In her latest talk with SVP of Operations, Kevin Brzezinski, Runa Macleod, VP Marketing EMEA, was keen to understand what lessons we’ve learned, and how this experience will change the way we work with channel partners in the future.
Runa: In our last talk, we heard how processes, data and teamwork ensured our supply chain stayed operational in the lockdown. What lessons have we learned?
Kevin: Firstly, having a detailed business continuity plan – and implementing it at speed – was critical to keeping us agile and responsive. Secondly, recent improvements we’ve made to our business – such as optimising our logistics centres, improving cycle times, inventory health, and global sales and operations processes – have had a direct impact on how we operate.
Runa: What lessons have there been for the channel as a whole?
Kevin: For many of our vendors, carriers and partners, this is a once-in-a-generation test of business continuity, planning, supply-chain agility and flexibility.
COVID-19 has exposed many weaknesses, and every organisation will have to analyse their global footprint and implement supply-chain risk management to better prepare and manage inventory and stock levels. Working capital optimisation needs to be reviewed to better prevent supply-chain disruptions.
Every business will need to closely monitor short-term and long-term demand and inventory to accommodate any production loss in the wake of factory closures and economic slowdown, inventory depletion and stock outs.
Runa: What role have our close partnerships with carriers played?
Kevin: In normal times, we take the logistics of the supply chain – getting product from A to B – for granted. In the pandemic, this suddenly became mission critical.
After border closures became a reality, the reduction in global air traffic led to a decrease in air freight capacity and increase in prices. Many of our vendors rely on these for their thousands of suppliers and just-in-time delivery models. This led to delays in production due to missing critical components, and, more importantly, to increased congestion at major ports across the globe.
Transcontinental road freight suffered from truck driver shortages, many afraid to drive to infected areas, especially northern Italy. Those who took the risk charged a significant premium that ate into narrow margins. Border crossing times have gone up, leading to increased lead times as well.
This illustrates how closer partnerships and collaboration could play an even more important role in the future. No single stakeholder can solve supply-chain problems or transform the supply chain on their own. We are all in this together.
The supply chain is shifting from a back-office, operational role to a strategic, competitive advantage, with a renewed focus on global supply-chain capabilities, reach, scale and services. There is no doubt that we will take the opportunity to work closely with all our partners to ensure we collectively adapt and evolve.
Next: Kevin reveals his vision for the future of the supply chain from AI to sustainability.