Covid-19 is perhaps, the one black swan event that all of us were told to prepare for but had no idea, what it could be. Nothing in our experience and education could have prepared us for the situation we are in. So, what are the changes from now on? How does the future of supply chains look like?
1. Zoom is the new corner room
Townhalls have passed. Zoom broadcasts are in. The way companies communicate within and with suppliers and customers will increasingly be determined by technology. It will move from simple Zoom meetings to integrated enterprise systems, where supplier production planning and customer deliveries are interlinked virtually. The last remaining paper purchase orders or order acknowledgments, order trackers, payment follow-ups will disappear; which means meetings would become fewer but more productive.
2. No longer Work-life balance” – More “Work @ life balance”
Work from home is the new reality. Face to face customer meetings will be no longer required. Customer relationships will be no longer about managing customer perceptions. Customer delight is no longer a thank you mail. It would be replaced entirely by data-driven measures like order fill rates, on-time in full deliveries, etc.
3. Virtual Connection is the new personal connection
Intense negotiations/handshakes/celebration beers have passed. Virtual Hi-Fis are in. Relationships need to be nurtured differently. You would perhaps bond over a virtual game with your supplier’s key account manager. In an extreme scenario, maybe BOTS do not need to bond at all.
4. Global, becoming local supply chains will be more regional and less global
A local supply chain can be more robust and lockdown proof. Scale, no longer, will be the sole criterion. Flexibility will be the main driver. Darwin has never been more relevant. It is not the lowest cost network that will survive but the one that is most flexible. Product lifecycles will become shorter and shorter and run sizes will become smaller. Innovations would become more collaborative. Artificial Intelligence would drive customer insights which would drive innovations.
5. Automation in Manufacturing- Not just robots, a network of machines
Automation would increasingly become more and more critical to not just manufacturing but planning, measuring and delivery as well. This would need, not just be a set of automated machines but a network of automated machines. Intelligent machines will talk to each other, schedule production runs, automatically select and change machine recipes in response to order timelines and include maintenance breaks and spare parts replacements, as well. IoT would skip a level of evolution.
6. From “Stress test” to “lockdown test”
Business continuity planning would need to factor in lockdown impacts. It is no longer about one node failing in the network. It is no longer least-cost, it will be least impacted and most flexible. Manufacturing would also need to go mobile. A factory on wheels would be a critical component of the network. A mobile factory can simply move away from a lockdown area and start running elsewhere closer to other customers. Similarly, your supplier can move his mobile factory and set base closer to you.
7. Environmental Sustainability would become the core
As factories go mobile, energy would become more renewable. You cannot run transmission lines for a mobile factory. A solar power plant can be mounted on wheels and moved with mobile factories. 100% water recycling would become a business necessity thereby easing pressure on freshwater resources. Zero waste would necessarily become a core business practice. Industrial estates would increasingly become caravan parks for mobile factories. You park, plug and start manufacturing.
While these changes happen in the supply networks, the skills to keep these networks running optimally would be hugely different.
Leadership and Senior Management
Leadership would need to become more empathetic. The skills to manage generally skilled and largely loyal employees would be different from managing a gig collection of specialists without any particular loyalties.
Middle management historically has been a role for implementing governance, planning and co-ordination. With machine automation taking these roles the breed of successful middle managers would become extinct. The organizational pyramid would become shorter with a very large base. The demand would shift from wide general management skills to deep specialized technical skills.
From a homogeneous collection of basic skills with a high commitment, the base would become a heterogeneous collection of highly-skilled, lowly committed knowledge workers. Formal employment would increasingly become rarer.
The skills ecosystem
As schools and colleges become more and more online, formal education as we know it, now, would no longer exist. And with this, a new challenge of teaching social skills will arise. How will you teach sharing with friends, perceiving emotions, developing empathy, etc. online? Schools and colleges would turn their focus from knowledge building to skills building. The space for traditional arts and science courses would become smaller. As workers retrain and continuously up-skill, college and work would increasingly become seamless.
Amidst all these changes what will remain constant will be the fact that working in teams is winning in the market. As social distancing takes precedence, the interconnected world has become tighter. As supply chains reorganize, they would realize the connection points have changed but not the interconnection.