Katharina Cavano l Palladium - Dec 20 2022
It's 2023 and Everyone's Talking About Supply Chain Management

Supply chains haven’t always been in their current spotlight. What was once a technical mechanism toiling in the background to enable our daily lives is now a topic of dinner conversation and perhaps more importantly, top of mind for executives around the world.

According to Dan Rhodes, Palladium’s Head of Supply Chain Management, this shift of attention both within organisations and externally amongst the public has meant an increase in leadership commitment and financial investment for improving supply chain capabilities overall. “In the recent past, supply chain management was largely behind the scenes, rather than the focus for many organisations, which meant that the progress toward improving them happened slowly and incrementally,” he says. “But because there have been so many problems with supply chain resilience recently, there’s a renewed interest in bolstering the people, processes, and readiness for disruptions, which is exciting for the industry.”

What will this mean for supply chains in 2023?

According to Rhodes, adopting new and more advanced technology, seeking a higher degree of process maturity and automation, and expanding the diversity of analytical tools will allow for more integration of supply chain functions within any business or sector. “This will continue to force organisations to more deeply understand the ecosystems within which they work so that they can better serve their customers.”

Rhodes shares the example of an international organisation or NGO working within the public healthcare sector. If their product or service aims to support last mile clinics, they need to spend more time with clinicians to understand the product availability challenges they face, what medications are needed and when, and the interdependencies that are occurring upstream of the clinic to truly improve the clinic’s overall functioning. In that case, supply chain data could even feed into how doctors prescribe therapeutic regimens, shifting from a 2-week supply to multi-month scripting.

“Supply chain management, if married or working closely with core business functions, can become a major value add that makes those functions or services better, especially if you’re using the data at hand to do so.”
He sees this as an emerging opportunity in the industry – leveraging supply chain data to enhance overall services delivery and improve customer satisfaction.

“It’s not an easy thing to do,” he cautions. ”"It requires robust data sets and data that are usually siloed from core business functions, but there’s immense value in that data as long as we’re able to translate and contextualise it.” Getting there will mean integrating supply chain data with business functions and working with historical data and data scientists to create insights that will, at the end of the day, improve the end product and better meet the needs of those receiving it.

While many organisations are doubling down on investments in supply chain technology, a one-size fits all approach will not work everywhere. Adopting flexible technology and having the ability to leverage it within different countries and operating contexts will be critical in the coming months and years.

“We’re finally bringing supply chain technologies up to where the rest of the tech world is, but realistically right now, it is built to work best in the West and in high income countries,” Rhodes adds. “It may not work in the same ways in low and middle-income countries where the infrastructure isn’t there yet.”

This doesn’t mean that these areas of the world should be forgotten. In Africa where populations and a middle class are growing, there’s an increasing importance for businesses to change their approach to working on the continent. “Many African countries continue to face infrastructure, technology, and marketplace monopolisation challenges,” Rhodes explains. “Regional and global organisations must adopt a stakeholder view and ensure that small and medium sized local enterprises have the capacity to adopt new supply chain tech, that warehousers and distributors improve practices, and that their involvement in local markets enables healthy competition rather than distorting it.”

“If you’re not doing that, especially as a global company seeking to maintain or grow your service offerings on the continent, you will fail because you must rely on local networks and businesses in these high touch, very contextualised locations.”

Doing so is not only good for business but could provide the opportunity to support low and middle-income countries to leapfrog technologies and build up sustainable long-term capacity more quickly to meet the more economically advanced countries where they are now.

It’s safe to say that global supply chains will continue to face disruptions, big and small. Now that much of the world has seen and understands the consequences of sustained disruptions, Rhodes says that it’s an opportunity to improve not just technology and data use, but how businesses and organisations interact with and integrate supply chain management into core business functions.

The challenge, he says, is how organisations will keep up with supply chain trends while retaining the agility to thrive within emerging contexts where people are diversifying and where the markets and the needs continue to grow.

Read 'CFOs Have Entered the Corporate Sustainability Conversation (And Other ESG Trends in 2023)' and contact info@theaplladiumgroup.com for more information.