The pandemic has exposed the strengths and weaknesses of nearly every organization in nearly every industry, but what has been most telling is how organizations have responded to this crisis. There are those that have had to succumb to the financial impact, while others — even in the same sector — have been able to stay afloat.
A survey of attendees at the 2020 Original Equipment Suppliers Association (OESA) Automotive Supplier Conference reveals the majority of respondents said the global pandemic has accelerated their organization’s desire to create alternative supply chains and/or supply base.
Jeff Jorge, Baker Tilly principal and international services practice leader, presented “Black Swan confined: Leveraging macro-level turmoil to unlock supply chain and organizational resilience” at the annual conference. He discussed what organizations can do to turn significant external pressures into a competitive advantage as well as how they can plan for future “black swan” events.
Leaders who believe the concept that challenges bring opportunities for innovation and growth seem to oversee the organizations that have best weathered this crisis.
For organizations that are still struggling to see the potential, Jorge said he recommends looking at the following guideposts. They range from factors we cannot control (guideposts one and two) to elements that are more controllable (guideposts three, four and five):
Combined, these factors create a continuum from macro-level events that stretch into the four walls of an organization and, in doing so, shine light on the fact that what may appear as a victimization of a company due to external factors are, in fact, more manageable issues that empower organizations to become more proactive. It is up to leadership to determine how to harness the factors that will have a profound impact on their organization for the better and act accordingly with the expectation of such a leadership role.
To use these guideposts in a way that is actually meaningful and actionable, Jorge suggested “evaluate the output of guideposts three, four and five in order to create a platform for growth that is sustainable and avoids risks that could put you in a position to behave differently from peers in your sector.”
Even though your organization cannot control the first two stages, be mindful of them, Jorge said. In fact, use what information you can glean from those external factors to shape what you do in the foresight processing and planning stage. He suggests borrowing a page from organizations that lead their field in supply chain responsiveness and resilience by following the key sequential actions they take, including:
Integrated data gives organizations the ability to plan properly, respond thoughtfully and transform how they not only react to changes to their supply chain, but also drive profitable growth.
Once an organization is employing data analytics to be more proactive, it can use that information to change the “DNA” of its supply chain with confident and assertive measures. Before March 2020, it would have been unthinkable for a well-oiled supply chain organization to change what it has been doing for years. The pandemic has made it necessary, even imperative, for organizations to institute drastic changes to survive the current economy and to move forward in a post-pandemic world. It has triggered organizations to reconsider and rework the operational excellence that has been woven into the DNA of its supply chain and then implement the technological updates required to survive the next disruption that may be around the corner.
Finally, to transition from post-shock stability into sustainability, an organization should focus on and drive growth-enabled actions, which inevitably leads to ongoing near real-time supplier risk monitoring and management. While an organization may already have a pulse on some variables related to the risk of its supply chain, leadership should be taking a hard look at how far downstream into its supply base it can see. With the combined approach shared here, manufacturers can glean visibility into layers far beyond the first tier of suppliers and risks therein, resulting in an aggregated dashboard-style view of the health of its supply chain. A view that is monitored on an ongoing basis, with results “pushed” to functional leaders in their respective organizational areas in a nearly real-time manner.
Build this into the rhythm of an organization in running the business and leading its people, and one can begin to see how the journey from reactive to anticipatory is both achievable and, with proper commitment and support, sustainable.
Executing strategic and business alternatives with discipline and rigor relies heavily upon sound leadership. As Jorge said in his session, “the three controllable guideposts — those that help transition an organization from a position of ‘pandemic victim’ to an empowered one — are unlikely to happen without people working together to conquer obstacles that individually may seem insurmountable, yet are highly achievable collectively.”
For successful execution, Jorge encourages leaders to consider the following:
Baker Tilly professionals are ready to help optimize your supply chain operations. For more information on this topic or to learn how we can help, contact our team.