- Insider recently selected the top people transforming business across North America, Europe, and Asia Pacific.
- Three members of the supply chain list gathered together for a virtual roundtable.
- They discussed supply chain disruptions, adjusting to new norms, corporate social responsibility, and the future of sustainable packaging for e-commerce.
- Visit Insider’s Transforming Business homepage for more stories.
The COVID-19 pandemic proved not only how interconnected our world is, but also just how dependent we are on supply chains functioning smoothly and predictably. From toilet paper shortages in early 2020 to vaccine logistics now, the world’s supply chain has been in the spotlight both directly and indirectly for more than a year now.
Insider recently selected top people from North America, Europe, and Asia Pacific who have been transforming the transportation industry. Three of those Transformers recently joined us for a virtual roundtable on the state and future of supply chains: Hannah Kain, founder and CEO of supply chain management supplier ALOM Technologies; Peter Evans, CEO of sustainable supply chain technology company Orderly; and Mei Yee Pang, the head of DHL Asia Pacific Innovation.
They discussed everything from early pandemic disruptions and adjusting to new industry norms to corporate social responsibility and the future of sustainable packaging in a world where lockdowns have rapidly increased how much stuff we’re ordering online.
You can read about all that and more below in the transcript from Insider’s Supply Chain Transformers roundtable.
Transcript has been edited for clarity and length.
Insider: Peter, can you tell us a little bit about where you thought this business was going before COVID-19 hit? What did your five-year plan look like this time last year or a little bit earlier?
Peter Evans: So our five-year plan was almost the same, but little bit slower than the way we’ve progressed in the past year. I think the pandemic’s just sped things up for us, really, in terms of growth of our company and growth in the supply chain as a whole.
We were getting traction, supply chains were moving toward automation, but not quite in the way they are now. People were beginning to understand the benefits of big data.
Many of these shocks that came into the food supply chain, we saw happen in February. We knew what was going to hit in March. Yet the reality really hit that the lower-tier suppliers are really critical to the overall supply chain.
Insider: Hannah and Mei, does that track with what you’ve found over the past year – that COVID and the pandemic in general, putting all this stress on supply chains, ended up being more of an accelerant of existing trends that you’ve been tracking in years prior?
Hannah Kain: Yes, I think that’s correct. Now, again, we’ve got to remember that it’s very easy to talk about COVID and the pandemic all the time, but we had another trend that heavily impacted the last year, which is the geopolitics and the trade wars. And those two things ran parallel. And what happens to a lot of people in supply chain is it gets co-mingled, everything gets confused and changed, et cetera, but I think it’s important for supply chain practitioners to think that it is really two different events and they just coincided the time-wise.
So I think the entire geopolitics, and the trade wars, and the nationalism, and the added complexity of cross-border trade really exploded this last year. If you look at it until very recently, the supply chain COVID story is a story of demand shift, not of supply problems. Demand shifted so dramatically – you know, sometimes with demand shifting 50% or a 100% compared to forecast. The supply really got constrained, right? So if the demand had not shifted, the supply side would have been difficult, but it would still have been flowing really, really well.
Insider: Can you give us some specifics on that? Was it that everyone was looking for more toilet paper?
Hannah Kain: Yes, we can talk about the toilet paper. I never thought I would be interviewed so much about toilet paper. [laughs]
The paper crisis is certainly a good example, but so is home electronics, right? People buying home electronics, the tests that people all of a sudden have at home with a lot of shifts going on, which is causing the chip crisis right now. So what’s happening is you have the change in two levels, really, if we want to be very simple about it, it’s: “Which products do people buy?” But the other thing that happened was that channels shift. We used to go and buy things in malls, et cetera, and all of a sudden we go online and we buy differently. So those are the two big demand shifts.
With the panic, toilet tissue demand for consumers went up by 700%, and the journalists I’m speaking to, many of them say, “But why don’t they just make more?”
I’m like, “Well, guess what, you need equipment to make more toilet tissue, and where do you get the equipment from?”
A lot of times, from China, but even if you use a local equipment maker, they need spare parts from all over the world and it just takes time to deploy it. So certainly the demand shifts were huge, and in any world that would have been almost impossible to meet 100%.
Insider: Mei, can you expand on that coming from the Asia point of view specifically? How did you see that demand shift change over time, especially in a part of the world where it seems maybe the pandemic hit harder earlier and maybe the the recovery curve came a little faster or a little earlier?
Mei Yee Pang: I would say that supply chains today are so global, you see pretty much the same phenomena everywhere we go. We too had our toilet paper issues. We too had glassware issues, because there was at some point in time a global shortage of glassware because everybody started making jams at home and needed glass jars.
So we do see very interesting demand shapes and a lot of them, looking back are something that we can expect. That’s where big data potentially in the future can come in more, better forecasting some of these effects that we normally wouldn’t have expected.
But I think what came out of this whole thing is, I think there’s a newfound respect for the sector from the boardroom to the individual consumers at home. There’s a newfound priority placed on the sector to put in more technology, to put in more innovation, to put in more R&D into making it more agile, more prepared for situations like this. So I’m quite optimistic about what we can see from the sector in the next few years.
Insider: Peter, I’m curious. I think a lot of people were surprised – people who are not involved on the supply chain – were surprised to learn how a lot of things work over the last year. Like people asking Hannah, “Well, why can’t you just make more toilet paper?” But what surprised you the most over the last year?
Peter Evans: I think it was the resilience for me.
Probably to start with, the impact of the pandemic didn’t feel too great. It was kind of running in and around the team and our clients rising to the challenge and getting down and sourcing the problems. I think it’s not about how enduring we were as a company and supply chains were during the initial crisis, but it was more about how fast someone can recharge their batteries and get ready for the next event and then the next change, which for us, especially in the UK, was a borderline crazy, to be honest. It was one supply shock after the next. The rules were changing like we’ve never seen before, and a lot of the politics were quite fast moving compared to what was happening in some of other countries as well.
I think most people now have a mantra of “Expect the unexpected,” and people are more resilient to things regarding the supply chain as a whole. I think it surprised me how disconnected everything actually was.
So we’re technology and we’re AI, and we already work with organizations that are quite forward-thinking. Some of the organizations we’ve run into during the pandemic saying “Can you please help me?” was quite shocking. We were seeing shortages of certain products where one client had exactly the right product that another client could have, and food and processes were just going to waste, which was unbelievable, so we did everything we could to help during the time.
Since then, we’ve done a lot of work around supply chain visibility, workflow management, but also creating sales and being able to help our clients to share stock and food and beverage with each other. But yeah, the waste was the main one for me.
Hannah Kain: If I had to pick one thing, it’s how little collaboration there was globally around finding solutions to the prices. It’s been fairly disjointed. And also the regulations, how fast and furiously different regulations came and with how little understanding of how the supply chain really works and how it’s impacting everybody.
Mei Yee Pang: It was just quite amazing how we as a company, the entire industry, and our customers just switched gears from one day to another – literally to change business practice, to switch on their business continuity plans, to really deal with the pandemic.
For example, our customer service, which was predominantly an in-person, in-office kind of setup in most parts of the world, literally overnight had to switch to work-from-home setup. We were literally bringing our laptops and computers from the office to the homes, bringing chairs and things like that. And in the context of Singapore, houses are not too big.
At DHL Consulting, we see ourselves championing some of these new practices that we would like to inspire our organization to do, one of which is the continuation of this work-from-home concept. I think the whole real estate of offices, the whole concept of working, and the tools that we would be using for offices will change. At the shop floor, there’s a lot more focus on health and safety and cleanliness, so I think a lot of the safety distancing and the use of technology like autonomous bots for the cleaning will become a lot more quicker to deploy and [there will be] a lot more acceptance for these investments.
Another thing that I think will keep coming at us is this increased e-commerce. I took a quick look at what Peter is doing in the area of packaging. I really like the topic. It’s a big topic now, because every time I receive a parcel, I feel bad about it because I’m contributing to waste. I think this is something that needs to change. We can’t be sending individual shipments using partially utilized vehicles to send stuff around to individual homes. I think that that kind of system needs to be seriously thought through. It’s not easy, but I think as we go more and more from a less than 20% e-commerce channel to now, some companies are having that switch around to e-commerce as a major channel, we are going to see a lot of waste coming into play and it’s not sustainable.
Insider: And it creates this really new calculation that I at least find myself making, which is: “Do I order this package from a store knowing that it’s going to have these effects on the supply chain and I’m going to have this packaging, or do I go to the store myself and my car pollutes the pollutes this much?” And I have to factor in the risk of: “What if I’m sick and I’m spreading a virus?”
Hannah, can you pick up on this idea of packaging that Mei brought up? With this rise in e-commerce, how do we keep things more sustainable and more possible at a practical limit? What changes are you seeing there?
Hannah Kain: I do think that the switch to e-commerce is here to stay, but there’s another really interesting and very positive thing coming out over the last year as people have been thinking more about their relationship to companies. Global social responsibility, corporate social responsibility has become a way more important for decision makers. It’s driven by consumers, and we want companies to be in sync with our values. We don’t want them to be out of sync.
For instance, early in the pandemic, there was a survey done in the US showing 87% of consumers did not want to buy product from companies that did not keep their workers safe. Even if they needed the products, they would not buy them if they had an inkling that the workers were not safe.
We’ve never seen sentiments like this before, and it’s very healthy and good, and it’s forcing the corporations to think differently about their supply chain in a very healthy manner. In any crisis, there’s a silver lining, and I think that’s it – that we are getting way more corporate social responsibility and it’s pushed by the consumers and it’s becoming important for decision-makers.
In terms of packaging, we are a little bit in a tough spot right now because recycling and return packaging is of course a big issue because of the risk of infection, et cetera.
I think this is something that we’ve got to develop over time. There’s, in my best opinion, no easy solution that’s coming up. But I do think that the big carriers are going to come out with support in this area.
Mei Yee Pang: Analytics will help in this front. In our organization, we start looking at how we can help our customers look at packaging and use data information to optimize the way we pack, the way we pelletize – every small bit counts to really reducing our footprint, and at the same time, lowers cost. So what’s not to like about this sort of solution?
Hannah Kain: The other thing that I think is going to be a trend is – Peter was talking about the food industry, but if we go to things like consumer electronics, everything was packaged for the retail shelves. Maybe now you have a shippable box and you don’t have a box inside a box.
Peter Evans: The main tool and the main product we create is something called a scorecard. It rates everyone who manages supply chain operations – from someone in a warehouse to the CEO – on a scale of zero to five. Zero being “You’re wrecking the planet and you’re wrecking your business,” five being “You’re really making some decent change here.” We use AI against all this data we pull in to give each person two recommendations each week on what they can do to provide the biggest, most sustainable impact to their supply chain.
So I think for us, it’s changing people’s mindsets on an individual level, showing them what can be done in the world as well – what can create the biggest benefit.