Supply chain disruptions are changing the landscape of global trade, forcing innovation and advanced use of technologies to meet these challenges. On July 16, during E2open’s E2talk Series: The Future Resilient Supply Chain, Suzanne Richer, director of E2open’s Global Trade Academy and Vincent Ramundo, senior director of solutions, discussed the trends, strategies and technology that supply chain leaders need to embrace for greater resilience.
We appreciate everyone who attended and participated in the conversation by submitting questions to the chat which will be addressed in this blog.
Now let’s get to your questions:
During this pandemic, there have been a lot of discussions about bringing certain industries and products back into the US. What do you think about the reconsideration of offshoring here in the US and around the world?
We can look at the example of personal protection equipment and how that’s become an obstacle to trade in certain areas. It’s not just a regional issue, but a global issue, with the inability to secure masks, ventilators and all the appropriate equipment needed for hospitals today that was needed even 4-5 months ago.
In the case of the US, there have already been executive orders signed in the last 18 months to reexamine the Buy-American Act, to make sure it is properly enforced and to determine whether or not we should consider bringing certain industries back. Other countries are grappling with these same concerns.
We might see an opportunity for countries to discuss how we could globally address this issue, and to make it feasible for supply chains to provide what is needed, when it is needed. I think this is going to be a challenge, and countries are beginning to consider it, but we will have to wait and see where that goes.
What do you see as the impact of Brexit on the supply chain?
With the Brexit scenario, which is fast approaching with a new deadline date (we should anticipate January 1, 2021), we are going to see some broad-based changes across the board. Just this past week, the UK government issued new guidelines on how to manage imports and exports in and out of that country.
Brexit brings a lot of different challenges, and it’s going to change the way supply chains are driven. It opens up opportunities for new free trade agreements with the UK that don’t exist today outside of the EU, and they are already in negotiation with a number of different countries to make that happen as early as next year.
You really need excellent data, which goes back to the question of data accuracy. How much data do you have? For instance, a lot of products going into central Europe actually pass through a UK port. So now there are going to be in-and-out fees that are going to be assessed next year that are not assessed today. How is that going to impact timing? Can you get in and out without much difficulty or will you be stopped because of lack of paperwork or another accuracy issue?
Where does data management come into the resilient supply chain? How does that affect the process?
Data management has always been a challenge. When you look at many companies, they will have multiple systems, and some of them may connect and some may not. Are they all working from the same source of truth? Are they just looking at one piece of the puzzle?
As we move forward with emerging technologies, we have an opportunity to merge these systems, share data across the entire supply chain and ideally train the entire company to be making decisions from one source of truth and one harmonized data point.
What are some of the regulatory issues facing companies today? How are they impacting supply chain resiliency?
Of course, regulations differ across the globe. The origin point of your product is a big regulatory concern today, especially with tariff challenges and emerging free trade agreements. On average, companies only take advantage of one to five free trade agreements when there are over 170 globally. Looking at those regions of the world, can you take advantage of a free trade agreement, qualify the product properly and reduce your costs so that your end consumer benefits?
Another challenge is that we think regulations are constantly changing, but the reality is what does change is the enforcement. There may be fundamental regulations that have always been in play, but certain governments don’t enforce them. The day they do, there will be a sudden stoppage in your supply chain.
How do you see the role of talent changing in the industry?
As we look forward to the next one to five years and changes in supply chain management and requirements, we need to pursue more consistent training across the organization. Does every department really know what drives the other departments?
We can’t look at things from one perspective and have to think about how well our employees are trained across the board in identifying risks and then sharing with multiple teams. Employees will have to be flexible in the learning curve, especially with emerging technologies, and companies will need to provide that training. Unfortunately, in times of supply chain disruption, continuity plans and risk management usually end up on the chopping block.
The difficulty is not to create supplier mapping but to obtain data from suppliers, and many of them consider this as their own IP and are not willing to share – any thoughts on that?
As you build a continuity plan, one of the key aspects is to not only know your supplier network but to know the data elements that are part of that network. There is a need now to build trust across your network, so your suppliers know you are not looking to replace them in the supply chain, but rather to mitigate the risks.
You should pursue a combination of things, including data management, accuracy of data, billing it into a contract and making it a part of your overall strategy. In today’s understanding of supply chain disruption, it’s becoming mandatory. As contracts expire, data accuracy and supply chain reliability should be a part of any future agreement.
What are the top three supply chain IT innovations that are key to master supply chain resilience?
First and foremost, any technology that provides visibility into your supply chain and identifies all of the multiple players is paramount to resiliency. Second, the use of artificial intelligence (AI) to drive interactive capabilities between your technology and team is especially valuable in identifying critical issues and precipitating an appropriate response. Third, technology that synchronizes information from all the different parties in your supply chain allows you to proactively identify and address critical needs to minimize the impact of disruptions.