Be honest, how has the coronavirus pandemic changed you? 

For most of us, it is only now – more than 18 months after the pandemic hit and as some semblance of normality returns – that we finally have the headspace to reflect properly on this question, answer it truthfully and inspect the mental scars, having been in survival mode for so very long.

Spare a thought, then, for business leaders who, alongside any personal struggles, have been forced to steer their organisations out of choppy waters while faced with cascades of disruption.

The list includes supply chain problems, geopolitical issues, increased pressure to recruit and retain top talent in the so-called ‘great resignation’ age, and the need to engage with a range of stakeholders to facilitate an accelerated digital transformation. They don’t teach this stuff at business school and many will have felt out of their depth, understandably.

The torrents of chaos have eroded everyone to a degree. And businesses and laggard leaders who have not kept up with the waves of change have, alas, been swept away. The response to Covid-19 necessitated the locking down of people, but paradoxically it opened minds. As a result, in the post-pandemic wash-up, the world looks and feels different. 

For instance, videoconferencing technology’s rapid advancement or adoption has enabled businesses to communicate to colleagues and customers, and somehow brought people closer together. Moreover, there is something thrillingly democratising about everyone having the same-size square box on Zoom, Teams or Google Meet, whether a chief executive or a 21 year-old, fresh out of university.

New normal: mindset change required

Cybersecurity and global warming have leapfrogged other concerns for boards and consumers alike. At the time of COP26, ‘ESG strategy’ have become business buzzwords, while actions and transparency speak louder than words. And as many are focused on the environment and governance, is the social element the squeezed middle?

As we tip toe hopefully out of the worst of the coronavirus crisis, leaders have many important questions to answer. How will hybrid working actually work? What business models need evolving or binning? And, most fundamentally, in a world of constant change, how can greater agility and resilience be achieved?

“The US military phrase vuca – an acronym for volatility, uncertainty, complexity and ambiguity – captures the world in which we now operate,” says Alan Patefield-Smith, chief information officer of insurers Admiral Group. “Everyone has their favourite worry.”

Paul Szumilewicz, programme director for retail in continental Europe at HSBC, bristles at the concept of ‘resilience.’ He says: “What I’ve seen in the last few years, especially during the pandemic, is that ‘resilience’ is overrated. Too often, we have unrealistic expectations of people and particularly leaders.”

The most essential leadership trait of the 21st century, without a doubt, is empathy

Szumilewicz argues that admitting “we don’t know the answer, but we are working on it” shows strength. “There is a positive shift in leaders to accept that being vulnerable makes us more real, more relatable,” he says.

According to a 2017 Harvard Business Review paper: “The single biggest factor that triggers oxytocin [a hormone that plays a role in social bonding] in the brain at work is when a leader, manager or colleague shows vulnerability. Resilience is sometimes not as powerful as we think. Being honest about that can have an even more powerful impact.”

Invest in technology but don’t forget people

Simon Finch, supply chain director at Harrods, concedes that “there was a lot of scrambling around to make things work” when the coronavirus crisis and, more recently, Brexit fallout exposed operational weaknesses. He posits that businesses were “obsessed with making supply chains as lean as possible” before Covid, moving items around quickly, with minimal stock and expense. 

“Coronavirus completely screwed up that approach,” says Finch. “From now on, the supply chain must be more about agility, to cope with volatility and uncertainty, and less about being lean. However, that agility has to be fully supported by technology and data insights.” 

Technology alone, though, is not enough. If leaders fail to invest in their people, and that includes themselves, then the much-maligned skills gap will gape even wider. Consider the World Economic Forum estimates that technology will subsume 85m human jobs and 97m new roles will be created in just the next four years. As man, woman and machine work together, leaders should become less robotic and more human.

Indeed, according to Wayne Clarke, founding partner of the Global Growth Institute: "The most essential leadership trait of the 21st century, without a doubt, is empathy. The leaders with the most emotional intelligence will stand out. To better engage staff and improve the employee experience, the most critical question to ask is ‘How do you feel?’”

So go on, be honest.

Since March 2020, the volatile combination of the coronavirus crisis, geopolitical complications, and the Suez Canal blockage has badly exposed the fragility of global supply chains. Many organisations are still paying a heavy price for the disruption. As a result, some have boosted their investment in technology to achieve clearer end-to-end visibility of their supply chains and better navigate future problems. 

However, while tech-powered transparency enables greater agility, resilience and sustainability, and data-hungry artificial intelligence algorithms provide real-time solutions to potential issues, business leaders must invest just as much in their people. Indeed, the people, processes and technology methodology, which has been around since the 1960s, has never been more relevant.

A surprisingly large majority of businesses do not yet have a complete picture of their supply chain. Those who began their digital transformation journeys before the Covid-19 chaos are ahead of the pack. But even those who move now can gain a competitive advantage.

The direction of travel is clear. Driving transparency is a win-win; not only does it identify potential stock concerns or delays and other possible disruptions before they become critical, it also improves efficiencies and sustainability at a time when consumers expect higher standards of ethics.

Technologies including AI can go beyond where the human eye can see. And with the right staff training and processes, tech paves the way for quicker, better-quality decision-making. Leaders must look further than short-term solutions and grasp this opportunity to embrace technology to manage future crises more smoothly.

Those with progressive mindsets have realised they urgently require better process control to handle the next waves of disruption. Ultimately, to triumph in the future, most businesses need an organisational transformation from the traditional management of the supply chain. 

Analyse, redefine and transform to achieve a future state of excellence

To thrive in this new digital era, leaders can’t look back and must create proactive, aligned strategies that propel growth. At Oliver Wight, we have identified three key steps to reset business processes. Organisations can evolve effectively and efficiently by taking stock – literally and figuratively – with a clear mind and analysing and redefining goals, processes, technologies and decision making.

First is the ‘analyse’ phase, where leaders reflect on the last 18 months and benchmark their organisation in terms of people, processes, and technology. They need to understand the financial benefits of changing and closing any gaps across the core process of the business – this might include products, portfolio, demand, and supply.

Armed with a comprehensive understanding of where the organisation is right now, it is time to move to the ‘redefine’ phase. What is the future state of excellence that the business aims for, and what are the current challenges with people, processes, and infrastructures to reach that point? In many cases, planning for change will mean a return to basics, as leaders must recalibrate challenges, aspirations and direction.

Finally, after realigning strategic priorities and getting the whole organisation to believe in a shared vision, the ‘transform’ phase sets about implementing the necessary changes over time to realise the maximum benefits. The challenge for any organisation looking to transform into an agile, resilient and more data-driven business is to ensure everything from people, technology and processes work in harmony to achieve the desired strategy goal. 

Mind the gap: future-proofing business through staff training

Implementing a strategic plan needs to be a holistic process to ensure the sustainable running of a business united towards growth. There is a balance to strike: if you only focus on the short-term execution of capability of the business then you’re unlikely to deliver the longer-term strategy, but if the sole focus is on the longer-term strategy then you may fail in execution. By running an integrated business planning process, though, organisations can gain the agility to process data quickly and make smarter decisions.

Technology and people are the two central drivers powering successful digital transformation, and it’s imperative that they move at the same pace. Yet myopic business leaders, fascinated by tech, risk forgetting their people. Therefore, investing in staff training is critical – particularly now, in the period of so-called “great resignation”, when the battle to attract and retain talent rages. As Henry Ford said: “The only thing worse than training your employees and having them leave is not training them and having them stay.”

Now is a pivotal time for businesses, and specifically leaders. Indeed, a recent McKinsey study, Covid-19 Implications for Business, suggests that companies require a new set of skills to flourish in the post-pandemic world. These include social and emotional, advanced cognitive, and digital capabilities.

Encouraging employees to reskill or upskill shows a level of care and commitment towards them at this time of acute vulnerability. If left unchecked, automation advancements and coronavirus’ long shadow are enough to disable anyone’s career. While investment in staff training boosts morale and, in turn, productivity, it narrows the skills gap and helps better future-proof an organisation.

Unsurprisingly, 2020 saw the highest recorded level of worldwide supply chain disruption, according to the Business Continuity Institute (BCI), and that was before the Suez Canal was blocked. 

More than a quarter of businesses (27.8%) saw 10 or more disruptions to their supply chain during the year, with estimates that this cost businesses more than $4tn globally, the BCI says. 

Here are some top tips from business leaders on how to navigate future crises in the wake of the coronavirus pandemic.

Pivot when you need to

For pet food supplier the Healthy Pet Store, the first sign of trouble was a shortage of dog life vests. During summer 2020, thousands of consumers across Europe were taking up paddle boarding and wanted life jackets for their dogs. 

“It quickly became clear the factories in China that make most of the world’s life vests had been shut down because of Covid,” says managing director Deborah Burrows. “To add to our problems, restaurants were closed and suppliers stopped breeding ducks, which led to a shortage of duck meat for pet food.” 

In the short term, the business survived by selling frozen stock to consumers from its UK warehouse. For Burrows the lesson learnt is that supply chain resilience can be about agility; adapting to the supply chain you have, not the one you wish you had. 

Nurture relationships with your suppliers

While selling direct to consumers offered short-term revenues, the Healthy Pet Store also spent much of 2020 building an in-house purchasing team, who look after all suppliers and can offer practice support as small, independent suppliers grow. “What we’ve learnt is that we can only succeed if they succeed, so investing in helping them to have more robust supply chains is a huge benefit for us,” says Burrows.

Working with fewer suppliers and having closer relationships has been critical to Olsam, a business that buys and builds up Amazon retail businesses selling everything from stationery supplies to beauty products. The company has seen huge delays because of port lockdowns in China and an eightfold increase in the cost of shipping rates between China and the European Union.

“I’m a massive believer in keeping it simple, so across all our lines we try and work with one shipping provider for the United States, one for the EU, and a global logistics and warehousing provider,” says Damian Conroy, supply chain director at Olsam. “By investing in those core relationships, our business is prioritised because we provide them with volume, regular contracts and we talk to the same person at those companies every week. Relationships are hugely important in that regard.” 

Similarly, clothing retailer Seasalt has a huge focus on long-term partnerships with its overseas suppliers, says James Hampton, the company’s head of development and engagement. “The key to our supply chain and the relationships we have going back almost two decades is trust and regular communication. It helps us to ensure the provenance and quality of products, but also build resilience and sustainability into wider business strategy,” says Hampton.

Invest in scenario planning 

The most important part of supply chain management is visibility, says Les Brookes, chief executive of leading management consultants Oliver Wight. If you can see far enough into the future, it is possible to create a supply chain that delivers value and can handle disruptive events. “With the right visibility, you can end up at a point in two or three years’ time where you already have the right segmented response from the supply chain that delivers value in the right way,” he says. 

Some events are more predictable than others, but a resilient supply chain should be built on scenario modelling of the most likely outcome, plus the potential upside or vulnerabilities against those outcomes. 

Take control of inventory 

Having a good grip of inventory makes life much easier when supply chains are disrupted, says Suren Thadani, managing director at Interpath, a financial advisory business. “Covid-19 has highlighted the urgent need to tighten the grip on overall inventory management,” he says. “Most organisations have seen huge changes in demand patterns and have overstocked in response. Average inventory days are increased and just in time has become just in case.”  

Focus on stocking products that add the most value to your business, says Olsam’s Conroy. “In our business, 20% of the product makes 80% of the profit, so when there is pressure on shipping capacity or inventory, we prioritise the lines that drive our business forward,” he says. “The tendency is to try and make sure you have some of everything, but 80% of that could still be on the shelf this time next year and you can’t afford to keep the lights on.”

It’s likely we will look back on 2021 as the year sustainable supply chain management reached the top of the corporate to-do list. Indeed, 84% of supply chain leaders plan to invest in sustainable supply chain management initiatives over the coming year, according to Gartner. 

In response, technology developers are creating a range of innovative physical and digital solutions designed to improve supply chain efficiency and sustainability. So, what do supply chain leaders think are the most promising innovations on the horizon and what will the supply chain of 2030 look like?

We need to start looking at supply chain strategy in a new way, says Simon Geale, vice president at supply chain consulting firm Proxima. “Supply chain management used to be about balancing cost, quality, risk and speed, but now it’s about new value drivers, particularly sustainability and resilience,” he says. 

The first steps to innovating the supply chain will look different depending on your industry and the relative pressure it faces from customers, investors and regulators, Geale adds. For example, FedEx is tied to a carbon-intensive transport network, so is investing heavily in bonds and grants to develop innovative green fuels. Meanwhile, packaging giant DS Smith is investing in circularity and recycling initiatives.

Supply chain measurement and visibility 

There might be huge demand for sustainable supply chains, but many companies are still struggling to jump from the starting blocks when it comes to visibility outside their own premises, says Tim Lawrence, supply chain director with Digital Catapult, a non-profit agency that promotes adoption of cutting-edge technologies. 

Supply chain management used to be about balancing cost, quality, risk and speed, but now it’s about new value drivers, particularly sustainability and resilience

“At the moment it’s very challenging to get a consistent view of measuring and monitoring CO2 across the supply chain, so we expect to see tools that will support collaboration to ensure cleaner sources of energy are being used, and to measure CO2 emissions,” he says.

Blockchain solutions are already available that can give secure tracking and measurement of CO2 emissions from mining a raw material right through to the finished product. Automotive companies, including Volvo and Daimler, are using blockchain to track the production of CO2 when making batteries for electric vehicles.

“Blockchain is being used to authenticate those reporting elements through the chain and to confirm what suppliers are doing around emissions,” says Lawrence. “This is especially critical when you have tier-two suppliers that may run on solar or wind power, but need to switch to an alternate power source.”

Boston Consulting Group reports that 1.6bn tons of food is wasted each year, costing more than $1bn. Improving supply chain tracking using the internet of things (IoT) has the potential to reduce this waste by providing real-time supply chain monitoring. 

“There’s a lot of innovation around logistics traceability, using IoT-based tags covering location, temperature and shock,” says Jonathan Doyle, product manager at BT Final Mile. “The cost of the tags was prohibitive, but we’re seeing it come down rapidly, with easier links into 5G and wifi.” 

Real-time supply chain monitoring with IoT

BT Final Mile is using IoT to monitor its network of secure delivery boxes, which are being used by field service engineers to make repairs across the UK. Rather than driving to a warehouse to pick up equipment for daily jobs, engineers can go to a local secure storage locker to collect spare parts and equipment. Each locker is fitted with an e-sim that monitors the locker and feeds real-time information back to head office.

“We’re proactively notified if a locker is open and we can tell what items are removed from the locker. That information means we can respond much more quickly if there is a problem,” says Doyle.   

Having a network of secure, tracked lockers is making the final mile of the supply chain more sustainable. Reducing the distance between engineers and their equipment means lower CO2 emissions, less time on the road and fewer repeat visits because jobs and deliveries can be completed first time, most of the time. “We work with Calor Gas engineers who told us they are saving 5.6 tonnes each year, per driver, and they have reduced time on the road by 31%,” Doyle adds. 

A little further into the future, these savings could be amplified through the use of carbon-neutral transportation networks like those being pioneered by Magway, which is creating underground tunnels offering all-electric, zero-emission transportation services. “It’s early days, but I think it’s one of the most exciting innovations we’re seeing in supply chain,” says Geale. 

Autonomous supply chains 

IoT is providing a stepping stone towards autonomous supply chains for many organisations, with the potential for smart objects to report on supply chain metrics, and applications powered by artificial intelligence (AI) to make appropriate decisions to improve sustainability and resilience. Geale cites the example of Ocado and its AI-powered warehouse automation as a good example of early innovation. 

The potential of combining automation technology with IoT devices such as smart labels is of huge interest to companies like BT Final Mile. If parcels and parts can be packaged using smart labels, the company won’t just know what’s been added or removed from a locker, they will also be able to proactively understand what parts are being moved, where demand is stretched and if items are lost, damaged or stolen. 

Given the direction of travel, organisations that double down on technology, and also invest in their people, will soon develop the supply chains of tomorrow that improve visibility, transparency and sustainability.