JSMJan22_SupplyChainTrends

In the past, a supply chain strategy would focus on long-term goals. But in an ever-changing world, these goals have shape-shifted into short-term aims and often have to change in situ. DR MYLES WAKEHAM and CARL WAKEHAM investigate how SCM education can be morphed in order to meet such threats.

The reality that nothing happens until such time that something is sold and purchased are truisms, and form the bases on which all economic activities, and particularly supply chain management (SCM), are built.

In essence, SCM and its logistics activities centre on derived demand; hence, if there is no marketing, there is little need for SCM in general and logistics in particular.

The COVID-19 pandemic and its current and future mutations/strains have demonstrated to the entire world how fragile Mother Earth has become, and even more importantly, how complex and volatile global markets are. Much has been written about the need for agility, waste reduction, sustainability and the need for effective and cost-efficient risk management, but how does an organisation implement such interventions in local, regional, national and global markets that are dominated by complexity, elongated supply chains, cultural nuances and market and supply chain uncertainty?

What makes matters worse is that whatever strategy one pursues today could be inappropriate tomorrow, as strategy formulation, implementation and control are like a hunter aiming a slingshot at a wild duck in full flight to bring down his next meal.

Shape shifting to the short-term

In other words, in the past a strategy would focus on long-term goals but in an ever-changing world, these goals have shape-shifted into short-term aims.

As the world economy relies on some form of certainty so risk may be better managed, many organisations are now forced to use a shotgun approach, hoping that through this time of turmoil, a single pellet might strike such moving target so that hopefully corporate objectives may be attained; in the short-term. Long-term objectives, once the foundation of business strategy, have become a pipedream because they might have to be changed in situ according to alternate market and macro environments.

So, with the above in mind and other threatening challenges as listed below, how can SCM education be morphed in order to meet such threats?

Our analysis in the table below will hopefully assist educational institutes to take on these challenges so their offerings reflect current and potential future realities as opposed to them being myopic by conforming to what is being offered today by other institutions at the expense of the needs of students, their future employers and most importantly, the much-hammered South African economy.

Table 1: Challenges and possible educational interventions

Prophesised potential SCM challenges Possible educational solutions (SCM interventions/subjects)
Advancement in technology Artificial Intelligence (AI), automation, blockchain technology and evolving management information systems (enterprise resources planning, warehouse management systems, and transport management systems etc.) impact on the entire organisation starting from marketing and ending when an offering reaches its final destination (and even beyond in the case of reverse logistics).

An important function of AI is to track consumer behaviour (what they buy, where they but it, how they pay for it and even what they would like to buy) and then plant seeds in the mind of the consumer by using singular targeted customer-specific promotions to market offerings. In many ways it has changed the consumer purchasing process by creating needs and wants instead of the personal identification of them.

As the above technology embeds even further in the lives of the consumer and users (retailers and business customers), so too will the behaviour of buyers likewise morph. Remember, as supply chains become more complex and elongated, so too will the need for technology and business processes to follow suite.

In a modern context, educational institutions such as high schools, colleges and universities will fail in their obligations to make students job-ready if they do not include the above in their respective curricula. This should go beyond technical training but should also include the provision of practical experience from the likes of SAP, Oracle, Sage and so on.

Demand management The management of demand is critical for any organisation as it dictates capacity and resource utilisation. Traditionally, this is based upon qualitative and quantitative forecasting methods. However, as consumer behaviour changes, with continuous shifts in market and macro environments, plus supply chain complexity and uncertainty, traditional methodologies do not offer the required accuracy.

By understanding AI, blockchain and MIS etc., students will be able to better forecast demand based upon more scientific and analytical approaches as opposed to the reliance of gutfeel and opinions in the form of qualitative forecasting techniques and the reliance of past data as per quantitative forecasting such averages, moving averages, weighted moving averages, exponential smoothing and so forth.

Demand management has its foundation in micro and macroeconomics and is a process that consists of forecasting, supply planning, demand analysis and sales and operations planning. Therefore, to be effective in demand management in a SCM context, it is important for educational institutions to incorporate in their curricula an understanding of the impact of demand management on business performance.

Students should understand techniques of setting up sales target, the facilitation of related sale target disaggregation skills, the comprehension of how to encourage the sales, marketing and customer to actively and collaboratively participate in the prediction process, an understanding of industry benchmarking and finally through real case studies, systematically grasp demand forecasting theory and practice.

Risk and disaster management COVID-19 and other pandemics, wars, insurrection and natural disasters have demonstrated to the globe that the modern world is fraught with risk and uncertainty. They have also shown how fragile and uncertain the modern world is. As supply chains become more complex and extended so too will risks increase in the form of supplier, supply, financial risks, scope of schedule, legal, environmental risks, socio-politics, project organisational and human behaviour risks (to name a few).

Educational institutions will fail in their obligations and responsibilities to their students if risk management (risk identification, assessment, profiling, intervention etc.,) are not included in their curricula. As importantly, should an unforeseen catastrophe occur, the curricula should include principles of disaster management and ethics, drivers of vulnerabilities, potential risks in the supply chain, policies and frameworks in disaster management and how technology such as AI, Internet of Things (IoT), Big Data and blockchain can help improve an organisation’s disaster response and relief capabilities.

Supply chain complexity As supply chains become more elongated, so will complexity increase. One needs to find solutions to managing a complex supply chain. This includes complexity avoidance, developing collaborative relationships inside and outside of the firm, using appropriate information technology, hiring and retaining a flexible workforce, ensuring supplier collaboration, having superior leadership within the organisation, having a sound understanding of the needs of the customer and suppliers and very importantly, ensuring simplicity is built in the design of the supply chain. Education institutions should include all these aspects in their curricula.
Supply chain sustainability Supply chain sustainability refers to an organisation’s purposeful efforts to consider the environmental and human impact of their products’ journey through the supply chain, from raw materials sourcing to production, storage, delivery and every transportation link in between.

Environment, social and governance (ESG) criteria are being used to measure an organisation’s performance beyond only revenue and profits. ESG is used to attract investors and customers.

Education for Sustainable Development (ESD) empowers students with the knowledge, skills, values and attitudes to address the interconnected global challenges the world is facing, including climate change, environmental degradation, loss of biodiversity, poverty and inequality. The module should include the interdependence between humans and the environment, the balance between the environment and society, sustainable life skills, respect for the planet, and future preparation and adaption to needs of the environment and the community.

Changes in consumer and business behaviour According to Newsweek (8 December 2021), the business landscape has significantly changed over the past year. While companies have come to expect that people’s needs will shift constantly based on changing life situations, the customers of 2021 are remarkably different from their predecessors. Increased online shopping options and new methods for connecting virtually are just a few examples of how technology has altered the ways in which customers live and work.

Though many businesses have been able to quickly adapt to meet the needs of modern consumers, the convenience and access that technology brings will be vital from now on. Leaders will need to keep a close eye on customer behaviour trends to ensure they are on top of the factors impacting the industry.

Educational institutions will be well advised to place special emphasis on their marketing offerings as a result of consumer behaviour changes… now and in the future.

Cybercrime Technology offers some incredible opportunities for the supply chain. AI could revolutionise robotic manufacturing and sorting, and use big data to identify and solve inefficiencies in processes. Automated vehicles could help to improve safe and efficient delivery of products, and reduce overall costs.

However, as new technology is introduced into the supply chain, cybercrime will continue to be one of the primary threats facing all businesses in the future. It is therefore important to know in what ways this could present itself, and how firms can best take steps to combat potential issues.

From an education point of view, very little is taught at universities and colleges about cybercrime and particularly how it can be minimised. As cybercrime impacts on all management functional areas in an organisation, it is important that not only security personnel be aware of and mitigates cybercrime but middle management as well. Modules could include an introduction to information and cyber security, the fundamentals of encryption techniques, fundamentals of digital forensics, introduction to malicious software, fundamentals of cyber security governance, fundamentals of enterprise security, threat detection and threat negation and management.

As can be seen above, educational institutions have a vital role to play to diminish the negative impacts of the above challenges. A practical approach is required in order for SCM challenges to be effectively managed.

 

The IMM Graduate School’s Dr Myles Wakeham is a motivated and well-connected academic and businessman who was instrumental in introducing and adopting CIPS at CPUT as a series of qualifications. He has consulted to a variety of institutions and organisations, such as the South African National Treasury, National, provincial and local government. He is also involved in international research, and with an academic consortium has researched the impact of IT on university education.

Carl Wakeham is a former marketing executive specialising in business and brand strategy. He is director of and shareholder in a marketing company based in Johannesburg and a founding member of the largest independent advertising network at that stage in Africa. He has worked throughout Africa, the Far East and Europe. Wakeham has a BA and MBA and has studied other business related fields. He remains actively involved in a digital media company.

 

Subscribe to stay informed whenever a new issue is published

Subscribe now