What will the next 20 years of supply chain look like? And did predictions about the last 20 come true? Amy Thorn, CEO of Supply Chain Leaders in Action, reviews past, present and future.
SCB: People used to talk about “Supply Chain 2020” when it was something in the distant future. Now it’s here. Did 2020 materialize in the way we thought it was going to in the world of supply chain?
Thorn: If you go back to the turn of the millennium, we had already started doing a lot of what’s happening today. The internet was coming on big, although there wasn't quite cloud computing. We had robotics, machine learning, and artificial intelligence. We had warehouse management systems and a relatively sophisticated supply chain. What’s different 20 years later is that it's anchored in. We're still talking about the future of those things, but we've actually seen the positivity and productivity that they've brought to our lives.
SCB: Back then we used to talk about the end-to-end supply chain. People are still talking about it. We didn’t have it 20 years ago — do we have it now?
Thorn: We're much closer to having it. Visibility remains a continual problem. It’s a huge stumbling block. What’s probably changed the most is how global supply chains have become. So now we’re experiencing the coronavirus and geopolitical threats, and people are starting to look at their global supply chains differently. They’re shifting sourcing and countries of origin. Artificial intelligence can help us to deal with some of issues being brought on by labor. It’s not so much that people have to be worried about robots replacing their jobs — they doing relatively menial jobs that robots can take over, and free up individuals to be more creative. I think that's pretty exciting.
SCB: One thing that has changed in 20 years is the profile of the supply-chain professional. What does it require to do your job today in that discipline?
Thorn: There have been leaps and bounds made in the last 20 years in the supply chain as a profession. People are now looking at senior vice presidents of supply chain to be the next CEOs. Before that, they came from finance or sales, not from supply chain.
SCB: Along with the increasing complexity of global trade has come a greater awareness of supply-chain risk. How has the perception of risk changed, and what does it mean today from a supply-chain perspective?
Thorn: I think we're a lot more aware of risk, and executives are doing a much better job at combating and mitigating it. We can use tools like visibility and predictive analytics to decide where the risks are going to come from, and make the decisions we need to make before we have to respond to a crisis.
SCB: Have supply chains learned their lessons from past disasters?
Thorn: Unfortunately it has been proven that they have to have it hammered into them time and time again. Executives can be shortsighted. If the crisis isn't happening now, they don't have to solve it. It’s about being strategic and adopting a long-term perspective — having the right analytics to assess where your supplies are coming from. You can't be too dependent on one single country or geography.
SCB: To what degree is there, first, a public awareness of what a supply chain is today? And second, its potential impact on share price and the investor community. Do supply-chain executives get that kind of respect and understanding?
Thorn: That's definitely what we hope. I do think that awareness of supply chain has percolated down into the public quite a bit in the last 20 years. A lot of our universities have had tremendous success in bringing us the talent we need, and showing young millennials that a career in supply chain can be profitable and make a difference in the quality of people’s lives. Those are our future leaders.
SCB: What do you think is the single biggest challenge they face, or the biggest single surprise? What’s coming down the pike in terms of the biggest disruptive factor in supply chain in the years ahead?
Thorn: It’s going to be about where the supply chain mixes. How do you make sure you're leveraging your assets and putting them in the right place? And how do you predict human behavior? Look at the creation of Amazon and social media, and some of the other things that have happened over the last 20 years. They’ve changed the way consumers think about and buy products.
Probably the number-one change in the last two decades has been the creation of the customer-centric experience. Twenty years ago, consumers just bought. They were given some brands and didn't think much about it. Whereas now they're making informed, intelligent decisions. They're demanding to know where their products are coming from, where they're sourced, and when they're going to arrive.
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