We interview Professor Omera Khan about supply chain design ahead of her talk at IMHX 2019.
Kirsty Adams (KA): Prof. Khan, at the upcoming Women in Logistics Conference which takes place at IMHX on Wednesday 25 September 2019, you’ll be speaking about using design to unlock value in the supply chain. Can you tell us why this is an important topic in 2019?
Omera Khan (OK): It’s estimated that up to 80% of a product’s eventual supply chain costs are already present at the early phases of design and development. Hence, decisions taken at the design stage of a product’s lifecycle affect that product’s subsequent value to a business. However, the often disconnect or misalignment of functions across the design to delivery process means that decisions taken on the drawing board do not consider the costs of transportation, or the risks at sourcing location or distribution channels, or the complexity involved in manufacturing the products that impacts the responsiveness to deliver.
The ‘new’ normal operating environment is unpredictable and volatile, requiring businesses to be smarter, flexible and more responsive. In 2019 particularly we have seen heightened media attention to sustainability issues, sparked by the devastation caused by plastic waste and general level of waste produced globally, the impact of climate change, and resource issues due to increase in consumption, travel and meeting the needs of a massively growing population has forced us to rethink about our sourcing and manufacturing options and consider reshoring or near sourcing, hence, designing closed-loop supply chains further adds to the growing list of expectations by firms to improve supply chain management and ‘design for sustainability’ is increasingly realised as being essential to long-term corporate planning.
We are already seeing companies, for example, in the UK textiles sector considering how to source and manufacture ‘back at home’. Whilst from a sustainability perspective this could be seen as a quick win, it raises questions for the global shipping and logistics industries, where trade may no longer be about only shifting finished products from point A to B but rather more logistics may need to think about new value adds that they provide for example, in security risk management and assembly.
Whatever that may be the point is that supply chains are no longer about only serving end customers, supply chains must also be about preserving the planet and the environment.
KA: What’s around the corner for supply chains?
OK: Transforming our supply chains to perform effectively in a very different world, where the prospects of more border checks as nationalism and protectionism take rise. Where Ai, robotics, augmented reality, additive manufacturing and machine intelligence replace our more traditional methods and business approaches requiring us to unlearn and relearn new tools. Where demand has shifted from being so time sensitive to being environment sensitive, thereby consumption may indeed slow down or vanish, which would have massive implications to global supply chains. Design for supply chain management will clearly increase in significance as the need to understand our product and its resource implications as well as its usage, footprint and disposability or depletion now become more important than fast fashion, for example, and how many times we can buy, consume and waste new products. Fast fashion will be replaced by sustainable fashion.
I advise companies to start scenario planning for their businesses to mitigate the impacts of disruptive innovation that have the potential to wipe them out if they do not adapt to the new landscape around the corner. Scenario planning could be a useful risk management tool as it alerts businesses to the potential uncertainties and unknowns and for plan for these.
Register here for your free all-access visitor badge for IMHX 2019, returning to the NEC Birmingham from 24 - 27 September 2019.
WIL at IMHX 2019
The Women in Logistics Conference takes place at IMHX on Wednesday 25 September. To book your place visit ciltuk.org.uk/Events/Annual-Women-in-Logistics-Conference.
• Professor Omera Khan (Risk Intelligence, Royal Holloway University of London) - Using design to unlock value in the supply chain
• Elizabeth Coggins-Hill (Supply Chain Future)- What can we do about modern slavery in the supply chain?
• Chris Green (Young Foodies) - How a level playing field drives growth and innovation in small brands
• Martin Port (BigChange) - A technology entrepreneur’s view of the logistics sector.
• Caroline Barber/Florence Bearman (Transaid) - Innovating to reach the last mile and reduce child mortality from severe malaria: a case study from Serenje District in Zambia
• Jennifer Swain (Clipper Logistics) - Diversity and Inclusion
• James Gill (CEVA Logistics) - Rebooting finance