Top CEOs on how COVID exposed flaws in supply chain management
“The old tools are not very good,” said Baxter International CEO Joe Almeida during a Fortune Global Forum virtual conversation.
Yes, a lot of you um and most companies have who are digital first I put a lot of investment in Big data and analytics but of course you feed big data and analytics scenarios that are known in a situation where you're delivered one black swan after another. How did how did those tools, how did those big data tools stand up to so many disruptions? That came one after the other? It's low very slow. So when you have congestion imports, when you cannot get containers you've got to know what is in containers coming from all over the world. The old does not very good. Now the industry Came up with some very interesting new things going forward. We have it by caught us by surprise. So you replace that by by just brute force but a bunch of people working 18 hours a day trying to figure out where things are. So so um the the adaptation was very fast um but there was a shock. What we couldn't predict was how much the super, I think ravi and jim spot on the amount of supply chain disruption is much greater than people had anticipated because the rebound has been so enormous and I and I think we're gonna be talking about supply chain uh supply relationship just in time conversation becoming second with tertiary to having product available and the ability to also contain uh impacts on natural disaster that is coming just around the corner. For North America for instance, we're coming right by the the hurricane season. So a lot of changes have happened. There's much more to come because what happened in Swiss canal is just one very tip of the iceberg of where the world is in disruption uh for consumers. Yeah, jim I wonder if you would agree with me that um you know, the, to the extent we were using big data analytics, we were using it on smooth repeatable operations. As Robbie points out these last two decades have been focused on getting supply side economies of scale and low cost regions whoa. You know, now the rules just changed and the parameters constraints just changed. So we've got some adapting to do. But what I'm starting to see emerge is some new tech companies with a real focus on supply chain management. I mean this is a whole profession that I think was underrated by the public for sure and by many companies as well and and we know our supply chain and logistics teams are earning their keep right now. So so looking to see some new tools emerge that do much more of the risk based scenario analysis is going to be what we will need as leaders as we enter this new arrow with so much disruption and you know what One other thing I might add is I think not only do we need to look at the physical supply chain of products that were moving around the world, but I'm starting to wonder and I'm curious whether you all saw this some disruption even on the services side where we had created pools of low cost labor handling services from one region of the world and when they got hit with covid, they couldn't really step up to the performance level they had always delivered on. Do we need to be prepared for even service disruption in this new era?