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How To Transform Supply Chains for a Resilient Future · The Retail Podcast

0:00
Hey there Retail Podcast listeners.
0:02
Today we've got someone very special on our show.
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Meet Professor Richard Wilding, the supply chain superstar from
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Cranfield University. Imagine a thought leader who's
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not only shaped the world of logistics in fields like
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pharmaceuticals, retail and automotive, but also encourages
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business leaders everywhere to make a real difference
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economically, environmentally and societally.
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With over 500 publications under his belt, Richard doesn't just
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talk the talk, he's a much sought after voice, delivering
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keynote speeches around the globe.
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On LinkedIn, you might have stumbled upon his courses on
0:34
resilient supply chain. Plus, he's got a key seat at the
0:38
Global Board of Trustees for CIPS advocating for global
0:41
excellence. And as if he wasn't busy enough,
0:43
in recognition of his outstanding achievements in the
0:46
area of logistics and AMP supply chain management, Professor
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Richard Wilding was appointed an officer of the Most Excellent
0:52
Order of the British Empire, OBE, by Queen Elizabeth the
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Second in the 2013 New Year honors for services to business.
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If you're in the mood to be inspired and informed by a true
1:04
industry giant, stay tuned. Let's join Alex and Professor
1:08
Richard Wildings as he shares his wisdom.
1:11
Obviously, I want to maximize the time that we have with you.
1:14
I know there'll be a lot of listeners who who will be just
1:17
on tenderhooks to to what you had to say.
1:20
I think what would be super useful is if we can break down
1:22
what supply chain is and and get your perspective as as a
1:26
professional professor in in this subject.
1:29
So what is supply chain from your perspective?
1:31
Okay, so. So I think one of the things
1:34
that we're all recognizing now is that competition is no longer
1:38
between an individual organization.
1:41
It's between the supply chains they are part of.
1:44
So this is absolutely critical Then we're not talking about.
1:48
Well, the way I sometimes summarize it just to wind people
1:51
up is, is you're only as good as your worst supplier because
1:55
we're all in networks of all these different organizations.
1:59
So when you start to think about this, it's not a chain, it's a
2:02
network. It's multiple connections all
2:05
going on and that creates some of the.
2:07
If you like the dynamics that we experience within supply chains,
2:11
So when we're starting to actually really reflect on what
2:14
the supply chain is all about, it's all about delivering value
2:19
of course. And really importantly, that
2:22
means as a professor in supply chain strategy, I have to, if
2:26
you like, be very, very close to my marketing colleagues and
2:30
sales colleagues in within the organization.
2:34
Because in a way they have an understanding of what is
2:37
creating value for customers. And I think one of the
2:39
challenges we've had in the past is, is that if you like supply
2:43
chain seen as some operational entity and if it has to
2:49
basically deliver value, but if you don't know what that value
2:53
is very difficult to actually deliver the value.
2:58
So, so from a supply chain perspective.
3:01
You have to understand the competitive strategy.
3:03
That's basically about how demand is created by your
3:07
organization, whatever that is, how value is effectively being
3:13
created. And then from a supply chain
3:16
perspective, my job is really how do I actually deliver that
3:20
value, how do I have the support, the delivery of that
3:23
value? So understanding that customer
3:26
and the customer's customer becomes really front of mind
3:30
when we're actually working in that way.
3:32
So that becomes really important as we're actually moving forward
3:36
to really have that clarity of what's going on.
3:39
And then in simple terms, but it's not that simple really,
3:43
there's often four key things I like to play with.
3:46
It's the supply chain process design.
3:49
The network and infrastructure design even at a more micro
3:53
level this type of equipment we use.
3:55
So that's the overall network could be global, it could be
3:59
more local in the country, but then it's right down to Okay
4:02
what is the infrastructure equipment we're using in a
4:05
particular facility. Because if you've got to be able
4:08
to pick things within 30 minutes, you're going to have
4:10
very different equipment to if you're going to pick things in
4:14
where you're going to date to do it or something like that.
4:16
Information systems, absolutely key.
4:19
So we're going to think about the information systems design
4:21
and then we have to think about the organization.
4:24
This is the people side of things and the skills of people
4:27
and how they're operating as well.
4:29
So that in a nutshell, we have to think about the competition
4:32
is not between the individual companies, it's between the
4:36
supply chains they're part of. And then what we have to reflect
4:40
on, often the definition of youth supply chain management
4:43
is. Supply chain management, it's
4:45
all about the management of relationships with with all the
4:49
stakeholders so that you can enhance value for that final
4:53
customer but also reduce costs for the supply chain as a whole.
4:57
You've got to this is something it what's in it for we you can't
5:02
kill your suppliers, you've got to actually think about the
5:05
totality of what's going on. Otherwise the value delivery
5:09
will start to break down. And that's one of the key things
5:12
that we have to think through too.
5:13
So I think that that's probably not, you know, a super concise
5:18
definition, but I've summarized it in a in a couple of minutes.
5:22
In your experience that you've had over the years specifically
5:27
because I know you also work across supply chains in general,
5:29
not just retail, what is that in terms of the four areas?
5:34
What is the thing that's always surprised you from a retail
5:37
perspective. I think that one of the key
5:39
things that we often find is, is that people will get locked into
5:43
one mode of operation. I think this is, this is quite
5:47
interesting. Now this a term which has been
5:49
used for a while and I've I've used it so and people started
5:52
discussing something called the bimodal supply chain and we
5:55
talked about two modes actually operating.
5:59
So the first mode is really. It's, it's about lean.
6:03
It's about predictable. It's, it's, it's that mode of
6:07
operation. So if you're configuring your
6:09
processes, your infrastructure, your network, your information
6:13
systems and getting your people to work in that that lean
6:16
predictable environment, of course that will structure a
6:20
supply chain in a particular way.
6:22
It will mean that you will have inventory positioned in that
6:25
network in a particular way and so on and so forth.
6:29
That's mode one. Mode two is very much focused on
6:32
agility. It's the flexible side of
6:35
things. It's, it's exploring new options
6:38
and so on and so forth. And one of the things that we
6:41
have to think of, if we think about the old normal, and I'll
6:44
say the old Normal was like 2019 before COVID came along and sort
6:48
of everybody suddenly realized, hey, we've got some issues here
6:53
and bounced out of control. So that old normal you could say
6:59
for most businesses probably about, I don't know 80% of what
7:02
they were up to was in that mode one and maybe a smaller
7:06
proportion in in mode two operations.
7:09
But when COVID came along, everything sort of switched
7:13
around and we're having to operate in that mode.
7:18
Two type of way of working and problem that you get with that
7:24
is. Is your supply chain, your
7:26
processes, your network infrastructure, your information
7:30
systems and your people are all geared to working in mode one
7:35
and it becomes very inefficient then for them to work in mode
7:39
two, if that makes sense. So one of one of the things
7:42
which just early on in 2020 we were talking about the fact that
7:49
you end up in a situation where. You end up with a pre new
7:54
normal, which sounded awful, but what we were saying is we're
7:57
going to be moving into a new normal, which we're sort of in
8:01
now. We're in this new normal.
8:03
The problem is what we've got is we've got a load of supply
8:06
chains, a load of processes, infrastructure, information
8:10
systems and people who are used to operating that old way.
8:15
Now the danger with that is your cost to serve goes through the
8:19
roof because basically what you're trying to do is push
8:21
product. Through a supply chain, which
8:24
isn't structured for the types of things that you're having to
8:27
do. So if you end up in retail with
8:29
everything moving online, the cost to serve dramatically
8:32
changes. And it was fine when you had a
8:35
very small proportion of your orders moving online.
8:38
We can pick from the store. We can do this and we can.
8:41
Do do all the rest of it, all of a sudden when you've got a
8:43
bigger proportion that drives you to have to think very, very
8:46
differently about this because you're into this mode to
8:49
operation. And if you're, I mean we all
8:51
know picking from store is a very inefficient way of doing
8:56
things. If you're doing sort of grocery
8:58
delivery or things like that, really what you need is these
9:01
dark stores which are configured to optimize that type of
9:07
operation and what I would argue is, is the transition.
9:11
That many organizations have been on is just it's just been
9:15
too slow. And the problem that we've got
9:18
it is, is we've got even more stuff coming at us at the
9:22
moment. It's like we're on the ocean and
9:25
we got these waves coming in, more waves coming and more waves
9:29
coming. We get a bit of calm.
9:31
We go, oh, that's great, we're OK.
9:32
But there's still some more waves coming, so.
9:36
This new normal is very different to the old normal and
9:39
therefore we've got to restructure our supply chains to
9:42
work in that way. But unfortunately that takes a
9:46
bit of time because it probably it probably took us 30 years to
9:49
put what we had in before. That's that's part of the
9:52
challenge and I think this is part of the when you see
9:57
retailers get caught out by. The various challenges in their
10:01
supply chain and cost of commodities is, is, is, is high
10:05
and it I think has reduced a little bit since the stop but
10:09
hasn't come down. And it's as you said how do they
10:12
efficiently optimize themselves to be able to serve the
10:17
customers in a in especially with the cost of living crisis
10:21
and an inflation in a in a sensible way.
10:24
But then how do you when you're meeting CEO's or board members
10:28
and they're like. We're we're we're looking at
10:31
reoptimizing this 30 year old beast.
10:34
We think technology is the answer for example, right.
10:37
So we're going to heavily invest in software and optimization in
10:41
our warehouse and everything. I'm just curious from again from
10:46
your experience, what is that thing that they're not thinking
10:48
of? What is that thing that they
10:50
always the got you, if you like when they're going through the
10:53
the system redesign or the process redesign?
10:57
I think one of the challenges for for businesses and it is
11:00
also a challenge for me, it's having also that a long view on
11:04
what's actually going on and you you can't constrain yourself to
11:08
just looking at a a very local market anymore.
11:11
As we've realized, things happening on the other side of
11:14
the world have an impact on on us maybe a few months or a few
11:18
days later. But they do have that thing.
11:21
So one of the things which I've been looking at recently just
11:24
some of the global mega trends so that everybody has their mega
11:27
trend lists. Yeah there are some common
11:30
features. So there's there's a number of
11:32
key things we're seeing. First you you just mentioned IT
11:36
technology and digitization. Now that is absolutely critical.
11:40
That is enabling us to do new things, but it's also enabling
11:44
us to destroy some of the old things as well, so.
11:48
So we we've, we've got some real opportunities with that
11:51
sustainability and the whole ESG environment, social governance
11:58
area, top of people's minds as well.
12:02
But a really interesting thing is a term which is being talked
12:06
about is the multipolar world, right and geopolitics.
12:12
So, So what that is it's multiple centers of power and
12:15
influence. So if we think about.
12:17
How things have changed in just the last five years.
12:20
We're seeing, if you like, centers of power forming around
12:24
the world. It could be China, it could be
12:27
Russia, it could be Iran, and so on and so forth.
12:29
So we can use more fragmented sort of states of states of
12:35
power. That has a big impact on the way
12:38
we manage the networks and supply chains.
12:40
We're dealing with also global economic inflation, of course.
12:45
And that's means that consumers are losing purchasing power.
12:51
I think that's that's the key thing to think about it.
12:54
So if you're we're looking at China at the moment, they're in
12:56
a big deflation, people's wages are in many situations are
13:00
actually dropping and also we're we're seeing the prices as well
13:05
in that particular market are actually dropping.
13:07
Why? Because people have less, less
13:10
cash to actually play with. And and that is ultimately going
13:14
to be sort of impacting us as well.
13:18
We've got this. It's basically what what does
13:20
inflation mean? It just means that I, I get less
13:24
for the money I've got in my pocket, right?
13:26
Yeah. So how can I create that value
13:29
which the customers want in a way that I have to accept that
13:34
I'm probably going to get less, less out of this as well.
13:37
So I'm going to have to get. I'm going to.
13:39
I'm just going to have to think about how I can actually.
13:42
Make my business work much harder.
13:44
And then the other thing which is, is, is just on the horizon
13:48
is the changing demographics and if you like the talent challenge
13:53
that we've got. So if you're looking at some of
13:54
the changing demographics we've got in particular nations, you
13:58
know some nations it's actually, well, I mean most nations it's
14:01
aging or we're getting you know in some, some nations with the
14:05
birth rates have dropped quite dramatically.
14:08
So that actually forcing different things as well and
14:11
that ultimately is going to impact what's actually going on.
14:14
Now from a retail perspective, all of these may have big
14:18
implications for the way we procure, the way we have to
14:22
manage things. So if you've got changing
14:24
demographics, we've got less workforce, we've got to start
14:27
thinking about technology and digitization which means we're
14:30
reliant on less workforce. I was working with an
14:33
organization recently to. Facilities to warehousing,
14:39
facilities doing the same job. One of them was super highly
14:43
automated. One of them had, I think it was
14:47
a couple of 100 people in it doing the same sort of stuff.
14:50
The other one had about, I can't remember what it was about 20 to
14:53
50 people. So it's a big, a big difference.
14:56
So you'd think to yourself, how are we saving loads of money in
14:59
wages and everything else? Well, no.
15:02
Actually, the wage differential was hardly.
15:05
Anything Why? Because those fifty people were
15:07
earning far more because of the technical skills and everything
15:11
else that they needed than the other the other hundreds of
15:14
people in the in the other place.
15:16
And and this is part of the thing that we're having to sort
15:18
of see is that the skills we need for today.
15:21
So going back to my processes, infrastructure, information
15:26
systems, and then the people and organization they if I'm having
15:31
clever warehouses with. Augmented reality and sort of
15:38
collaborative robotics, embedded and so on and so forth, and I
15:43
put that into my infrastructure. That then means that the people
15:46
side of things is going to have to change as well, Okay, because
15:50
I'm going to need different types of people to operate that
15:52
type of infrastructure. It will also have an impact on
15:54
my processes. So because I've got all that, I
15:57
can do things differently. Which then has an impact on my
16:00
information system. So you can see how it it changes
16:05
everything in that particular in in that particular sort of
16:09
environment and that's part of the the challenge of this that
16:13
these things force us to do things differently.
16:16
So global economic inflation, if people got less buying pad,
16:19
what? What is?
16:21
From that perspective, How can we offer the same level of value
16:26
but with less resource? When that that resource is all
16:30
resources, you know including at workforce which is a resource as
16:35
well as it could be the materials we're using and
16:38
everything else which is going back to the sustainability
16:41
agenda. So when we start to think we've
16:43
got these big trends which are there but they're all feeding
16:47
off each other. So from a from a perspective of
16:50
if we're thinking about retail and thinking about what's going
16:53
on, getting back to your original question.
16:56
It's really saying if if I'm sitting there designing a
17:00
warehouse for tomorrow and thinking about what's going on
17:03
there, I've got to have a bit of an eye on what's happening
17:06
globally. Yeah, because some of that is
17:09
going to be impacting us at some point.
17:12
We we're no longer we. We can't think that the old way
17:15
of thinking that you could have the UK is a little island when
17:18
it was beautifully surrounded or you have a nation which is just
17:22
isolated from the world. It doesn't work like that
17:24
anymore. We're totally dependent really
17:27
on that network, that global network which we're dealing
17:30
with. And of course that takes us into
17:33
the whole world of risk and resilience because you then have
17:37
to start thinking through, hang on a minute, can we.
17:40
I need to multishore, not just multisource.
17:44
Yeah, I'm caught out with that during it, during the pandemic,
17:48
people saying, Oh yeah, I'm multisource.
17:50
I've got 3 suppliers. Unfortunately they're all in
17:52
Northern, they're all down. So it's multi shore.
17:56
I need one in Italy, I need one in Brazil, I need one in you
17:59
know the Far East. So that so we we're hearing
18:03
people talking about China plus one, China +2, but they have big
18:07
global implications because all of a sudden if it's China plus
18:11
one that means half your stuff's no longer coming from China.
18:14
So you've got China hurting because they they haven't got.
18:20
That volume of stuff which is going on and if it's China +2,
18:23
that means it's dropped by nearly 60% the orders that
18:28
you're placing on that nature and that then has an impact on
18:31
the social side of things. So yeah, all these things are
18:34
very much interrelated. It's very complex.
18:37
What's the time period that you're thinking of 12 months, 18
18:40
months, 24 months, what is the, I think you're having to really
18:45
sort of look you're having to? It's interesting.
18:49
We did some work on supply chain strategy and how often people
18:53
actually thought about their supply chain strategy and
18:55
developed it. And this work goes back quite a
18:58
number of years. We were doing it in, you know
19:00
the the the 20 tens and stuff like that.
19:02
And in those days everybody used to be talking about this thing
19:05
that Oh yeah, it'll be five year, five year horizon.
19:08
And what we're actually finding now is it's sort of yet you'll
19:11
have a vision of where you're going, but it's got to adapt.
19:14
It's the scenarios, we've got to work through the scenarios.
19:17
In terms of what we're doing and and really if I look at supply
19:21
chain resilience, so I mean resilience, it's not just about
19:25
really important concept and if this is the adaptive capability
19:29
of the supply chain and there's really three key areas, prepare
19:33
for unexpected events, respond to disruptions and recover from
19:39
them by maintaining continuity of operations.
19:43
So it's prepare, respond and recover.
19:47
And that requires, if you like that that that scenario
19:50
planning, How often do you take your supply chain teams through
19:54
a sort of a a simulation of what would happen if this took place.
20:02
What would happen if a volcano went off again in Iceland and
20:07
and grounded grounded air freight again.
20:09
What would happen if the the ports got, you know, shut down
20:15
or? Suez Canal, These are the types
20:18
of things we need to do now. We've seen those come along.
20:22
And the problem is, with many organizations, they're very
20:24
short memories. So corporate memory isn't very
20:28
long. That becomes really important.
20:30
It's how do we actually learn and create that that philosophy
20:36
which we can really think about have front of mind our supply
20:40
chain resilience as we're moving forward.
20:43
And I think it's interesting because I launched oh gosh it is
20:46
just over a year ago now this on LinkedIn learning supply chain
20:53
fundamentals, risk and resilience.
20:54
So it's 90 minutes, 26 short videos, just taking people
21:00
through the basics. And I had to make it really
21:02
accessible to everybody because I believe that this is about who
21:06
you are in a business. Yeah, you've got to understand
21:09
supply chain resilience because if you're in an HR, human
21:12
resources department, for example, you will have an impact
21:15
on supply chain resilience through the people you actually
21:18
recruit into the business. So you need to have an
21:21
understanding of some of the issues which are going on.
21:24
And what's interesting about that is we, we have tools which
21:28
have been available to us for years.
21:30
We've got international standards on risk management and
21:34
we can use those with the supply chain viewpoint and perspective
21:38
and that will really help us. We've got international
21:41
standards on business relationships.
21:43
Pie chain management is all about management of
21:45
relationships. But these things don't happen by
21:48
accident. We have to actually work at them
21:51
and plan them and have a process in place to help develop them.
21:54
So those are available. So all these things enable us to
21:58
go through that sort of prepare, respond and recover and get that
22:03
way of working embedded into our businesses.
22:06
And I mean it's just, it's just it's just really important.
22:09
I mean what's been great about that is it's had over 17,000
22:14
people have completed that well. And I just think about that will
22:18
have big impact whole shit or chain resilience globally
22:23
hopefully in a very positive way.
22:25
But it's getting different businesses thinking about it and
22:29
getting this front of mind when when we're actually doing things
22:33
that that's the importance of what we're trying to achieve
22:36
with this. If you go through the course,
22:37
what you start to realize is, is this is not something for a team
22:41
or an individual to do to a business exactly.
22:45
So it's it's like if you go back a couple of decades, remember
22:49
total quality management and how you'd have a quality department.
22:54
Now many companies are going to do not have a quality
22:57
department. It's just business as usual for
22:59
everybody. Everybody has that embedded,
23:02
that way of thinking, that culture and I think that's
23:05
really important. You need a supply chain risk
23:08
management culture in your business.
23:11
And what I say to people is, is culture, but the simple
23:15
definition which upsets all of my academic colleagues, but I'll
23:17
use it anyway, which is culture is what people do in the absence
23:22
of instruction when they're under a bit of pressure.
23:25
So how does the business respond?
23:27
It's under a bit of pressure. Are they thinking supply chain
23:29
risk or are they just thinking, oh, I need to get my bonus or
23:33
something else? Are they thinking that?
23:35
And what we have to think is, is if everybody says so you're in
23:39
this and you ask the question, how will this change the risk
23:44
profile of the supply chain? How will it change the risk
23:48
profile of the supply chain? So I'm going to start sourcing
23:50
from India rather than China. So how's that going to change
23:54
the risk profile of the supply chain?
23:56
I'm going to introduce these new financial metrics on the
24:00
business. How will that change the risk
24:03
profile of the supply chain? Because it's going to mean that
24:06
people are going to be focusing on this issue rather than
24:10
something over here. I'm going to recruit these types
24:15
of people into this particular role and how will that change
24:19
the risk profile of the supply chain.
24:22
So if you start asking that type of question it becomes becomes
24:26
quite important then as you're as as you're moving forward
24:31
this. So we're starting to see this
24:33
whole, this whole sort of concept coming and this is a
24:36
lovely term which DHL has been talking about.
24:40
They talk about supply chain diversification and it's
24:44
developing flexibility and redundancy to minimize risk and
24:49
increase agility. So, so really it's this
24:52
flexibility and redundancy. So when you look at a supply
24:55
chain, it's, it's that network. How do we keep it healthy, how
25:00
do we keep it healthy? And I was sort of reflecting on
25:02
some of this. I came up with this bit like
25:05
high heart bypass surgery. We we put in a little vein here
25:10
and a little vein there so that we can maintain the flow to keep
25:15
keep the heart healthy. And that's what we're having to
25:19
think about is supply chains. Now in terms of creating that
25:22
resiliency you might have, well, we want to use that main flow
25:25
for the majority of the time, but I need to have a few
25:28
backups, yeah, because something would happen and I need to think
25:32
carefully about that. I do think there's a good
25:34
proportion of supply chain leaders who are starting to
25:38
really reflect on that and also procurement procurement leaders
25:42
as well. I mean it's amazing to see last
25:45
night at the at the Charter Institute procurement SPY awards
25:49
some of the innovation which is taking place there because
25:51
they're having to think a little bit differently because we
25:54
talked about multi shoring. It's actually a tough deal.
25:57
All of a sudden you're trying to find new markets to find these
25:59
things. Do you have the language skills,
26:02
Do you have the capability? Do you how, how do you manage
26:04
the flows and so on and so forth to keep it all working?
26:09
Earlier on in the conversation you you mentioned sustainability
26:12
and its impact on the supply chain.
26:15
I just wonder if we could just spend one or two minutes
26:17
unpacking what sustainability in the supply chain looks like or
26:21
what some of the activities within that area.
26:25
Yeah, I mean one of the key things that we can actually
26:28
start doing is one of the things that is we talk about product,
26:33
service, system. So all this technology and all
26:36
this digitization is actually moving us away from, if you like
26:39
that physical product, so to what we call like a service.
26:44
So we're starting to sell services.
26:46
So it's servitization is the they talk about the innovation a
26:52
number of organizations strategy from products to offering
26:55
solutions and product service systems is products and services
27:00
delivering value to the customer.
27:02
And we're seeing this already be HP printers with getting your
27:06
ink cartridges. It's highly reliant on effective
27:09
supply chain, Rolls Royce, you pay by hour for the use of the
27:13
engines and so on and so forth, buying that physical thing and
27:17
so on and so forth. And so what's actually quite
27:20
interesting I think from that is, is that when we think about
27:23
the product, these these new services that we're offering,
27:28
effectively you've got the forward logistics, which is the
27:31
lovely supplier to the manufacturer or remanufacturer,
27:35
distributor, retailer, customer. But then we've also got the
27:38
reverse logistics which might be repair, refurbish, dismantle,
27:43
recycle and then back into the supplier.
27:47
Now what I find really useful to think about this is, is in the,
27:52
if you like the forward logistics, we're really talking
27:55
about value being cocreated. So it's the creation of value to
28:00
the customer. But the really important thing
28:03
then is, is the retention of value.
28:06
So that repair, refurbish, dismantle, recycle, it's
28:09
actually value being retained. And I think this is what many
28:13
companies are starting to see. If we go about this in the right
28:17
way, it's not this is a real opportunity for our businesses
28:22
rather than rather than something which is going to cost
28:25
us money, it's actually retaining value as we go back
28:29
through that. And we've just seen recent
28:30
announcements, haven't we, from Apple, for example, saying that
28:34
they, their watches now are 100% sort of 0 footprint in terms of
28:41
using recycled materials and this and the other and I noticed
28:44
that cobalt, which is, and I mean their batteries mixed up.
28:51
But anyway, they they're basically saying we're not,
28:55
we're not using recycled for the next generation of what we're
28:59
doing. So there we're starting to see
29:01
this value retention and I think that's a really positive way to
29:04
think about it. So we think about
29:06
sustainability. This is something about
29:09
retaining value. How do we retain value rather
29:13
than just Chuck it into the ground and forget about it,
29:16
retain that from what we're doing?
29:19
Yeah. I mean look you can't talk about
29:22
the the focus on sustainability without talking about the risk
29:26
to the planet, right. In, in the sense that that it's
29:30
something that we're trying to mitigate that future risk by
29:33
focusing on something that we know the scientifically is
29:38
proven that it's going to have an impact on us.
29:40
And so the more the circular economy sort of spreads out into
29:44
companies like Apple and and the the economy and and I think it
29:49
was the donut economy that talks about that circular economy with
29:54
people, profit and planet which is great.
29:56
But just going back on to risk and how you mitigate that, what
29:59
that looks like what what are your what are your thoughts on
30:02
that what what where does it start, what's the process of
30:05
where does it end. Okay well I mean in you know
30:09
simple terms we have to you we we're often having to start with
30:12
risk evaluation. And I I generally have three
30:16
useful questions to ask. How will this, the risk disrupt
30:20
our company and what is the potential financial impact on
30:24
the business. So that's a really important
30:26
thing financial risk happen. Yeah you know what is the
30:30
financial impact. Yeah.
30:32
The next thing is, is how long would we be exposed to the
30:35
disruption before it can be fixed And that's often another
30:39
really interesting thing. So risk is also time dependent
30:43
if it's something which. So for me, I had a new router in
30:47
my house on Monday and I thought, this is, this is a bit
30:52
risky. And I had a meeting that
30:53
afternoon and I warned everybody it could go down and everything
30:58
was up and running and I thought, this is great, this is
31:00
great, this is great. And then bang, everything just
31:03
disappeared for about, I don't know what was going on, some
31:06
sort of crazy update or something like that.
31:08
Anyway, it all dropped out. But how long for me to get
31:11
started again? Well, of course it's.
31:13
I had a bit of a plan, right? OK, let's make a mobile hotspot
31:17
with my phone. At least then I'll be able to
31:18
get back into the meeting and get on my laptop and all the
31:21
rest of it. So I know that that was quite a
31:24
short period of time. How long will be exposed before
31:28
it can be fixed? But then also what is the cost
31:31
of recovering from a destruction in terms of the emergency
31:34
actions we may need to take to fix things.
31:37
So it's it's one of those things that what is the cost.
31:42
So I'm going to have to what's the worst case, let's say it
31:45
didn't come back, what would I have to do?
31:47
Well, the cost for me in my simple example is I'm probably
31:51
going to have to go and get a, I don't know, one of these sort of
31:55
Wi-Fi modem type things which runs on 4G chip or something
31:59
like that. So I know that might cost me, I
32:03
don't know, £100, right, Yeah, but we have to ask those
32:06
questions. How will the risk disrupt our
32:09
company and what are the potential financial impact?
32:12
How long would we be exposed, Will we be exposed and then what
32:16
is the cost of recovering? And you see once we've done
32:19
that, we can go into analyzing our exposure.
32:22
And that is really it's it's the likelihood, how likely is this
32:26
going to happen, what is the impact, but also what is the
32:30
difficulty of detection. So if we think about some of the
32:33
risks we're having to deal with now cyber particularly somebody
32:35
could be sitting in your computer systems harvesting
32:39
credit card details for a long period of time.
32:41
It could be, it could take, it could be very difficult to
32:44
detect okay. And so we're able to great
32:47
scores which then focuses in on those really important things.
32:52
So you might say it's very low livelihood, very high impact,
32:57
but it's not really likely. But actually the difficulty of
32:59
detection is massive, massive. So hey, we need to think about
33:02
something around that. And then really what we then do
33:06
is we have to create what we call risk treatment plans.
33:09
And the risk treatment plan is very simply what is going to be
33:14
the risk treatment who is responsible.
33:17
And this is where many companies fall over.
33:18
They don't make anybody responsible for thinking through
33:21
this. What is the time frame?
33:23
Once again, we're back to time. Many people sort of think this
33:26
way to happen and then how will we monitor and review it.
33:30
And really there's, there's six key things we can do.
33:33
We can remove the risk completely.
33:36
We can change the likelihood of course, you might say, well
33:39
actually that thing there. What I'll do is I'll go with
33:41
another provider or another supplier, because then that
33:43
might make it less lightly. We can change the impact.
33:47
So one of the examples I use in my LinkedIn courses, we have a
33:52
we have a big party and we worry about drinks getting spilled all
33:55
over the floors. Well, what I can do to change
33:58
the impact is we just have like drinks mopping up stations which
34:02
all the family know about hidden around the house.
34:05
So if somebody you know drops a, we're on it within within a
34:10
fraction of a second changes the impact, we can share the risk,
34:16
can we share that with other supply chain partners And then
34:19
we might just make the decision we retain the risk.
34:22
At the end of the day, we're not going to be able to remove
34:23
everything we just say. We just got to retain that and
34:27
it might cost us whatever we'll retain it.
34:30
But also what we need to be able to do is increase the speed of
34:33
detection. So this goes back to all our
34:35
digitization analytics. I want to have back in this
34:38
monitoring and you know detection across the supply
34:42
chain. So by getting those things in
34:44
place and thinking through procure for resilience rather
34:49
than for cost, you should want thinking about that.
34:52
We've got to explore all shoring, near shoring, multi
34:56
shoring. As we've said, we have to think
34:58
about innovation. But really key to all this is
35:00
going back to relationships. As I said, supply chain
35:03
management, it's all about relationships, it's
35:05
collaboration along the supply chain.
35:07
Those companies which did really well, they collaborate really
35:10
well and that will actually help you mitigate a lot of the risks.
35:14
So we, we painted earlier on quite a bleak picture, but
35:18
actually there's a lot of things that we can simply do and if we
35:21
can get the culture right within our business with everybody
35:24
thinking about how will this impact the risk profile of the
35:28
slide chain, all of a sudden it's going to change things.
35:31
And what you know, I would love to happen is that everybody in a
35:36
business, it doesn't matter who you are, a receptionist or
35:39
somebody like that, they just have some understanding of
35:43
supply and risk. When we give everybody fire
35:45
extinguisher training and fire training and diving and
35:49
inclusivity training, well, hang on a minute, that's probably
35:54
less likely. Well, it might do.
35:56
Is it going to shut your business down?
35:58
Your supply chain is probably a higher risk and it could shut
36:01
your business down pretty quickly.
36:03
So let's actually all get focused around it.
36:06
I, I, I love it and and and I'm sure people are now going to be
36:08
going on to different search engines to try and find you and
36:12
that LinkedIn course. So where can I final thought So
36:16
thank you so much. Where can I find out more about
36:19
your your what you're thinking and what is the name of that
36:22
LinkedIn course. OK.
36:23
So the the LinkedIn course is a Supply Chain Fundamentals Risk
36:29
and Resilience. It's on LinkedIn Learning.
36:32
If you want to find me, you can go to richardwylding.info.
36:38
So I've got my own website and of course you'll find me on
36:41
LinkedIn as well, so you can use that.
36:46
And the last thing about LinkedIn is, I shouldn't be
36:49
saying this, but with LinkedIn learning, you can generally get
36:54
it comes with LinkedIn premium, but also many corporates have it
36:58
as part of their Microsoft agreement.
37:01
So yeah, so it's not like you might find your company already
37:06
gives you access to LinkedIn learning and you're able to do
37:10
it. And there's a great wealth of
37:11
stuff going on on there on the supply chain side as well, which
37:14
really can help introduce you. So a lot of universities now are
37:18
using the courses for prelearning and postlearning.
37:22
So students are actually going through this.
37:24
There's great opportunity but more importantly my goal is
37:28
challenging and inspiring business and supply chain
37:31
leaders to innovate. So what I want people to do is
37:34
go through these things and then take it into their world and
37:37
really innovate with it, create some value out of it.
37:41
I I I'm sure they will. And one thing I will ask is will
37:44
you come back in maybe three months or as we coming into 24
37:49
and just have another conversation about the the the
37:52
things that we should be focused on.
37:54
Because I think it's it's through conversation and having
37:57
things at top of mind we can impact and have an an impact on
38:00
culture, which is ultimately what what what we're trying to
38:03
do. So was that a yes, You'll come
38:05
back? Yes, it will be a pleasure.
38:06
It will be a pleasure to come back.
38:09
Thank you. Professor Wilder.
38:10
Thank you so much.