SCMR Interview: A Modern Supply Chain Needs to be Adaptive

We had the opportunity to catch up with Dave Kipe, a past contributor to SCMR and former Senior Vice-President of Global Operations at Scholastic Inc. Mr. Kipe is currently the COO & SVP, Operations for Systemax. In this exclusive interview, he shares his opinion and thoughts on why adaptability must be a critical component of the modern supply chain.

Supply Chain Management: We all think of the modern supply chain as a more efficient supply chain but you're saying it should be more adaptive? How so?

Dave Kipe: First, I think it's important to understand why the original static supply chain has evolved into the modern, or digital, supply chain. What's been driving this evolution? In addition to incredible technological advances, the primary reason comes down to economics. Who doesn't want to drive revenue, cut costs, increase speed to market and even open new, un-tapped markets? Leading and forward-thinking companies started realizing their supply chains could provide strategic differentiation from their competitors. In several industries, companies now compete on the footing of their supply chains as much or more, than on their actual products. One could argue (and I do) that the modern supply chain is a brand itself. At the very least, its value is used as a marketing tool to develop brand, reputation, and differentiation. In addition to basic demand, supply, fulfillment & delivery; companies now expect their supply chains to provide innovative and differentiated solutions, in addition to performing the basics at the highest level.

SCMR: Why is adaptability so important and how do you build that into your modern supply chain?

Kipe: An adaptive supply chain is mapped and built from the customer back that allows companies to quickly (and efficiently) respond to changes in their environment. On the flip side, a static supply chain (which is more prevalent in organizations today) is built with predetermined process map that is not necessarily reflective of changes with the customer or the macro environment. Unfortunately, the modern supply chain alone isn't a holistic supply chain. Why? Undoubtedly, the roots of its' origins were influenced by CFO's across the globe to maximize profit.

SCMR: So what’s change?

Kipe: Now we wake up in 2019 and the demands of today's supply chain management are both financial AND more ethical – the positive actions and behaviors of participants along the supply chain are not only reflective of their quality, but that behavior is now transparent to the customer. Conversely, involvement with suppliers engaged in unsavory activities (i.e. child labor, environmental ignorance, etc) and the companies that associate with them will reflect negatively and most likely, impact the bottom line. No longer is it good enough to evaluate the supply chain in mere profit-driven terms. Modern supply chain management is a holistic exercise and absolutely needs to be adaptable. And ultimately that's a good thing, regardless of how tough that may be to execute.

SCMR: Where does technology come into this conversation about the adaptable supply chain?

Kipe: Technology is and will always be essential in the supply chain. However, a modern and adaptive supply chain shouldn't be just about technology. Yes, I like the cool stuff too; drones, robots, machine learning and AI, but supply chain leaders must be forward thinking about how we leverage all stakeholders, reconfigure and refresh current resources, and in the end, deliver the best experience to the customer possible. An adaptive supply chain doesn't rely on huge big technology investments alone to be successful. Its success is derived from creativity and awareness by being close to your customers needs. When this occurs, you can react to market and customer changes at a moment's notice.

SCMR: Any other tips?

Kipe: I advise supply chain managers to connect people and data and provide real-time visibility into inventory, processes, bottle-necks, and potential hazards. In today's world, being able to deliver efficiently and reliably is no longer enough to differentiate your company from the crowd; especially as competitors in emerging markets are quick to adopt best-in-class practices with the agility and lack of bureaucracy that hinder more mature organizations.

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