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The relationship between, and the importance of, a Value Chain; a Supply Chain and Supply Chain Management.

SUPPLY CHAIN

By Dr Myles Wakeham and Annie Beckerling

The recent outbreak of the Covid 19 pandemic has highlighted the importance of Supply Chain Management (SCM), as a sudden increase in demand for certain products and a complete standstill in demand for others has left many suppliers reeling. However the man in the street can still find it difficult to distinguishing the features that contrast a value chain, a supply chain and finally supply chain management (SCM).. Although there is a strong relation amongst these three activities, there are key differences that make them stand apart from one another.

Essentially, a value chain is a set of activities that a firm performs in order to deliver need-satisfying products or services to a defined market or markets. It is also known as a high-level model of how businesses receive inputs and then processes such inputs via the conversion process (operations) into finished goods and services. This is achieved by adding value to the inputs in such a way that the morphed final offerings will hopefully satiate varying customer needs, better than the competitor. The ultimate objectives of the value chain are the appeasement of both customer needs and wants (in the form of superior goods and services), and, as importantly, revenue and profits for the enterprise.

Created by Michael Porter in 1985, the value chain consists of primary and support activities. Primary activities include inbound logistics, operations, outbound logistics, marketing and sales, and service. The key goal of these activities is to create value that exceeds the cost of performing the activity, thereby generating higher organisational sales and profits. Support activities on the other hand comprise procurement, human resources, finance, technology development, and the firm’s infrastructure. These ancillary activities within Porter’s Value Chain, assist the primary activities by forming the foundation of the organization on which the primary activities operate. A support activity such as financial management for example is of great importance for primary activities as without finance, these activities cannot be performed. Likewise, without effective Human Resources Management, the organisation will not have the requisite human capital to produce the required goods and services, market them and finally distribute them to…

  • The right organisation.
  • At the right time they are need.
  • To the right person who will be using the goods; and
  • At the right price so that their delivery to the targeted end-customer via fellow supply partners will enjoy the value that the offering has been designed to deliver.

The strength that underpins Porter’s Value Chain Analysis is its approach, as it focuses on the customers as the central theme of the business rather than on departments or people. Being a system approach to operating a business, the system links other systems, people, departments and activities to one another and demonstrates how the approach impacts on value creation, costs and profits. Consequently, the analysis makes a clear picture of where the sources of value and loss of revenue can be found in the organisation.

The supply chain is the network of individuals, firms, technology and resources that are involved in the creation and distribution of offerings from the source of the inputs (raw materials, components and so on) via the distribution network to the final consumer. The main challenges of the supply chain, or better still the supply network, are the ever-changing needs of the consumer, its complexity (especially international supply chains), supply risk and as importantly supplier risk. The recent outbreak of the Covid 19 pandemic has underscored the importance of a smooth-running and seamless supply network as without it operating effective and efficiently, more people would have been struck down by the virus. This would have undoubtedly increased the morbidity and mortality rate throughout the world as well as the negative impact the outbreak has had on the global economy.

Supply chain management (SCM) is about creating value. Early efforts at managing supply chains often focused on cost reduction in order to make the chain leaner. Unfortunately, these efforts sometimes reduced the ability to create value thereby negating the key purpose of the supply chain. In essence, there is more to creating value through effective SCM than simply wrestling costs out of supply chain’s primary or support activities. Being an agile supply chain in a modern context, is probably more important than wrangling lower costs as it translates into quicker market entry and better customer service.

There should be value-creating activities that reinforce supply-partner and customer centrism. Because there can be many supply partners in the equation, managing supply chains requires a balancing act among competing and oftentimes self-serving interests. To illustrate this, note the following example. The seller of raw materials (supply chain inputs) would naturally like to enjoy the highest possible price he can muster from the manufacturer in order to maximise profits. The manufacturer on the other hand might probably demand to procure the goods at the lowest possible cost in order to be competitive in the marketplace after he has incurred the time and cost to produce the goods. It is these conflicting requirements that require supply partners to be flexible so that these opposing needs may be realize.

The above is underpinned by the advent of the recent Covid 19 virus and how the interest of supply partners can differ, even in a life-threatening emergency such as the pandemic. In the USA, where the outbreak has reached mammoth proportion, Federal and local governments competed for life-saving Personal Protective Equipment (PPE) hoping to procure such goods at the lowest possible prices. However, because of supply and demand issues, and pure unadulterated opportunism, sellers put up the prices of their PPE goods to exorbitant levels in order to maximise profits at the expense of the people who were ill and dying in hospitals and old age homes. The sad reality is that there was no cohesion and coordination on a macro scale regarding to the procurement and delivery of such essential equipment, apparel and medication. Instead of Federal Government (central government) acting as the catalyst for the acquisition of such goods and services, it competed against states and hospitals, thereby increasing the cost and delaying the delivery of the imported life-saving offerings from Europe and the East.

SCM can be defined as the design, planning, execution, control, and monitoring of supply chain management systems, with the objective of generating value by synchronizing supply with demand and measuring performance on an international basis. Where once it was considered to be a philosophy, in today’s terms it has become an essential business activity that is designed to ensure the delivery of superior value-add services so that all the players in the chain may benefit there from.

The supply chain, not only links organizations e.g. suppliers, producers, and customers. It produces upstream and downstream flows, which move products, information and payment (cash) out of and into organisations.

The value chain however integrates a variety of supply chain activities throughout the product/service life cycle; from the marketing function determining customer needs and wants, operations converting inputs into goods and services and finally to outbound logistics, which consists of order processing, warehousing and distribution. The main intent of a value chain is to increase the value of a product or service as it passes through stages of development and distribution before reaching the end user. So, through effective supply chain mapping and streaming, organisations in the supply network can accurately direct their mutual efforts at providing value-add services to the next-in-line customer. The above hopefully illustrates the relationship of the three critical business activities, their relevance and as importantly how they provide value to all the members of the network, including the end consumer.

Names, like sticks and stones, can hurt you. Just ask Corona — the beer, not the virus.

Corona Beer

The coronavirus is currently a trending topic and a major public health hazard worldwide. But at the same time, it is also not doing the Mexican beer brand of the same name any good. Being linked to something like the corona virus is something you absolutely do not want as a brand. The name corona virus comes from the Latin word corona, meaning crown or halo. Under an electron microscope, the image of the virus is reminiscent of a solar corona.

In a recent article published by nytimes.com (2020) the following statement was made – Grupo Modelo’s Corona beer drew attention about a month ago after consumers mistakenly associated it with the fast-spreading Corona virus, which by that point had already begun its global march. Corona has become the subject of memes and videos shared on social media as the toll from the virus climbs worldwide. Reports of an increase in online searches for “corona beer virus” and “beer coronavirus” show the Mexican beer hasn’t been able to escape the association.

Even if the vast majority of people aren’t making the association, there still could be damage to the brand’s goodwill just because of the similar names. Trademark attorney and founder of Gerben Law Firm, Josh Gerben, notes: “The vast majority don’t think they’re tied. But you don’t know what the subliminal messaging is here.”

One must ask the question – Who is to Blame? If anyone is to blame for turning a perfectly good word meaning crown into a modern synonym for a deadly virus, it’s the scientists in the late 1960s who decided that the protrusions on the virus they were examining under a microscope looked rather like the bright gaseous ring visible around the sun during an eclipse. One thing is for sure – the word that will emerge from the current crisis battered and vilified beyond all recognition is most certainly corona.

As we can imagine Corona beer is potentially facing a PR nightmare. But they’re not the first. Other brands have felt the pain of homonymy too, for example:

  • a soda called Sars – marketed in Taiwan
  • a chocolate called Isis (in fact a pharmaceutical company and a wallet app have been called Isis as well)
  • Golden Gaytime is an Australian ice cream bar. Their slogan: “It’s hard to have a Gaytime on your own.”
  • An appetite suppressant candy called Ayds – “Ayds helps you take-off weight and helps you keep it off.”

It also does not help that Corona, like Ayds, seems to have an ill-chosen tag line. In case Ayds didn’t already remind you of AIDS, the motto “Ayds helps you take- off weight” drove the point home. Likewise, Corona’s pitch for its new “hard seltzer” flavours is: “coming ashore soon.”

The name Corona is now on everybody’s lips. And in marketing terms, that is never NOT an opportunity. In other words, should Corona leverage the negative attention and spin it in a positive way?

Times change. In the case of brands there’s simply too much value built into a successful name. But that can change overnight, if world events overtake the marketing department.

So what does a million dollar brand like Corona do? Some products have tried to shed their old names and start a new life:

  • The Belgian Isis brand chocolate bar changed its name to Libeert.
  • The Isis pharmaceutical company changed its name to Ionis.
  • The Isis Wallet app changed its name to Softcard.
  • Ayds ultimately changed its name to Diet Ayds — but it was not an appreciable improvement. That brand disappeared from shelves.

Corona is, of course, a bigger brand than any of these. The most likely course — and possibly the best one — for them is to wait it out.

“You sit still and wait for the storm to pass” said advertising legend Harvey Gabor, who’s been through this. Richard Nixon had a great line. “The memory of the average American is one week. Just sit tight”

Trademark professionals would advise to keep an eye on the way the name is being used and ensure against issues of dilution or disrepute in the marketplace. It’s important to make sure that no other brand is being opportunistic to use their name in combination with the virus to tarnish the brand. It’s unlikely that another beer brand would take such a serious global situation as an opportunity for a cheap advertising pot-shot, but the lines of parody can be blurry and it’s not unfeasible that the beer’s name could be implied with a relation to the virus. The brand will want to keep an eye on media mentions of the virus that don’t clearly distinguish between the beer brand’s name. Were coronavirus to start being written about without the ‘virus’ suffix, then Corona would need to act.

Is It OK to Make Coronavirus Memes and Jokes? Humour can relieve anxiety; it can also stoke tensions or spread misinformation. So, the answer isn’t simple. In fact, a South China Morning Post article details some of the memes that have already spread around the internet relating the beer brand to the deadly virus. One picture shows a bottle of Corona placed opposite a group of Heineken bottles with a facemask covering them. While it isn’t exactly a PR crisis, this obviously isn’t a situation that Corona’s PR and marketing teams want to be in. That’s not to say it can’t be turned into an opportunity, despite the tricky connotations. And herein lies the lesson: This is a great case study in making the most of difficult circumstances.

It’s also an important reminder to have an action plan in place so that your organisation is prepared to deal with any bad press that comes its way.

The brand will want to keep an eye on media mentions of the virus that don’t clearly distinguish between the beer brand’s name.  In fact, Corona may be able to increase its brand reputation – provided that any attempts are not read as cynical and opportunistic. This could help build some equity in your brand in otherwise unfortunate circumstances.

If AB InBev (Belgium owners) don’t keep engaging with the Corona beer stakeholders, others in the media fill the vacuum. It also leaves the door wide open for speculation and innuendo.

At the end of the day it is evident that the beverage has nothing to do with the coronavirus, but it may be an ideal opportunity to turn negative association into positive by offering even just a fraction of their marketing spend, for example, to helping mitigate the spread of the disease. Just imagine all the goodwill and free press this will bring about…

So then what do you do if your service or product, and ultimately your brand, are on the receiving end of widespread negative social media attention?

  • Be Proactive – be decisive yet thoughtful in your response — a brand’s reaction can mean the difference between a classy recovery and fanning the unwelcome flames
  • Respond with Speed – An organisation’s survival in a crisis, depends enormously on the speed of its responses.
  • Continued Strategic Engagement – The lack of engagement inevitably raises concerns about how transparent the company has been in handling this crisis
  • Plan and Prepare – As soon as you realise your brand is going viral for the wrong reasons, commission real-time social research to uncover the hotspots of heated criticism
  • Anticipate and adapt – The better you have anticipated the possible scenarios, the more prepared you are and the more confident you will be in implementing the changes
  • Apologise if need be
  • Take action and stay connected
  • Adjust your marketing strategy – Brands need to adjust their media investments based on the moods and expectations of consumers.

This is not a time for the Corona marketing team to panic or for that matter any other marketing team that is faced with the challenges of today. Don’t throw your brand into a continuous stream of frantic tactics. A frantic response is not the way to build a powerful and resilient brand. It’s a time to focus on the purpose of the brand.

Businesses that are aligned behind a compelling purpose will inspire their employees, connect with their consumers, and earn love and loyalty that will persevere in times of change and times of hardship.

And ultimately ensuring the longevity of the brand.

Digitising Higher Education 

Digitising Higher Education 

Lessons shared by an institution that has been doing it for a while. 

1. Introduction 

The role of learning and teaching in a digital environment has been catapulted into the spotlight as  many educational institutions which have not paid much attention to it, are now grappling with where to start to put systems in place or brush up on their neglected or under-utilised learning management systems. The now clichéd expression ‘the new normal’ holds true for higher education as well. Digital education as part of a blended learning mode of delivery, is here to stay, has been waiting in the wings and is now coming into its own. Higher education can never go back to what was, nor relegate digital education to the dark recesses of educational minds again. The definition of mode of delivery needs to be overhauled and redefined.

Over the past number of years having been digitizing our programmes and drawing on technology to augment our learning and teaching activities, we have learnt many valuable lessons. Perhaps these lessons will assist those struggling to attune their thoughts to digital conversions of their learning programmes as turning digital is much more than putting webinars on a server and a must for education into the future as our clients in higher education are mostly digital natives who have never known a world without technology.

2. Lessons we have learnt. 

Here are some lessons we have had the luxury of time, to learn.

2.1 Educational Principles in Learning and Teaching in Virtual Space 

Learning and Teaching principles and theories must underpin the strategies which inform the digitization of educational programmes to achieve successful learning and teaching in the digital space. Cognitive theories indicate that student performance is linked to how learning is structured. Designing your digital education space cannot be a haphazard knee jerk reaction to a crisis and be left that way. It is imperative to bear in mind how students structure knowledge and to develop learning and teaching in the digital space in line with how students structure knowledge. Gagne, Wagner, Golas & Keller’s (2004) nine levels of learning, also relevant in a virtual world, should be a good starting point to consider in the design of instruction.

Digital education lends itself very well to the creation of individual learning pathways, which is a buzzword for future education, and blended learning which has been around in education for some time. Individual learning pathways meets the individual learning needs of students through a variety of methods, and the various types of blended learning which is a combination of teaching methodologies including contact and digital, synchronized and asynchronous online teaching combinations, remote access to classrooms, among others.

2.2 Questions to Consider

A number of questions need to be considered. What research will support your decision to include or exclude features in your design, e.g. a theory developed by Garrison, Anderson and Archer (2000) which still holds true today, discusses the 3 presences which should be evident in the virtual module. One of these is the social presence. How will you ensure that you have a sound social presence bearing in mind that many South African Students are field dependent learners? The cognitive styles of Field Dependent (FD) and Field Independent(FI) learners must be catered for in the design of digital learning spaces. Simplistically stated, FD learners have a strong need for structure and teacher guidance, whereas FI learners prefer a measure of autonomy. What will you do to reduce the anxieties of FD students especially if compounded by a lack of online learning experience?

What resources need to be included and why. How do resources need to be included? How does the lecturer increase their social presence in the module? How can a discussion forum increase opportunities for communication on the learning content, between lecturer and student? Is there a need for synchronized or asynchronous tutorials or both and what would be the frequency of such tutorials? How would all these resources integrate to create a coherent whole in the digital education space rather than be a cluster of uncoordinated learning resources? What teaching methodologies will be adopted? How skilled and experienced are teaching staff, in online learning and teaching?

2.2.1 Lecturer Skills and Student Centred Learning in the Digital Education Space 

Education in the 21st century needs to be student centred whether in a physical or virtual classroom. Lecturing to a passive group of students is teacher centred and not conducive to the inculcation of higher order thinking skills. The combination of lecturing in a synchronized or asynchronous tutorial and students who are field dependent, is a recipe for ineffective learning and teaching. At higher education level, the responsibility of the institution is to develop critical thinking and problem solving abilities in their students, not just focus on content. Lecturers that have been compelled in this difficult time, to turn to online webinars should consider what teaching methods to use to encourage participation. Tutorials which are purely in lecture mode are least effective.

It is not a given that someone who is an experienced teacher or lecturer, will know how to conduct online learning and teaching. Many of our academics are from a generation a couple of times removed from the generations we find at higher education institutions at the present time. The chasm between those lecturers and students who effortlessly navigate through the elearning space and those who struggle with basic computer literacy is significant.

The reality is that many lecturers and students have little experience of online learning and teaching and frequently try to transfer the contact classroom methodologies to the online classroom. As mentioned, the danger is that real learning does not take place, real learning in the sense of teaching students higher order thinking and problem solving as part of their mastery of the learning content. The lecturer will need to think about and understand the link between effective teaching in a digital environment far removed from their students on the one hand, and the nurturing of higher order thinking among their students.

Then there are the peripheral aspects to bear in mind, such as how you introduce the tutorial. So many, forget a simple principle such as providing students with the objectives of the tutorial. Will the background behind the lecturer be a distraction? Duration of the tutorial is an important factor. Too long and students lose focus. Too short and students feel hard done by. Poor lighting and students can’t see the speaker’s face and they comment on that. Preventing disruptions such as pets, children and others interrupting the tutorial is another small but important aspect to consider.

The above suggest that there is a need to do ongoing skills training among teaching staff and evaluation of the quality of teaching. How do you train lecturers? Ongoing skills development sessions in virtual space, allows teaching staff to attend via their computer or cell phone or view recordings of training sessions. Teaching staff should also be given a voice through a dedicated discussion forum. How does one maintain the sense of community among the academic community of the institution? Create a dedicated space on the learning management system which will serve as their virtual meeting room.

2.2.2 Student Responsibilities in the Learning and Teaching Process 

How do you get students to participate in a tutorial, whether synchronized or asynchronous? We have learnt that few students participate in the live sessions and we have speculated, surveyed and read about the reasons for this. A couple of these reasons include, the time scheduled for tutorials, and students being reluctant to prepare for the tutorial where they may be required to participate. We have found that most students prefer to view the recordings.

Students who view recordings of lecturers view them passively and are disinclined to engage with learning content. How would you try to engage students even when no student has pitched up to the etutorial? How do you design your etutorial to encourage critical thinking and problem solving? How  will you assist your students to engage with learning content as they work through it?

What role will continuous assessment play in encouraging students to actively engage with learning content? In this day and age of immediacy, providing students with immediate feedback to short continuous assessment activities is an effective way for them to gauge how well they are achieving the module outcomes and provides them with immediate feedback and incentive to progress through the learning content.

2.2.3 Guidance to students 

Students too, need training on how to navigate the learning management system and how to respond to activities set for them. Short ‘how to’ clips placed strategically in relevant spaces in the digital module, providing clear instructions on how to use specific areas in the module can easily be produced with simple software such as screencast or other such software. This kind of guidance goes a long way to making students feel more secure and providing them with the direction they need.

2.2.4 Keeping in touch with your clients aka students 

The management of communication is key in the digital environment. In the physical space, information is often conveyed through students and staff sharing information incidentally during the course of their interaction within the physical space. Non-verbal cues assist in understanding the messages conveyed. This provides a context for the information. In virtual space, however, these incidental and non-verbal cues are often reduced or lost. There needs to be a balance between flooding students with information, on the one hand, and ensuring that everyone has all the information they need. The more balanced the dissemination of information is, the fewer questions born out of confusion, frustration, or insecurity, are generated, but without overwhelming students with information.

What communication strategy will you put in place to keep both teaching and support staff and all importantly, students, informed yet avoiding cluttering their mailboxes? What processes and digital means will you use to ensure that you are listening to your students and what they need? A number of strategies to be considered may include the following: Strategically timed announcements  keep students informed of changes, new developments and any other information they need to be cognizant of. Information and question and answer sessions, in virtual space between faculty and students, help students feel part of a community and that they concerns are heard.

Consider how you can integrate various social media , such as facebook, whatsapp, Linkedin and others, into the communication strategy. Slack and Team are further vehicles for communication and collaboration, which will no doubt enhance the field dependent student’s learning experience.

A strong student support department with dedicated well informed support staff assisting students timeously with queries is a vital component in assisting students with all kinds of queries. A dedicated communication channel, which is continually monitored, for students to query technical aspects, e.g. unable to upload an assignment on the learner management system, assists in reducing frustration and anxiety among students. A key component is the turnaround time for responses to student queries.

2.3 Technical aspects 

The choice of learning management system will be decided by what the needs of the institution, are. Will it be outsourced or maintained by the institution? What security features are built into the system? Will the management system be flexible enough to ‘bend’ and adapt to your learners’ specific needs without necessarily calling in the expertise of outside service providers, which will only serve to increase costs and force you to be dependent on them for any changes. Open source learner management systems are just as good if not better than many of the smaller, lesser known ones which have not been around for long and which may not always have the variety of features which the larger ones do. One also needs to ensure that you are certain of the longevity of the learning management system which you select. Will they be around in 20 years? Does their track record show that they are in tune with cutting edge developments in digital education? Are they constantly upgrading their features in line with the needs of the education? What is their support like?

Does the learning management system offer a mobile and desktop app version, which are imperative as there are very large disparities of access to technology and data accessibility among students. These apps often serve as a lifeline to those students who are in outlying areas as they provide students with offline access to their learning materials and uploading of assessments via smart phones and desktop apps.

Accessibility, privacy and security are all extremely important aspects to consider when selecting any software in education. Will you need to provide data to assist disadvantaged students to download the app on their smart phones?

’Traffic’ on the learning management system, provides valuable information and identifies students who are not visiting the learning material or visiting too infrequently. Data provided by the learner management system provides important information about students at risk, and allows teaching staff to be proactive rather than reactive through timeous interventions.

The choice of software for synchronous and asynchronous tutorials will depend on the purpose for which you need it. What security measures are there to ensure your tutorials won’t get hacked? Does the software company respond to the tightening of security features? From a learning and teaching point of view, does the software include a whiteboard feature? Can you share your screen? Does the software record videos, which you included in your tutorial? Does it have a chat feature? Can you conduct polls during the tutorial? Can students write on the whiteboard should you require of them to do so?

How does the uploading of interactive content impact on server capacity? How will your server cope if all your students access the online module at the same time to upload an assignment?

2.4 Other skills required in the development and maintenance of the digital education space 

Digital education is not only the domain of the academic. Apart from the academic input into the digital development of the module, consider the opinions of those who are more attuned to the marketing side of your learning management system. Other vital input from departments such as IT and administration contribute to the creation of coherent digital education space. These teams need to collaborate on a regular basis. Work closely with the IT department on server related issues especially when you introduce multi-media and other software such as plugins into your digital education space. How can administrative processes be adapted for greater automation? Listen to student observations. Is the learning management system, user friendly, i.e. is it easy to navigate? Is the space visually pleasing so that students want to visit the site and find it easy to find their way around it?

3. Conclusion 

Technology can enhance the facilitation of learning and teaching or hinder it. The secret in thorough planning in order to keep things simple, to keep your finger on the pulse of the dynamic nature of students’ needs in conjunction with best practice in online learning and teaching and adapt when necessary.

List of Sources 

Gagne R, Wagner W, Golas K, & Keller J, 2004, Principles of Instructional Design, (5th ed), Cengage Learning Inc.

Garrison, D. Anderson, T. & Archer, W. 2000, Critical Inquiry in a Text-Based Environment: Computer Conferencing in Higher Education. The Internet and Higher Education, 2, 87-105.

Martin M & Godonoga A, 2020, SDG 4 – Policies for Flexible Learning Pathways in Higher Education Taking Stock of Good Practices Internationally, UNESCO, International Institution for Educational Planning, https://unesdoc.unesco.org/ark:/48223/pf0000372817 Downloaded 24 April 2020

Q & A with IMM Graduate School – Leaders in technology-enabled education

No matter who, when or where you are, we are always open for you

Resilience. It’s a very apt word to describe South Africans and the same can be said about the businesses, organisations, and institutions that keep this great country of ours moving.

In the past few months, and even before that, IMM Graduate School has shown not only resilience, but also how much they care about their students and the success they will achieve. They’ve gone more than the extra mile. Years of constant innovation and drive to do better for their students have lead to IMM becoming front-runners in technology-enabled education, and during our age of Covid-19, it has proven to be exactly what their students need.

We had a quick chat with Charmaine du Plessis, Chief Marketing Officer at IMM, to find out how they’re supporting their students during Covid-19 and their recently launched BCom in International Supply Chain Management.

1.Please tell us a little bit about IMM Graduate School

IMM has been around since 1960, and for the slightly older generation, we are the ‘household name’ for marketing qualifications. We currently offer 10 qualifications across higher certificates, diplomas, degrees, and postgrad. Our areas of expertise are marketing, business, and supply chain.

Focusing specifically on our marketing degree, these qualifications are fairly business-based, hence the BBA or BCom designation. The implication of this is that our curricula include modules such as financial management, business management, statistics, and a reasonable amount of quantitative work. Of course, the core theoretical marketing modules are in place, as well as various, very interesting, ‘applied’ marketing modules as you get to 2nd and 3rd year.

IMM is predominantly an online/distance/digital provider of qualifications. We have students from all over. There are almost 1 000 in Zimbabwe, but we also have various students in places such as the UK, Australia, India, and China. Our courses, content, and delivery model are set up to be able to support students remotely, which is ideal right now as you can imagine.

We also provide face-to-face tutorials for students who require additional help or prefer the discipline associated with a formal class schedule. Our largest Student Support Centre is in Stellenbosch, where we have over 500 students.

IMM Study

We like to define ourselves along 3 key dimensions:

  • Best-in-class qualifications: We have been offering degrees for many years, and we continually update. Many of the core principles remain constant but the case studies and applications are updated regularly.
  • Compelling delivery: We are probably the most flexible institution in terms of learning style. Simple yet compelling study guides, live and recorded webinars, digital interactive content, and face-to-face tutorials. We try to cater to all the various requirements and study styles.
  • Empathetic student support: This aspect is often overlooked by online education providers (in my opinion) and it is probably the biggest ‘gap’ between a traditional face-to-face university experience and online. Online is anonymous and it is difficult for lecturers to know when students are struggling. Because of this, we have implemented a series of interventions – not least of which is our help desk – where we are able to answer students’ questions within 15 minutes (during working hours) and slightly longer after hours. If you are to study remotely, this is a very important aspect to consider in any provider.

2. Covid-19 has changed the business landscape immeasurably. What steps will you take in the coming months to support your students?

Since 26 March, the IMM has been working non-stop to ensure that our students’ academic journey remains uninterrupted. Our various teams have not only been keeping the ‘engine going’ from home but are actually developing new products, content, platforms, and systems to make sure that our students look back at this semester as a successful experience and one that continues to push them toward their career objectives.

Our CEO, Dalein van Zyl, has been emailing students regular updates on all the important tweaks and changes to this semester’s schedule, emphasising some of the important items:

  • Assignments: Our assignment submission processes are ‘tried and tested’ and fully digital, or in other words, can be completed and submitted remotely, but the submission deadlines for most modules have been extended to allow a bit more flexibility for our students.
  • Examinations (Final Assessment): We decided to mitigate ongoing social distancing policies, so we have redesigned all the exams to allow for remote completion and submission. We’ve also put together memos and videos to help our students prepare and write an Open Book Assessment. The exam/final assessment schedule has also been tweaked and pushed out by 1 week.
  • Student support: Through our committed staff and our digital platforms, we have continued to provide support to our students almost 24/7.

Catherine-quote

3. Please share with us one of the courses you’re most excited about.

We recently launched our BCom International Supply Chain Management. It is an extremely relevant and interesting qualification that prepares students for the complex global trade and supply chain management sector. If you consider the most disruptive industries, as well as interesting businesses, it is not easy to ignore Amazon, one of the most valuable companies in the world. This qualification was mapped against industry standards and needs in order to develop skills that are job and industry relevant.

4. What are you looking forward to when it comes to the future of IMM Graduate School?

IMM Graduate School is at the forefront of technology-enabled education in South Africa. We have invested hugely over the last few years in systems and processes, and the result is a best-in-class combination of technology-enabled functionality with a human touch or support. We are able to offer our qualifications anywhere in the world and support students with equal intensity notwithstanding their location. At the same time, our talented and highly skilled faculty ensure that our curricula remain relevant to both graduates and future employers alike.

Source:

by . Q & A with IMM Graduate School – Leaders in technology-enabled education, Job Mail.  Available here.  [Accessed on 25 May 2020]

Euromonitor International: How is Covid-19 affecting the Top 10 Global Consumer Trends in 2020

Euromonitor International- How is Covid-19 affecting the Top 10 Global Consumer Trends in 2020 web

It is May 2020.  Students of the IMM Graduate School are busy writing their Final Assessments, not in a traditional examination venue, but rather on a computer, possibly at home.  Now, in the midst of the coronavirus lockdown, the world has no idea how long the coronavirus will directly and indirectly affect us.  What we do however know is that every individual, every company and every institution, has indeed been affected by the coronavirus in some way or another.

In this regard, Euromonitor International, a London based independent provider of strategic marketing research, did a comprehensive study to forecast how Covid-19 will possibly affect consumer trends over the medium to long term.  To accomplish this, Euromonitor International re-analysed the 10 global consumer behaviour trends it identified for 2020, prior to the outbreak of the coronavirus pandemic.  The objective was to potentially predict consumer behaviour once life return to (the new) normal.  Below is a summary of the findings:

Trend 1: Beyond Human

 According to Euromonitor (2020), prior to the outbreak of the coronavirus consumers looked at technology, including Artificial Intelligence (AI) and robots to take over certain human functions.  Using a robot will certainly be welcomed by many families in completing mundane tasks such as washing dishes, ironing and even making a good cup of coffee.  Companies were investigating how AI can be used in their long term strategies to improve efficiencies.

But now, during the pandemic, people are either in quarantine or lockdown, some choosing self-isolation.  This has led to a need for contactless services and technology.  There has been a rise in the selling of voice controlled technology, the use of chatbots (to obtain information) and the demand in smart speakers and – household devices.

Companies are now investing in robotic automation for example in some medical sectors.  Walmart, is using robots to clean its floors.  As people are increasingly becoming comfortable to use robots, robots are going to move from a novelty item to an essential item.

Example: Meituan Diaping (China) 

Meituan Diaping, in Beijing, China, is a leading food delivery company.  Since February 2020, it has been using autonomous vehicles to deliver its foods.  Even though this was technology that the company was developing pre coronavirus, the pandemic forced Meituan Diaping to implement the technology sooner than originally anticipated.  Their no-contact delivery has allowed it to respond to consumer demands firstly, but it also addresses environmental issues, as the vehicles ease traffic congestion and the electric cars are more environmentally friendly than normal fuel-operated cars.

 

Trend 2: Catch me in seconds 

Through the internet and digital technology, consumers were used to receiving more content in less time.  People were not interested in reading long-winded advertising messages.  They were seeking personalised, authentic and appealing messages and communication channels.  The consumers were expecting brands to identify the most useful content for them.  They needed brands to reassure, to provide engaging narratives, and consumers therefore demanded short, speedy and multisensory messages.

Now, amidst the virus pandemic, social distancing and fewer face-to-face interactions have become part of our day-to-day lives.  Consumers are worried by the virus and its implications.  They are distracted by the merging of work-, home – and play life, all in the same physical space.  When reaching out to consumers now, brands must rather be reassuring and supportive, as opposed to selling a product.  Brands must show what they are doing to fight the virus and improve public health.  Consumers want to be engaged and have fun with brands in these difficult times.

Companies would need to be agile and relevant to engage with people who are preoccupied and scared.  This will place them in a good position post lockdown.  The world is possibly going to face the worst recession ever, consumers are going to be extra careful on where they spend their money. Brands that were proactive during the lockdown will possibly stand out and be favoured above those that that did not engage in positive ways with their audiences.

Example: Giffgaff (UK)

Giffgaff is a mobile telephone network.  The company launched an advertising campaign called ‘putting community first’ with the objective of providing people with the means to be there for each other and be able to share, through a mobile virtual network.  Giffgaff went further to provide consumers with information and tips on how to deal with isolation and mental health concerns.  Its focus on people rather than product or services allowed the company to build positive brand associations. 

Trend 3: Frictionless mobility

People had the freedom to move around in congested cities.  This has, in developed economies at least, shifted the consumer’s mind-set from ownership of some form of transport to access of transport.  People had the freedom to move around and used apps and technology to access transport and pay for transport tickets.

The coronavirus has stalled this mind-set – people movement is limited and people are vigilant and cautious when it comes to mobility.  People have moved away from sharing transport due to the inherent health risks, and in some cases are starting to use their owned transport again.  There has been an uptake in cycling again – in Germany pop-up cycle lanes have been created, specifically designed to have enough space to allow for social distancing amongst cyclists.

Whilst consumers will slowly start resurfacing once the worst of the epidemic is over, flexible working hours will be more of the norm.  Over the longer term, frictionless mobility will still be important, but maybe not to the extent as pre covid, i.e. rush hour traffic may be something of the past or at least the intensity of rush hour will be substantially reduced.  Companies should be looking at investing into alternative sustainable solution, which include the removing or limitations of health threats that transport sharing brings about.

 

Example: Wheels (US)

Wheels, an electric bike start-up company, suffered huge losses due to the contamination scare.  Wheels partnered with Nanoceptic, a company manufacturing self-cleaning service products.   Nanoceptic develop a skin on scooters’ bike handles which continuously self-cleans.  This allows Wheels to safely redeploy their fleet of scooters, and to adjust rental pricing plans for better deals with regular users.

The bottom line is that companies need to actively limit any health threats to their consumers. 

Trend 4: Inclusive for all 

Consumers were demanding that companies develop products and services that are accessible to all people, including those with physical or mental disabilities.  Consumers wanted brands, products or marketing initiative which make inclusivity the foundation of their business – companies had to embrace people with disabilities, and actively try to understand the needs of such consumers.  Business had to enable fully immersive opportunities for everyone.

Now, with the Covid 19 virus in full swing, this trend has become even stronger.  Anxiety levels are high, especially for disabled people as they tend to have lower immune systems which makes their risk of catching the virus even more pronounced.  Disabled people also requires carers, which makes social distancing impossible in some cases.  It has become even more important for disabled people to have access to information.  As the general public has a better understanding of the disabled’s world due to themselves being in isolation or lockdown, there has been an increase in community spirit.  People are investing their own time in helping such people and putting pressure on companies to do more.

Disabled people, on the other hand, benefit from technology, for example, a greater ability to access virtual reality.   Online communications enable more people to interact virtually and participate in a variety of activities.  This certainly helps people with mental health problems as well as physical disabilities.

Example: UNESO World Heritage (Machu Piccu)

UNESCO, with their immersive virtual tours, allows all people, including those with physical disabilities, to access Machu Piccu in Peru.  It allows viewers to really get a feel for the greatness of the site.  Uvisit, the platform that UNESCO uses, enables any business to set up a virtual tour or event, allowing it to reach new audiences. 

Trend 5: Minding myself

People were focused on mental wellbeing, including preventing the physiological effects of stress, worry and sleeplessness.  Traditional stimulants such as alcohol and tobacco was used by practicing so-called ‘responsible stimulation’.  Companies provided products and services enhancing mental wellbeing.

It has now become a matter of rebalancing, of creating a new normal.  People need to manage their anxieties, therefore consumer behaviour will focus on self-care.  Now, during Covid 19, people are secluded, and many are living in fear of the unknown and even claustrophobia due to living with family with no outlet for physical and/or mental space.  People need to learn to live in the new state of unprecedented normality.  As there are higher levels of anxiety levels due to the lockdown, people are using products and services that helped them manage their feelings and handle the severe emotional and physical situations.  Herbal products and legal cannabis products are in higher demand.  Social networks are used to fill the gap left by lockdown and social distancing.  The uptake on relaxation and medication apps have increased.

Even after the dust of the coronavirus has settled, mental health will remain a focus.  Consumption patterns will focus on the ‘self’ and good mental and physical health products will be in demand.

Example: Mindhope (Spain)

Mindhope provides mental health services.  The company started a new therapy platform which connects consumers with psychologist.  The platform also facilitates online appointment bookings, and is very easy to use.  People who are already struggling can therefore easily cope with the use of the technology.

In general, mental wellness orientated solutions will become increasingly important as Covid-19 has already demonstrated its huge impact on physical and mental health – the ease of use and accessibility for all are key success ingredient.

Trend 6: Multifunctional homes

With the advent and growth of the coronavirus spread, people started cocooning themselves – home became a shelter from uncertainty.  Businesses are actively exploring and implementing remote working and the world has seen a rise in the use of technology to make it easier to work, shop and play from home.

Now home equals the office.  People are socialising in virtual space.  Social media has replaced people’s previous social gatherings.  Every day has become casual Friday as people are working in casual clothes from home.

School going children of all ages have moved online and people attend gym -, cooking -, and other classes online.  People are now celebrating birthdays both alone and online.  Consumers are using online platforms less to promote themselves, as in the past, but rather to stay connected with others.  Livestream and video chats are increasingly being used by all.

Euromonitor (2020) predicts that the transition from home as the hub is here to stay.  It may not be to the extreme that it is during the lockdown, but working from home will certainly become a greater reality.  Consumers will furthermore change their at-home-habits – more working from home and more casual dressing will become the norm.  Virtual lifestyles will run parallel with physical activities and – lifestyles when the world ‘comes out’ again.

Example:  Zoom (US)

Zoom is a communications technology company.   It provides functionality for companies, groups and individuals to create and attend virtual meetings.  These services are offered free of charge to schools in some countries.  It has become a social platform where people do remote video chatting, share drinks, do quizzes and party.

Companies need to invest in technology and other equipment to facilitate employees to effectively work from home. 

Trend 7: Private personalisation

Early in 2020 consumers wanted to received tailored products and services.  But there was a general hesitancy in providing personal information due to fears of who has access to data and how will such personal data be used.  Business was forced to heavily invest in secure data collection methods in order to ensure privacy.

Now, people are more worried about the virus and more prepared to share data in the name of public health.  Privacy concerns are put on hold in the short term.  There will be a widespread increase in online ordering and payments, also amongst older people who tended to shy away from this previously, not trusting online shopping.  Online shopping has become a necessity and is not a choice anymore.  Companies would need to make privacy messages clear, especially for new audiences.  Companies would furthermore need to review how they communicate to customers on the benefits of sharing personal data.

Example: Sentinel Health Care (US)

Sentinel is a health tech start-up that monitors consumers’ health remotely.  It has launched a fever tracker application, enabled from a wireless thermometer, that sends real-time updates about an individuals’ health to healthcare systems, healthcare providers and so on.  Sentinel identified a gap in the market which they were able to leverage by engaging with healthcare professionals to provide a personal solution that appeals to consumers’ desires to have a health monitor join the crisis.  But consumers realised that they need to share personal data in order to be able to use Sentinel’s application.  The benefits of sharing personal data, in this instance, far outweighed general fears of the potential mismanagement of data. 

Trend 8: Proudly local going global

Consumers want products that both have both a local and national flavour.  Covid-19 has catapulted this localisation.  Consumers are searching for both national and local products and brands that highlights their local cultures, social norms, and traditional habits. Niche brands rode this wave by accentuating the localness of brands as part of their global marketing strategies.  Businesses started increasingly to focus on local suppliers as borders were closed, whilst multinationals increasingly localised their overall operations.  The virus has created a sense of ‘getting through this together’ through local business and communities support.

Post coronavirus consumers’ fear of contagion will still be strong enough to drive demand for local products.  Local producers would need to provide stock and make the products that consumers want.  Supply chains will become more transparent as consumers will want to know where their products are sourced.  There will be a continued support of local business.  The expected recessions after Covid- 19 will force multinational companies to invest even further in local manufacturing and supply chain services to provide more local products.

Example: Withies Delicatessen (UK)

Withies is a delicatessen in Somerset, United Kingdom, that offers local produce.  With the outbreak of Covid, Withies started offering a new delivery service of freshly baked products to anxious or self-isolated consumers.  Companies that adapt and introduce new services or products secure future trust and loyalty from consumers.  In addition, they are expanding their reach to new consumers. 

Trend 9: Reuse revolutionaries

Ethical consumers wanted a waste free future where products lasted longer and less waste was produced.  Previously legislation surrounding the use of plastic shopping bags have changed in many countries, ranging from the banning of plastic bags under certain circumstances, to the consumer having to pay for plastic shopping backs in other.  Such changes had led to the sharing and reuse of plastic in general.  This trend lessened through Covid as people were afraid to touch products previously used, even if cleaned. There was a temporary move back to single use – and disposable products and staying healthy and safety.

Now, brands need to rethink – it is more about being clean than being green, as anxiety has moved consumer’s focus to health and safety.  Over the medium term consumers will be worrying more about reinfection than green products.

But over the long term sustainability will still remain high on consumer’s agenda.   Consumers will slowly return to sharing, reusing, renting and refilling.  Companies will still need to embrace the reuse trend and educate consumers about the safety of reusable options.  This will include clear instructions on how to reuse and recycle to avoid the spread of the virus.

Example: Refill APP (UK)

Refill APP allows consumers to refill their water bottles from a tap at specific points in the United Kingdom, free of charge.  Water is generally found from either fountains or businesses which provide clean drinking water to the public.  But now, with the close of many companies, Refill App’s listing has changed.  For those companies, however, that can continue to safely provide drinking water, Refill still provides their locations on the app, but with an included message on health and hygiene.

Trend 10: We want clean air everywhere

Younger generations have increasingly raised concerns on air quality and demanded companies reduce emissions to provide these generations with a sustainable future.  Awareness of air pollution impacted where consumers travelled and ate.  Consumers favoured brands that were doing something about air quality.  Companies globally continued to look towards technology to fight pollution.

Limited travel due to the coronavirus had a reversing effect on climate change.  Furthermore, there is less room for eco-anxiety.  Rather, the focus will shift to indoor pollution, where people will be anxious about their own health, and cleaning, washing hands, disinfecting things and so on will continue.  As the lockdown loosens, consumers will refocus on sustainable living to the advantage of both people and the planet.  There will be a combined focus on both the prevention of air pollution as well as being clean as the impact of pollution on people with respiratory problems will increase respiratory viral infection.

Consumers will seek solutions against pollution and require companies to actively innovate in their drive to prevent pollution.

Example: BYD (China)

BYD is the biggest electric vehicle manufacturer in China.  With the coronavirus epidemic, BYD adjusted its production lines to supply face marks and hand sanitisers, to the volumes of five million face marks and 300 00 bottles of hand sanitisers produced per day.  The switching of BYD’s production to manufacture protective equipment captured consumers’ hearts.  Companies such as BYD may, post lockdown, be ahead in terms of consumer goodwill relative to companies who did not similar things during the virus spread.

In summary:

As per Euromonitor International (2020), the coronavirus has to a greater or lesser degree, impacted all the pre-identified consumer trends for 2020:

  • The trends ‘multifunctional homes’, ‘beyond human’, ‘minding myself’, ‘proudly local’, ‘going global’ and ‘inclusive for all’ experienced an immediate spike as a result of the virus. This was followed by a long term shift in consumer behaviour relating to these trends.
  • ‘Catch me in seconds’ experienced an immediate spike but is expected to follow its pre-covid patterns.
  • ‘We want clean air everywhere’ has not changed, but may be even more pronounced due to the correlation between poor air quality, the coronavirus and respiratory problems.
  • ‘Frictionless mobility’, ‘reuse revolutionaries’ and ‘private personalisation’ were trends that saw an immediate drop but which will expectedly recover after normalisation.

The key take-aways from this research conducted by Euromonitor (2020) are:

Currently, both consumers and business are dealing with extreme disruption, necessitating the need for rapid adaption.  Brands need to be repurposed as being useful, helpful and supportive.

In the near term people and companies should use this time effectively to do tasks that they have not had time to do before.  Planning should focus on returning to a new normal.

In the long term companies will be forced to reshape their future strategy planning, build in flexibility, prepare for multiple scenarios and possibilities and overall embrace technology. 

Source:

Angus, A (2020). How is COVID-19 affecting the top 10 global consumer trends 2020?, webinar file in How is COVID-19 affecting the top 10 global consumer trends 2020?, Euromonitor International.  Available here.  [Accessed on 15 May 2020]

Coronavirus and the end of the global supply chain

Coronavirus and the end of global supply chains
Coffee illustrates how complex supply chains have become ©MAURO PIMENTEL/AFP/Getty Images

Posted by Paul Simpson

Coronavirus has shown how fragile our cost-driven, just-in-time processes really are. With practitioners adapting to survive while planning more resilient systems for the future, will procurement ever be the same?

When the first container ship arriving from China at the port of Vancouver was cancelled in January this year, it didn’t seem particularly significant. By mid-March, when China’s struggle with Covid-19, aka coronavirus, had become so all-consuming that 30 more journeys had been cancelled, Vancouver’s port officials were facing a crisis of historic magnitude.

That consumer goods weren’t being unloaded from China as per the schedule was less of a concern than the fact that Canada, which usually filled those containers with lentils and peas, had two months’ worth of crops stuck in port (historically, roughly a third of Canada’s crops have been exported in containers). Imports were also disrupted: one local food company had to pay a premium for spices from Thailand which arrived a month behind schedule. Brazil’s coffee makers suffered too as the missing containers made it hard for them to ship their products to China.

The problems of countries and companies along just one shipping route indicate why some economists, notably Simon MacAdam at consultancy Capital Economics, are predicting a 20% dip in trade volumes this year. That is significantly worse than the last recession in 2009, when volumes fell by 13%.

The bottlenecks in Vancouver did not grab headlines in the same way as various countries’ difficulties in speeding up production of ventilator kits. But as Professor Tim Benton, research director of the Chatham House think tank’s energy, environment and resources programme, says, they remind us: “We have created a global supply chain that, for all its financial efficiencies, has very little resilience.”

Coffee is a case in point. One industry estimate, cited by The Economist, suggests that 29 companies across 18 countries need to collaborate to make “one humble cup”. That may, Benton observes, work financially for the companies concerned – and for consumers who can buy their favourite brand at a lower cost – but it cannot, in any true sense of the word, be described as efficient. A hurricane, strike or outbreak of coronavirus at any of those 29 companies could severely disrupt the supply chain, and the spread of the virus into Latin America has already led to huge spikes in commodity prices as buyers anticipate lockdowns and shuttered businesses. And that’s without the kind of surge in consumer demand that led to a rise of more than 20% in British supermarket sales during March 2020.

 

p18 Corona Virus map page

All those photographs of empty shelves, explicitly condemning shoppers for panic buying and hoarding, obscure the fact, Benton says, that governments are hoarding too. “Kazakhstan banned exports of wheat flour, Thailand has stopped exporting eggs, Vietnam has suspended rice exports and Russia is talking about limiting grain exports to protect supplies,” he says. “It’s not clear how many more governments will follow suit, but if they keep putting their nation first, the
situation can only get worse.” Protectionist policies, coupled with panic buying, could create a self-perpetuating cycle of rising food prices.

What many analysts referred to as the “hidden costs of globalisation” were becoming visible even before the pandemic struck. “There was a clear sense that we had reached peak globalisation,” says Andrew Missingham, the co-founder of creative management consultancy B+A. “The political shocks of 2016, protectionist trade policies and climate change were already asking fundamental questions about that model.” Some of the foundations which businesses took for granted no longer exist in a pandemic age. “If you look at a business like ours, for example, it was predicated on three factors – the internet, cheap flights and free movement of people – and two of those no longer apply,” says Missingham.

Since the last global economic crisis in 2007-2008, many parts of the procurement profession have performed Herculean labours, protecting profits, companies and jobs by cutting billions of dollars in cost from the world’s supply chains. They did that, primarily, by seeking out places where they could make things at the lowest cost – often in China – and minimising inventory by applying lean manufacturing or ‘just-in-time’ principles.

The result is a global supply chain that is interconnected, intricate and sometimes unfathomable. As Duncan Brock, group director, CIPS, says: “The interwoven nature of modern supply chains means it is almost impossible to say for certain just how reliant we are on China for manufacturing and assembly.” Companies that placed such trust in Chinese suppliers that they used single-sourcing now face severe disruption.

Diverse sourcing strategies

“One key lesson from the pandemic is the importance of spreading the risk,” says Tim Lawrence, supply chain expert at PA Consulting. “Companies should avoid clustering suppliers in one region and around similar supply chains, reconsider whether it makes sense to create isolated supply chains and understand the location risks in every tier of the supply chain. Your supply chain may not be as diverse as you like to think – for example, your alternative suppliers may themselves be reliant on tier 3 or tier 4 suppliers in the same region.”

The obvious, if laborious, way to avoid such problems is to map your supply chain. “It isn’t easy,” admits Lawrence.

“It took Airbus five years to do it with the A320 passenger aircraft. And supply chains change so fast that the map might be out of date on the day you complete it, but digital technologies – especially 5G, data analytics and artificial intelligence – are proving increasingly helpful. They can improve visibility and connectivity, generate early warnings, and help free up supply chain leaders to focus on the strategic issues.”

Strategic questions would include assessing when it makes sense to keep the supply chain within the business. “There are certain components that are so critical to the business that the most secure supply chain might be to vertically integrate them,” says Lawrence.

As global supply chains hit bottlenecks many neither envisaged or expected, Missingham predicts: “We will see a lot more decentralisation, regionalisation and localisation.” Some pundits have talked of a ‘great reset’, where reshoring becomes the new norm. In an increasingly automated workplace, labour costs are no longer as critical when locating factories. Last year, multinational toolmaker Stanley Black & Decker shifted production of its Craftsman tools from China to Fort Worth, Texas, without increasing costs.

Brock expects new sourcing strategies to emerge but warns that any ‘reset’ will take time: “This may be the last straw for global sourcing as supply chain managers look local but, to put this in context, 290 of Apple’s 800 suppliers are based in China so such a strategy would take years to implement.”

Diversifying a supplier base is not always straightforward. Companies may be required, Brock says, to form alliances within their sector to develop new sources of supply where choice is limited or existing suppliers are clustered in the same region. Unilever has opted to protect the suppliers it already has, announcing a £420m cashflow relief scheme to expedite payments to SMEs in its network and offering credit to small retailers.

Learning just in time

Just-in-time manufacturing – reducing inventories to 15-30 days of stock or even less – has been a multi-billion-dollar boon for the global economy. Lawrence does not foresee a wholesale rejection of just-in-time or lean, but a reappraisal based on a more realistic assessment of the potential cost to the business: “There will be certain components and materials where you decide that it is more efficient, in the broad sense, to have six to eight weeks’ stock than three or four.”

Popularised by Robert Hall in his 1987 book Zero Inventories, the just-in-time philosophy always sat uncomfortably alongside procurement’s cautious ‘just in case’ approach to buying inventory. Dazzled by the savings, many companies ignored the fact just-in-time made it much harder for procurement to understand how extensive, responsive and opaque supply chains really were. This truth came home in February when a South Carolina hospital ran out of surgical gowns. Its traditional supplier in China had contamination concerns over its stock – not related to coronavirus – but when managers tried to buy replacements, with the pandemic escalating, they struggled.

But in the middle of a crisis this severe, there is also a temptation to overestimate how profoundly our behaviour as individuals, companies and organisations will change. The 2007-2008 depression signalled, as so many people forecast at the time, the end of the road for a certain type of free market capitalism. It seemed a reasonable proposition at the time but it didn’t work out that way. The idea of getting back to ‘business as usual’ can induce a certain complacency.

In this crisis, many managers – not just in procurement – will argue that nobody could have seen this coming. That is true, up to a point. Nobody could have predicted how quickly and radically Covid-19 would change the way we live and work. Yet, for those companies which were paying attention, the signs were there to be interpreted.

The US grocery chain H-E-B began monitoring what was happening in China in the second week of January. After two weeks of analysing various sourcing reports and maintaining close, constant contact with companies in China, the retailer redrafted the disaster plans it had used for the swine flu outbreak in 2009 and Hurricane Harvey in 2017 to confront coronavirus.

As Craig Boyan, H-E-B’s president, told Texas Monthly: “Chinese retailers sent some pretty thorough information about the early days of the outbreak, how that affected grocery retail, how employees were addressing sanitisation and social distancing, how quarantine affected the supply chain, how shopping behaviour changed and what steps they wished they’d taken to get ahead earlier in the cycle.”

Using that information, H-E-B promptly took various steps: forming a remote working committee to coordinate policy and actions, reducing opening hours to give more time to put product on shelves, rationing certain product purchases and paying local beer distributors to bring eggs to its stores. Even so, Boyan admits, they did not resolve every challenge: “We’re still struggling to get eggs and we still have a hard time understanding why toilet rolls were the first things to go out of stock.”

Planning to fail

If the coronavirus is a black swan event, there is an obvious temptation to plan on the basis that it will never happen again – or at least not in our working lives. The call of the next quarter’s targets can often sound more compelling, but Lawrence says supply chain leaders need to change their mindset. “It is easy to focus on the small things that happen often, or may come up in the next three to six months, and plan scenarios for those, but to be honest you could delegate that task to the technology. As this pandemic shows, it would pay companies to look at the really big things that don’t happen very often and run scenarios for those.”

Understanding risk is partly about what supply chain leaders know but also, Missingham says, about what they do with what they know: “People working in supply chains are, in my experience, real experts in the people, challenges and opportunities they face – be that individual components or particular raw materials. The problem is that that knowledge is too narrowly held within organisations. In future, one of the important jobs for supply chain specialists will be to educate a broader part of the business.”

Covid-19 has shed an unforgiving light on every flaw in the world’s supply chain. The pandemic has shut factories, stalled shipments, fuelled labour shortages, closed borders and will, the United Nations estimates, cost the global economy at least $1trn. “In times of crisis and uncertainty, it is hard for businesses to plan but supply chain managers who act now and keep a close eye on such data as the purchasing managers indices as they make plans can mitigate the damage,” says Brock.

Yet in future, when supply chain leaders have the breathing space to think, let alone plan, for the long term, they might conclude that prevention is the best form of mitigation. Companies which neglect the opportunity to fundamentally rethink their supply chains do so at their own peril.

That is especially true, Benton argues, when it comes to defining a more sustainable, healthy and environmentally friendly food production system.

As he says: “The question is not ‘will it happen?’ The question is ‘when will it happen?’ We could have started to create a sustainable, equitable and nutritious food system in 2003, after the outbreak of SARS. It could happen now or it could happen in 10 years’ time when the next crisis occurs, but for the sake of our health, and the health of our planet, it cannot not happen.” What goes for the food industry, you suspect, goes for the other sectors of the global economy.

Article originally published on https://www.cips.org/supply-management/analysis/2020/april/the-end-of-the-global-supply-chain/