Name: The Next Disruption is Coming—is Your Supply Chain Ready?
Uploaded: 2026-06-02
Duration: 20 min 15 s

Geopolitical volatility, climate change, and rapid technological transformation have turned 	supply chain management into a high-stakes discipline. Brittany Bagley of Axon and Raj Kumar of GXO Logistics operate amid these pressures every day—managing supply chains and logistics 	for customers around the world. While sourcing and assembling complex products, they’re also working to mitigate single-source dependencies on overseas suppliers. Hear how they've navigated everything from cargo ship fires to component shortages, and what COOs need to do now to create future-proof systems for when the next disruption arrives. 

Brittany Bagley, Chief Operating Officer and CFO, Axon
Moderator: Phil Wahba, Senior Writer, Leadership, Fortune; Co-Chair, Fortune COO Summit 

The Next Disruption is Coming—is Your Supply Chain Ready?

Conferences

Oh, good morning, uh, to everybody, and, uh, Brittany, hi, uh, Jackie, very, um, glad to have Jackie, a last minute addition to the program. So, um, you will be electrifying, I'm sure. Thanks for having me. Thank you. So, um, Between tariffs, the conflict in the Gulf, port strikes, quarantines, outbreaks, CEOs are busier than ever. What is keeping you the busiest these days in your role as an operator? Why don't we start with you, Brittany? Sure, um, I I think that everything you just listed is keeping everyone pretty busy. I think fundamentally the number of sort of challenges and crises that have been coming up has only accelerated. So, uh, you know whether or not it is. War, tariffs change every 10 minutes, um, component costs, memory costs, uh, there's just sort of one thing after the next, and then your business doesn't slow down either, so you have all of these supply chain challenges at the same time that the business is trying to run faster. than it's ever run, and there's not a lot of tolerance for supply chain being a reason you can't deliver, so you have to sort of figure out how to marry those two conflicting demands at the same time. Yeah, customers don't care. They just want you to ship to them, right? Exactly. Yeah. How about you, Jackie? What's keeping you busy these days? Yeah, first of all, um, we love the growth, so we have really very strong growth, um, especially in North America. Then from, you know, operation point of view, from supply chain point of view, really we need to ensure we can support this growth. Sometimes hyper growth, sometimes it's not really properly forecasted, or from supply chain point of view we need to really provide all this agility and flexibility to support the growth while ensure we can uh retain the margin, have the we call profitable growth. So this is the first thing, very, you know. Busy with our team so we can support growth. Second, you, you know, as, as head of supply chain, we want to also deliver the performance, the growth, the quality, the margin, but we want to also prepare long term, uh, transformation. So these days we talk a lot about AI. We are no different. We are also preparing a lot on AI to transform our culture, to develop all the competence on digital, on the AI. As we prepare foundation on the lean on the data quality so that really we can, you know, deploy the AI in an effective way that keep us busy both from performance but also from the transformation. Yeah, well, you know, we'll get to AI at some point in this panel, but just a little bit later. Let's talk a little bit about, um, a, a recent crisis that affected your supply chain and how you responded like, like an example. Won't you start, Brittany? Sure, um, I would say, uh, memory has been the most recent challenge, uh, you know, luckily for us we're a diversified business, so we have both software and hardware product lines. Uh, but the memory price increase has been unprecedented and how fast it has gone up and how difficult it has been to get supply, and I think we are lucky in that some of our hardware products are higher price point products and we've been able to absorb that so far, uh, but I think it's, it's really prohibitive for some businesses and some consumer businesses who just can't eat a 4X or a 6X increase in memory costs. Uh, so I think we're keeping a really close eye on that and what will happen if that continues to be supply constraints now. It's, it's a market. There's a supply demand balance. I think there's lots of conversations about more capacity going into the memory market, but none of that happens quickly because you all know it takes a while to ramp your capacity. So it's just how do you balance and how do you make those trade-offs between availability and cost while we're waiting for that to happen. But that's probably been our latest hot button topic. OK. And you're a CEO and a CFO, so how does being the CFO help you figure out how to navigate all. Yeah, um, it, it both helps and it's challenging because you often a CFO and COO have sort of conflicting goals, uh, but I think it allows us to really sort of take out some of the debate that might happen between the CFO and a COO ultimately if it's the right decision to go invest more in inventory or invest more in capacity we can make those decisions pretty quickly and pretty efficiently. Uh, because I get to both have the conversation about what inventory or what capacity we're doing and how are we going to budget for it, uh, so it, it helps streamline, I think, a lot of those conversations, uh, and I think it also really, it helps because ultimately I get to take off either one of those hats and sit a little higher and look across the business and really try to make the right strategic choice for the business rather than staying in a swim lane. And how about you, Jackie? Yeah, from my side I want to share one, I would say uh impact uh from supply chain and really resonate with me and I learn a lot and not really from day to day operation. But more from, you know, how we can do better from supply chain point of view, um, I guess all supply chain professionals experience very painful, challenging period during the COVID. So at that time I was leading the supply chain for one of the biggest divisions in Shinaida globally. Uh, the, the life was really miserable at that time, you know. So I remember one, case really resonates with me, and that is about, um, one shortages, you know, uh, a customer from Germany. Uh, they really escalate, call us, you know, want to get more, uh, product. Then I dig out it seems the business with this customer is very small, you know, uh, quantity is very small. Normally during those kind of supply chain disruptions, shortages, you want to prioritize big customer, big volume, right, big business. Then when I, when I further deep dive, actually it's not simple as that, uh, because this um company is producing the most sophisticated advanced uh automatic product line for the medicine treating the cancer. So they have kind of one product line cost millions sitting there because they are missing some of the products from Schneider cost maybe hundreds of bucks, right? And then more important is that those are the really treating the cancer, uh, patients life and death, especially during the COVID period. Then at the time, uh, I remember we discussed internally, of course, according to rule, normally you, you cannot allocate more to this customer. But at that time we decided that it's not made of money, it's made of life and death. So really prioritize them, put them in top priority. We work with them very closely, uh, on what they want when they want, and then they can ensure they can deliver to their customers, you know, those, you know, pharmaceutical companies producing the cancer treatment drugs. And after that, the customer really become very loyal to us, OK. So from that lesson I learned that, you know, supply, the impact of our supply chain to our supply much bigger, is much bigger than we thought and we need to really treat with empathy and also really think the issues of customers and the supply chain, the supply operation team can really win customer loyalty, not just, you know, on the cost of delivery but also really loyalty. Well, since Brittany brought up tariffs a little while ago, um, just a show of hands, who here's company is still dealing with liberation Day and the back and forth, um, show of hands if, if, uh, or, or on the contrary, have you gotten used to it? Has your company adjusted to it? How about you over there at, at, uh, at, at, well, I, you brought it up, but Brittany, so why don't you start? I mean, I would say probably both. I think we've gotten used to the fact that it is constantly changing, um, but we are still dealing with it, you know, it's, it's a lot of administrative overhead. Uh, we're going through a refund process right now which is great, right? The CFO part of me loves getting a refund, um, but there, there's just a lot of sort of work and overhead, and I think. That might be sort of a meta point which is all of these disruptions I think a lot of times the supply chain team makes it look easy they make it through it, but there's just so much more work and effort going in behind the scenes there's there's a real sort of load in the organization to make it look as smooth as it looks and deliver on it. OK, and how about you? I would say, um, tariff is one of just the disruption, um, in my view, the supply chain disruption has become now really constant. It's not like uh exodic really, you know, the politics, all this conflict as well the the demand of shock, um, are increasingly increasingly overlapping. So the disruption is not something rare event. It's very common and constant. And secondly is it become more um um I would say it's not like uh isolate case like before, before 2019 I remember most of the Disruption is like you feel like the isolated case but nowadays it's really the systematic, so meaning the impact really cross all the chain from sourcing to manufacturing to logistics as well as the delivery to customers. So to mitigate risk is very important really you you want design a supply chain uh with uh the resiliency with also all the network operating model you can really absorb the shock. Instead of just, you know, active firefighting after the fact. So talk about tariffs. What we did is really we defined the, you know, the, we look at the footprint footprint strategy, and then once we and we analyze real time the data, and then when we see, OK, this flow will have high tariffs, we can switch quickly to another flow. With much lower tariff or even no tariff, so that you know we can really, uh, because we cannot change the policy at the end of the day what we can do is really quick adapt and a quick wrap to it. And do you feel that um your companies have become more flexible and resilient because of all the chaos, to put it mildly in last year, or is it, I mean. Is it, is it just you all with Apaches? Yeah, as I said, I experienced all this, uh, you know, the, I would say disruption during COVID, um, uh, from 2020 to 2023, and now also, um, uh, I'm running North American supply chain. We, we learned a lot of lessons from those disruptions, um, and we really think about how we can, uh, move from active firefighting mode to really proactive. Uh, so what we need to really look at from, as I said, from really long term supply chain modeling and with supply chain also, um, design so that we can anticipate, uh, this kind of impact and we have the options and we call scenario planning. If something happens we can quickly analyze the different options we can pick the option we can decide very quickly. So, um, uh, um, so from supply chain point of view it's very important really to define the long term, um, supply chain strategy but also very important embed a new technology we talk about industrial 400, um, uh, really AI IOT, you know, these days we talk a lot about AI and also to have the, uh, those fundamental we call predictive maintenance, dynamic planning, as well as the end to end traceability so that we can, you can make your operation. More predictive and responsive. Then anything happens, you can really adjust and recalibrate real time sensing the impact and act on it real time. And Britney, did you guys change how, how and where you source? We, we did, um, I would say we have definitely put a premium on flexibility so I think a few years ago, maybe pre-COVID, there was sort of this view that the supply chain was really all about getting the lowest possible cost from, you know, where you sourced and how you set up your supply chain and now the investment to have it be flexible and resilient is absolutely worth it so having, you know, dual source. Suppliers rather than single source um having redundant facilities being over able to switch over, uh, just all across the supply chain I think there's just that value on investing behind flexibility rather than just optimizing for the lowest possible cost and so that's I think the biggest change that the team has really been executing on is how do we put that premium on flexibility so that when the next crisis hits that maybe we can't predict you can juggle things around you. Shuffle things around and still be OK. Yeah, I'll come to the audience with questions in a minute, but I remember hearing a year ago a lot of the apparel makers in particular were saying, oh well, we've diversified out of China now we're in Vietnam and Bangladesh, and companies that had been looking to diversify their sourcing before all the tariff madness were the ones that came out of it the best. So I'm guessing that that validates your point about being willing to. Pay a little more to be more flexible. I think so. I think and I'm, I'm sure Jackie's even more diversified than we are, but I think this idea that you'll be all in on one country is probably just not going to be true anymore. You need to have, you know, your facilities in different locations with, um, you know, different abilities to to flex and move as the geopolitical landscape changes. Any questions from the audience? OK, so we'll continue. So let's get back to AI. How, how AI helps you manage your, uh, supply chain. Why we start with you, Jackie? Yeah, this is a great question. Um, you know, this, uh, two days, um, I'm really listening to a lot of the great insight from, uh, the colleagues and the peers, um, inside the United we definitely we put AI is really strategic, uh, for not only for supply chain. But also for all the functions. So of course one hand we are supporting AI actually we are providing all the infrastructure for AI including the, you know, all energy infrastructure, but internally, um, our CEO make it very clear we won't really use AI massively. Take one example, um, we discussed this day is actually very interesting example because as I mentioned about the growth we really have. A very strong growth, um, uh, you know, in, in North America, but sometimes I'm, I'm joking with my friend, uh, my colleague, I say it's happy headache. Why? Because one hand, the growth is really super. We are talking about sometime, you know, double, right? At the same time it's very difficult to forecast. Because you know when you secure one customer, one order can be huge business. But if you lose it, uh, maybe you lose, you, you don't have that volume comes in right. So for the supply chain point of view it's really difficult to really, um, I would say, uh, to anticipate and forecast. Then the discussion we have internally say look we can spend. Thousands of hours to see how we can have accurate forecast and we can never maybe succeed on this environment. Why not we try something new? Why not we try, try AI? OK. So take example of planning we are now, um, deploying, um, piloting, I would say piloting human touch list, um, um, AI planning. So starting from the master data we use AI to clean the master data. To give us insight, OK, something wrong with this data, and this is the proposal to do clean the master data. Then after from the clear to build, sometimes we call the bomb, right, the clear the bill of material. So the AI can come up with the, the clear to build the bomb from joining. Then after the AI can cut order automatically to supply and follow up the order and expedite the order when it's needed, OK. So we are doing this, um. Pilot and the target really um moving from visibility le digital to human supervised um autonomy I would say. So a system can really can um detect the risk early signals of weak signal. Recommend actions then in really bounded cases it can really execute the change automatically with clear governance. OK, so we try to um um um try and pilot this once really works we want really deployed everywhere. Yeah. I mean I love that uh I would say we are very much in an experimentation phase from an AI standpoint so, uh, it's very much everybody has the AI tools and they get to try and experiment and figure out what works, um, so I'll, I'll shout out our EV of operations here Eric Hertz, who's in the audience who's really spearheading this for the team, uh, and the amount of creativity is amazing. So I would say it's everything from, uh, like internal reporting and document. Implementation because there's so much data that comes out of the team that the ability to sort of quickly spin that up and share it out and get real time information um that's a huge area we're leveraging AI it is now you need clean data and you need good data so that's uh I think that's coming into focus as a real challenge, um, but as you can get that clean good data your ability to visualize it, analyze it, share it, uh, is huge and hugely valuable across the supply chain. I think we're trying things in how we do our testing and validation. How can you use AI to, uh, do a great job simulating testing and validation and, uh, reduce the number of actual real world physical tests you have to use, which of course takes material. Um, I would say, uh, the team's really doing a great job, um, comparing. Uh, bombs and, uh, supply chain information and what we're getting from partners. So, you know, at the end of the day I think the common thread is anywhere you had a lot of manual analysis or you had a lot of data, uh, or you had an inability to do as many reps or tests as you wanted, that's all really ripe for AI and I would say that's a big area we're experimenting and, and seeing what works. And your um CFO um how does she feel about all this? Is she on board? Uh, my CFO loves AI uh, anything that takes people out of doing, uh, sort of tough manual work and gets them in a place where they have the data they need or their ability to. Actually think about strategy rather than just sitting there trying to get numbers right or getting the data visualization tool right, you know, I love all of that, um, and I would say, you know, token costs like we'll see what happens to token costs we're certainly keeping an eye on it, uh, but for now we're, I think we're getting enough ROI out of AI that it's absolutely worth it. Jackie Brittany, thank you so much for being with us this morning. Thank you for having me.