Supply chain leaders must optimize their strategy

The COVID-19 pandemic has left supply chains around the world with numerous cracks. The disruptions and crises it has caused have revealed deep fault lines in both leadership and business operations. Covid has put digital disruption on fast forward, challenging leaders – even those who have historically operated with a predictable and limited disruption to their supply chains.

While some business leaders see Covid as an insurmountable challenge, others, including myself, embrace it as an opportunity. My decades of experience have shown me that disruptions are not just inevitable, they can serve as organizational health indicators. While an outsize disruption can put an organization’s scalability and agility at risk, capable authentic transformational leaders (ATLs) transcend disruptions.

ATLs are innovative, collaborative, empowering and adaptable. They tend to be lifelong learners. After nearly two years of understanding global disruption due to Covid, they’re better positioned than ever to thrive during crises.

They ensure optimized strategies by:

- Driving digital transformation that aligns executive strategy with supply chain capabilities
- Leveraging digital supply chains as a company capability and a competitive advantage
- Optimizing digital leadership
- Practicing individual consideration and intellectual stimulation with employees and suppliers to drive innovation
- Employing Human Capital Management (HCM) tools; using disruption as an opportunity to diversify and close skills gaps – to upskill, reskill, and train.
- Providing a C-Suite/Seat at the table; empowering C-Level supply chain executives.
- Assessing supplier performance consistently
- Leveraging authentic transformational leadership (ATL) and organizational change management (OCM) to galvanize their supply chain’s response to disruption.

How can supply chain leaders prepare and avoid being reactive?

Supply chain resilience is steered by prescriptive and reactive approaches that work in tandem, balancing known knowns with unknown unknowns. ATLs are skilled at finding this balance.

I believe that the breakdown of supply chains that we have witnessed during the pandemic provide transformational opportunities for entire organizations. The complexities of supply chains dictate a transformative effort, one involving collaboration with other leaders, governments, banks, investors, 3PLs, health and regulatory agencies, distribution and transfer network and their respective suppliers.

This delicate ecosystem can be reinforced with tools that integrate humans and technology in ways both prescriptive and corrective. The playbook for ATLs prescribes transformational opportunities, rather than short-term pivots to countermeasure disruption. The results are lean, efficient, optimized, sustainable and agile supply chains.

Here’s how to build them:

- Disrupt the disruption; unchain the linear supply chain and use dynamic alignment that yields a circular and potent supply chain
- Leverage business intelligence and analytics to identify opportunities to drive efficient operations
- Maintain supply chain transparency; be clear and communicative about pricing models, inflation, exchange rates, etc.
- Use block chain and IoT technology to authenticate, trace, and provide transparency of transactions
- Establish and maintain cash liquidity in order to be able to pivot as needed
- Establish anticipatory and forensic supply chains to identify risks using scenarios
- Practice ambidextrous leadership
- Learn from the pandemic-related demand for perishable goods; shift to home offices; decreased demand for social products/services; and runs on products that create short term supply/demand issues
- Reduce the risk of multiple suppliers; review over-engineered products by employing the principle of Occam’s razor (i.e., simple is better) and scale accordingly
- Assess external factors / threats such as regulations, economic, and unknown unknowns
- Institute plans B, C, D; supplier diversity decreases risk and balances cost and reliability.

Tips for ATLs

Finally, here are a few tips for ATLs working to mitigate and redirect the effects of disruption:

- Optimize your supply chain with AI, robotics, digital twins, machine learning, drones, driverless vehicles, 3D printing, etc.
- Smooth out demand to make demand levels more predictable
- Consider insourcing to shorten the supply chain and re-shore / localize suppliers
- Make supply chains disruption agnostic by exploiting digital tools that represent an optimal mix of human and machine capabilities to prevail over current and future disruptions.

How your company weathers disruption depends on the resilience of your supply chain strategy and your leadership practices. Disruption may be inevitable, but for authentic transformational leaders and their companies, it provides an opportunity to transform and thrive. Companies that resist employing digital transformation will be lucky to survive.

Dr. Patricia Anderson is a professor at the Forbes School of Business and Technology with more than 20 years of experience in executive leadership and business. She is also a Certified Change Practitioner and holds an MBA in International Business from Mercer University, and a Doctorate in Transformational Leadership from Concordia University. She resides in Atlanta. She can be reached at [email protected]

SC
MR