UnitedLog asked Logipi to interview supply chain thought leaders from around the world to hear their views on how the recession has impacted supply chain management. They asked 4 questions to these supply chain professionals, the following is a summary of one of these questions:

 What improvements, good consequences and lessons learned do you see? How are we better off?

Career Advancement Opportunities

Pedro Rodriguez says there is an increased focus on supply chain as a key strategic value for the company. He sites examples of people being promoted to senior vice presidents from vice presidents where there was a job that didn’t exist prior to the recession because the CEO wanted to have a senior vice president of supply chain in their teams, at the highest level.  Chris Russell believes there is much more attention on the C-suite—with the chief operating officer, your chief executive officer—there’s more recognition on their part of the impact of logistics and supply chain, whether it’s managing the inventory, managing the sourcing, or managing the transportation. Increasingly, the C-suite executives are starting to really get the impact of supply chain.  Paula Rosenblum also says that the recession has shone a spotlight on supply chain and its intimate effects on the business as a whole. The recession has opened a significant opportunity for supply chain leaders to actually get a voice at the table where the corporate strategies are defined.

Better Supply Chains

Chris Russell goes on to say that the companies that exit the recession intact will be much stronger operationally and in their leadership. They will be much stronger operationally because they will be leaner, and they will be focused on their core values because the recession forces you to think about what exactly you are adding the most value in. A down business cycle will also bring out the leaders in your organization.  Mike Star says it has been a crash course in lean just-in-time supply chain management. Companies have a much better idea of where their vulnerabilities lie, where their inefficiencies are, and the recession has forced companies to improve their collaboration between those of the supply chain—suppliers communicating better with manufacturers, communicating on up through the distribution channels and on to the retailers. The true change will happen when the economy rebounds. Then, with a gradual increase in supply-demand and with new capital and funding, we will see an extremely streamlined supply chain processes. The companies that have taken the trouble to cut 'fat' will see an upswing. The companies that acted too late either have perished or will not see growth later on. Rakesh Parimi confirms this by saying that when the recession ends, we will see a new wave of B2B innovation, which will mark the new era in extremely streamlined and rationalized supply chain management.

David Schneider says that many companies have moved to third party logistics providers (3PLs). These companies also decided to eliminate pieces or members of their staff because they didn’t need the redundancy. These companies experienced a net gain not only in cost reduction, but also in capability because the 3PL had greater knowledge and experience. 3PLs that are good and innovative and customer-focused are being able to maintain their business. This helps to winnow out some of the poor-performing 3PLs out of the pool of available 3PLs to work with.  Atif Moin says that more choices are also available in the market due to the innovative solutions provided by new small 3PL players. Smaller providers are taking advantage of the risk averse nature of the larger 3PLs.  Before the recession, people were not considering using smaller 3PLs. However, because the big logistics service providers are now more risk averse, they have tightened their policies, making the smaller 3PLs more attractive.

Pavan Vyas says that in the IT sector there has been a push for new business models and looking at business model innovation to face the challenges that the recession was putting on them.  Paula Rosenblum explains that one innovation in the retail sector has been Distributed Order Management, which allows inventory to be treated as a shared resource across channels. This mitigates the impact of incorrect buying/forecasting. The consequences of this will be seen in the holiday season -- when retailers have either bought exactly right... or under-bought. 
 

Read on > What will we be "missing"? Are there things we will need to learn to live without? >
 

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