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Supply chain principles helping the UK Government through COVID-19

Nancy Rudolph, global marketing manager at SAS, spoke to Chris Tyas of DEFRA about logistics during the pandemic.

Planning the movement of vital food and supplies during this pandemic is a mammoth task for governments and organisations. When we spoke to supply chain expert Chris Tyas before the coronavirus struck, it was clear that his 40 years’ experience in the consumer packaged goods (CPG) industry would stand any business in good stead. Little did we know that this wealth of experience would soon be helping the UK Government to make sense of the huge task as it navigates its way through the COVID-19 crisis.

Chris is currently helping the Department for Environmental and Rural Affairs (DEFRA) with its food resilience strategy. With 36 years’ experience at Nestlé, the world’s biggest CGP company, his reputation as one of the top supply chain executives for Germany, Austria, and Switzerland (the DACH region) is of huge value amid the risk of stockpiling or shortages of essential goods.

The task is a complex one, with no clear end date to the pandemic, and with changeable public attitudes. However, the insights Chris shared with us earlier in the year give an indication of how Britain is expertly managing its supply chains during this crisis. Read on to discover Chris’s principles, which the UK’s supply chains may well be leaning on during the pandemic:

1. Technology is nothing without creative interpretation

“Technology takes creativity, and it takes perseverance to secure a tangible benefit,” said Chris. “For example, we often hear that data is the new oil. But oil alone isn’t valuable. It must be refined into petroleum.  And so must data be refined into information and that takes knowledge, creativity and perseverance.”

Chris’ comment couldn’t be truer now that CPG companies are scrambling to uncover actionable insights into how consumers are changing their demand patterns during the ongoing COVID-19 crisis. As shops begin to reopen, this human perspective will be key for interpreting data on public opinion, and will be central when it comes to planning each phase of the return to normality.

2. Artificial intelligence (AI) is transforming our supply chain capabilities

AI is changing the nature of supply chain and value chain management,” Chris said. “It’s enabling professionals to focus much more on making decisions rather than processing information and in doing so it’s making the jobs more interesting and more rewarding.”

AI and machine learning (ML) are now playing a key role in addressing the COVID-19 pandemic by helping identify changing consumer patterns. With a huge number of factors to consider, intelligent technologies can understand this data quicker and in greater depth than humans. Governments therefore have more time to make plans for how these findings can be used within Britain’s food resilience strategy.

3. Scale analytics broadly rather than deeply

Chris revealed his secret for success in scaling analytics across the enterprise at one of the largest food and beverage manufactures in the world. His advice? Go broad rather than deep to make analytics ubiquitous, in developing countries as well as in highly developed markets. “It’s easier to focus resources on doing in depth projects in developed markets with already highly skilled people, but that broad rather than deep approach has provided the foundations that now allow for more in-depth follow up,” said Chris. “As a result, the house is now better built and more secure for the future.”

Analytics can help find new patterns in supply chain data daily, without needing manual intervention. Used widely across organisations, they can change the culture to foster greater trust in predictions produced by algorithms. Algorithms iteratively query data, with many using constraint-based modelling to find the core set of factors with the greatest predictive accuracy to address patterns. In supply and demand, this will help to inspire quick decisions when inflection points suddenly arise during this changeable time.

4. Supply chain leaders will soon become CEOs

“The leaders of business have always come from the functions most critical to changing business,” said Chris. “Today, corporate value is increasingly driven by the volume of satisfied and repeat customers. Organisations like Amazon have increased the expectations that we have as consumers. The pressure to get the right product to the right place at the right time at the right cost is even higher than it has been before. The people who turn that big picture into executional reality are supply chain leaders. This is increasingly the case as value chains become more network based. We’re in an age of instant gratification and as a result, board members are increasingly turning to those executives who can change strategies into executional reality, just as they have in Apple for example.”

The response to the crisis has highlighted the value of supply chain knowledge: this will likely continue in the new normal following the crisis as customer expectations continue to rise. In today’s high-stakes environment where companies must make decisions at a rapid pace, it’s never been more imperative for chief administrative officers (CAOs) to provide organisations with timely insights that are actionable in real-time as we fight COVID-19.

5. Collaboration between organisations is key

“I learned during my 40-year career, that no one company, however big, retailer or manufacturer, can succeed alone,” said Chris. “Collaboration is the key. One of the foundations for collaboration is standards. Common standards. And standards are increasingly fundamental to the way we work and live. Let me give you a simple example: the barcode which has now become ubiquitous in all of our lives. The barcode requires a huge amount of collaboration between companies, government and technology suppliers to ensure that each of those bar codes is indeed unique.”

Collaboration and full transparency between retailers and their CPG suppliers are crucial for identifying and acting upon demand signals and changes in demand patterns. Constant communication will enable retailers and CPG suppliers to act fast and appropriately to mitigate root cause threats that contribute to under-predicting demand for essential items during the crisis. The new normal no longer just relies on collaborating across internal departments: increasingly it is about humans partnering with machines in an autonomous supply chain with full transparency.

What does this mean for the future of supply chains?

This crisis is not only a temporary stumbling block in the road for many suppliers: it will cause huge repercussions across all industries and disciplines, the supply chain included. Whether through finding ways to cope, or struggling to meet demand, retailers and their CPG suppliers will emerge from the pandemic with the aim of creating a stronger, more agile and more transparent supply chains in the long term. Humans will partner with AI and ML in the pursuit of more intelligent supply chain insights, and they will prioritise analytics in order to plan better and more flexibly.

Ultimately, the COVID-19 crisis is a wake-up-call for supply chains. As the value of sage advice like Chris’s becomes clear in times of crisis, adoption of technologies which help create smoother processes is set to boom as we return to a new normal.

Learn more about retail and consumer goods solutions in the age of COVID-19.

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