I pen this Supply Chain Matters commentary at the conclusion of the Supply Chain Council sponsored Executive Summit meeting held in Indian Wells California.  This Summit is a purposeful gathering of supply chain executives with an overall agenda that is focused on strategy sharing, thought leadership and networking.  Commentary related to day one can be viewed here.

Highlights of the final day of the Summit including a brief overview of PwC’s latest released 2013 Global Supply Chain Survey, the 9th year of iteration of this study.  Brad Householder, Supply Chain Council Board Member and Principal at PwC highlighted the Executive Summary with the key message that organizations the acknowledge supply chain as a strategic asset generally achieve 70 percent higher performance. Other important conclusions drawn from the latest survey data is that one size supply chains do not ill all needs, at that leaders tailor their supply chains to the strategic needs of different business segments.  This particular notion was reinforced by a number of the speakers at this year’s conference.  According to PwC’s latest assessment, interest in next generation technologies and sustainable supply chains is growing among multiple industries.  We were able to scan the hard copy report and will highlight other interesting findings in later commentary.

Dan Gilbert, Executive Vice President of Operations for Barnes and Noble Nook group provided an interesting perspective on bringing together both physical and digital supply chain capabilities in the notion of the Nook tablet and demand for associated electronic content. In our travels among many supply chain management conferences, this was one of the view organizations that are actively leveraging social media based indicators to plan supply chain needs.  A notable example was how Nook product development group monitored overwhelming consumer desires for a tablet reader that would support bedtime reading without disturbing one’s partner.  In the Ferrari household, that is indeed a real-time problem which has forced us to seek out small LED readers.  The result was the Nook GlowLight Simple Touch which was described as a blockbuster product launch.  TTM and asset light objectives drove the Barnes and Noble Nook supply chain team to successfully leverage SaaS based information systems  in PLM, response planning, and POS data cleansing to broaden supply chain business process capabilities without getting bogged down in long systems implementations.

Linda Conrad, Director of Strategic Business Risk at Zurich Financial shared some mind-blowing quantification on the cost impact of recent natural disasters that severely impacted certain global supply chains. Some examples, the loss estimate of the 2011 Japan earthquake and tsunami was pegged at $210-$300 billion, with Contingent Business Interruption (CBI) loss numbers of $5-$15 billion.  Similarly, the 2011 Thailand floods had $50 billion in economic losses, while portions of CBI loss are still being settled. Other interesting data to ponder is that according to Zurich, 40 percent of disruptions occur in the multi-tier supply chain, below Tier One suppliers.  Supply Chain Matters has heard these similar conclusions from supply chain teams directly involved in these disasters. Even more sobering was Zurich data that certain organizations encountered in excess of a $500 million impact in a matter of a week.  As we have often reinforced, the message is that every supply chain needs to be risk aware and risk sensitive.

I was pleased to moderate the closing event, an Industry Analyst and Executive panel discussion.  Joining me on the panel were:

  • Dwight Kloppich, Research Vice President, Supply Chain at Gartner
  • Simon Ellis, Practice Director, Supply Chain Strategies at IDC Manufacturing Insights
  • Dan Gilbert, Executive Vice President Operations for Barnes and Noble Nook Group
  • John Zapko, Vice President Global Procurement for Lenovo

Our panel members shared some interesting supply chain survey data and the panel dialogue had discussion in areas of strategic goal alignment, driving supply wide change management, leveraged use of technology and growing skills gap within many industry supply chains. As is often the case, the time flew by just as the panel was diving deeper into a two-way exchange of important topics. Thus we share a nugget with conference organizers- panel discussions get far more interesting when time is extended to 90 minutes.  I again extend my thanks to all of the panel members for their time and participation.

The Supply Chain Council team shot some video of the panel and will hopefully share this with a broader audience.

To conclude our commentary series, I share my personal takeaways and observations from this year’s Summit as the following:

It is truly remarkable as to how far supply chain organizations have come in mastering a respected seat at the executive table.  Consider all of the current complexity of globally dispersed supply chains and the extraordinary occurrences of major disruption brought about by unprecedented natural disasters that have been successfully overcome.

Technology enabled capabilities are playing an ever more important role in needs for more informed and quicker decision-making.

The skills and talent gap is real and getting more important.  The need for proactive actions among industry, government, academia and other groups has become compelling.

Many more and interesting challenges remain, and residing in the supply chain can certainly be a career that promises invigorating challenges in the months and years to come.

As is usually the case, I’ve captured numerous other pages of Summit notes which I will assimilate over the coming weeks.

A final takeaway to once again share is that as always, Supply Chains Do Matter!

Bob Ferrari