet have the 7 new wonders of the new trading world, but we do have examples of practices we can all build on. Here are 7 positive developments our speakers and audience discussed:
1. Industries have started to act collectively, realising that to do so can overcome years of inertia and provide benefits to all – just imagine if industry models could be built to share data and supercharge supply chain analytics.
2. There has been a step change in transparency and dialogue between industry partners required to manage demand volatility and supply chain barriers – transparency and visibility could be transformed through the adoption of technological innovation.
3. There has been the glimpse of collaboration between machines automating and speeding up processes and avoiding human error – perhaps we could even “decouple” physically and let the digital machines do the “heavy lifting”, leaving us humans to progress what we are good at.
4. The importance of human relationships has been redefined highlighting that the supply chain is not purely transactional – improvisation and relations based on trust smooth understanding and the ability to respond to volatile demand.
5. We have glimpsed at the effects a crisis can trigger but also the benefits of forced change – the transition to carbon neutrality (2050 in the EU) requires vision, will and investment but we know the benefits and the detrimental effects of a permanent crisis.
6. International standards matter to bring people together and move fast to overcome obstacles; sometimes supranational bodies and agreed benchmarks can be both positive goals and means of cohesion.
7. Recognition of supply chains has been transformed from Cinderella service to key priority – the crisis has created an understanding that the supply chain is not just the plumbing, but a critical industry.
It might not be the Hanging Gardens of Babylon in the ancient world or the Great Wall of China in the “new” world, but these 7 points are an illustration of what we could achieve!
Our own debate may be only a small contribution to the thinking around “what next” but with intellectual and operational leadership we can grasp the opportunities arising and shape the way the industry works. There is much to be positive about and to plan for in the future.
Kindly ELABORATED by Wolfgang Lehmacher on Sunday 24 May https://www.linkedin.com/pulse/ambitious-visions-clash-reality-optimism-reigns-wolfgang-lehmacher/?trackingId=eDQsCTODRsOdIf0sgvco%2FQ%3D%3D
The World Economic Forum has just published its risk update in relation to Covid-19 and this provides useful background information and up-to-date risk analysis.
Our next discussion looks at finance and the health/funding credibility of the sector on Thursday 28th May (16:00 CET). For more news from the supply chain front-line, join the F&L discussion.
Wolfgang Lehmacher (Supply Chain & Technology Strategist, formerly Head of Supply Chain and Transport Industries at the World Economic Forum)
Miklós Horváth (Director E-Track and numerous other ventures)
Sara Udvari (Global Transport Production Manager at Ikea)
Philip Evans, F&L Secretary General