Supply Web

3 July 2020

It has been over four months since the COVID-19 crisis has gripped our world. This exposed the fragility, inequities and lack of redundancies in our material supply chains. As a response, the world is moving through exponentially rapid change and social turmoil amplified by digitization. Organizations are rethinking, responding and reinventing everything to respond to the needs of their customers and employees.

Prior to the Great Disruption, materials flowed in what we thought was an efficient system of supply chains. Goods and services criss-crossed the planet while logistics managers and procurement specialists managed the risks and disruptions through the digital flow of information. The operating systems were built to meet the needs of customers to provide the most amount of goods at the lowest cost options. Supply chains connected companies through win-lose negotiations. Compromises ruled.

We thought it was working pretty well. Until it broke. When COVID the future came fast. Faster than any business was prepared for. The low cost had come at a price. Multi-year roadmaps for digital transformation, sustainability and global expansion came to a head. Nearly overnight, companies froze in place; whatever they had in that moment was all they had to weather an unprecedented storm. Most, if not all, faltered. Companies either found themselves paralyzed by the sudden drop in demand, or a dried up supply. There were no alternative playbooks or clear pivots. The waste built into the chain, previously only sometimes visible, became an anchor.

Everything broke. That is what chains under stress do—they break. They are only as strong as their weakest links.

The companies who are surviving, even thriving during this time, have supply webs, not supply chains. A web is the best way to future proof your previously linear chain. The digital world is a network, a web. Companies who never wish to face this crisis again will retire the concept of a supply chain, and instead adopt a material model that is resilient, a supply web.

Why A Web? 

The world of arachnids is an inspiration. A spider creates her web by linking many threads together. The more threads linked, the stronger the web. Out of crickets and other bugs, at ambient temperatures, the crafty spider creates a silk, a complex composite material that is five times stronger, ounce to ounce, than steel, able, compared to Kevlar, to absorb five times the impact force without breaking. For the web to maintain its structural integrity under force, the material is also highly elastic, stretching up to 40% longer than rubber and bouncing back as good as new. The interconnected structure can withstand wind and the elements. Waste is unheard of. A web begins at the center – what is available locally and then moves beyond the center to acquire needed materials.

Future supply webs will rely on both the amount and strength of partners. This includes: farmers, suppliers, factories, manufacturers, shippers, packagers, retailers, fulfillment centers and more. A supply web allows a company to move in and out of situations dynamically, without sacrificing quality, efficiency or cost. A sustainable supply web does all that, and ensures protection and advancement of people and planet.

In a post-COVID world, no company alone can resurrect their industry. It will take many partners, even adversaries, to work together to find new meaning and market purpose. It will also require collaboration of supply partners, who are now only a fraction of what they once were. Previous competitors will need to band together to provide the capacity, quality and cost optimization needed to save their industries. All parties have to be equal, treated equally, all weathering the storm together. Future systems must be dynamic and have the ability to work across systems, partners and time zones, all in real time, meeting the expectations of the post-COVID consumer.

The Rise Of The Conscious Consumer

A recent Futerra study in the UK and US found “that nearly 80% [of consumers] are willing to make lifestyle changes to stop climate change as big as those they’ve made for coronavirus.” The COVID-19 pandemic has accelerated the need for operational excellence, as it has propelled the conscious consumer into the mainstream economy. There is no turning back for brands who have compartmentalized their ecosystem. No longer can marketing claims sit apart from production practices. Company accountability now encompasses the entire supply network – from the farms where raw materials originate to the consumer packaging used at point of sale.

Brands who are already working to address other complex consumer trends like personalization, omni-channel purchasing and technology enabled experiences—will now have to address their ‘purpose’ claims in an authentic and measurable way. Transparency will become the backbone of any brand story, and without a powerful supply web to support this, brands who fall short will be abandoned.

The Supply Web

A supply web is a network of partners, all intrinsically linked together. One can not survive without the other. The strength of each entity enriches the strength of the whole. For supply chains, this means building a democratic ecosystem centered on the viability of the group. It is initiated by a single entity and then expands out, locally at first, carefully building the foundation. As the core structure stabilizes, it expands. Each connector thoughtfully engages with the other, nimble enough to move and expand.

For companies, it is no different. As brands begin creating their products, they start a journey that will involve numerous other entities that are composed of people and natural resources. As each brand chooses their partners, they should first look locally, where they have the best ability to judge the quality of partner business practices. From there, product needs will dictate where the web expands. Throughout this process, it will be imperative to maintain the same principles and values to ensure all members of the web flow in unison, as the business itself will ebb and flow.

Circularity is a key component of the supply web. It is by nature meant to stay intact, producing no waste. The same goes for brands who are creating goods of the future. There is no room for excess materials or toxic chemicals, polluting natural systems or human bodies.

ReInventing Everything

ReInventing Everything is how we prepare for an uncertain future. Moving from supply chains to supply webs is a key element to creating a diverse, equitable, resilient and frankly much better company.  This is the moment in time where the once impossible is now possible. We can help.

Thank you.

A Business Case for Sustainability

27 June 2020

Pierre-Francois Thaler, Co-founder and Co-CEO of EcoVadis, perfectly articulates  the new business imperative – sustainable supply chains – in his piece in Future of Sourcing, “The Growing Business Criticality of a Sustainable Supply Chain.”

Key insights include:

  • 88% of studies found companies adhering to social or environmental standards showed better operational performance, with 80% showing a positive impact on stock performance.
  • Sustainably minded shoppers will spend $150 billion on sustainable products by next year. That’s $14-22 billion more compared to prior years, pointing to new sales opportunities for businesses that prioritize sustainability in product devleopment.
  • Sustainable supply chain practices reduce costs by 9-16% and create a 15-30% increase in brand value. 73% of CEOs report sustainable business builds trust and reputation.
  • Ignoring ESG exposes investments to huge risks and erodes returns. This behavior has wiped out $534bn of valuation in the last five years.

Read more here: https://bit.ly/2NT6xM8

White Paper: Food Systems

15 June 2020

NextGenChef’s white paper, The State and Future of the Food System post-COVID-19, explores today’s most pressing questions.

COVID-19 has exposed the weak points in the U.S. food supply chain, raising fears of food shortage among consumers. The disruptions have drawn widespread attention to the problems that entrench the food industry, simultaneously urging the country to reflect on sustainable alternatives.

As consumers alter shopping behavior, suppliers run low on supply, and logistics buckle under pressure, brands who will emerge as winners will be the ones who lead with environmentally and socially responsible operations.

In this NextGenChef whitepaper, the team speaks with eight industry experts across the country, including senior supply chain consultants and CEOs who represent more than 180 organizations to uncover how COVID-19 has changed the food supply chain.

GoodOps’ CEO, Divya Demato, touches upon the importance of DTC food models and how the path to resiliency lies in supplier recovery.

Read on for exclusive industry insights here https://go.aws/2CdRJVU

Webinar: FASHINNOVATION Worldwide Talks

5 June 2020

FASHINNOVATION’s Worldwide Talks 2020 panel on Supply Chain and Circular Economy explores the role of equal justice, standardizing sustainability metrics, power of being an early adopter of ESG and future trends like plant-based materials.

Panelists:

Watch the full panel here: https://lnkd.in/djH-xNv

Why A Sustainable Supply Chain?

1 May 2020

The supply chain revolution is here and companies must transform to become socially and environmentally responsible.

Brands face increased pressure from purpose-driven customers, disruptive competitors, concerned shareholders and distressed suppliers. In order to survive – be it a Fortune 500 or a high-growth e-commerce startup – companies must undergo a transformation in how they source, produce and deliver their products and services.

Supply chain sustainability is the backbone and competitive advantage of the world’s most successful companies.

Companies can no longer rely on incremental impact, legacy systems and traditional corporate responsibility. Sustainability with integrity is hard; it requires a clear vision for the future, an understanding of complex ecosystems, and the agile deployment of interconnected strategies, systems and capabilities.

GoodOps makes transformation easy by designing innovative strategies to implement custom sustainability frameworks.

We are the compass for our clients, guiding them to stay one step ahead during a time of accelerating change. We realign and digitally connect supply chain networks across brand values, embedding new ways of thinking and collaborating from the c-suite to the frontline across partners. In parallel, we explore and leverage advanced technologies to explore the best way to make the desired impact on the resources and workers in the supply chain. We empower companies to become strong stewards of our planet and people so they can feel confident sharing an authentic journey with their customers.

Companies that transform into sustainable supply chains will improve profit, streamline operations and mitigate risk.

Customers choose purpose-driven brands over competitors, the most talented employees want to work for them and investors seek their limited risk profiles. End-to-end visibility, from raw material to finished goods, drives accountability and agility, helping brands become true partners in their supply network. Savings and valuable growth opportunities are realized across the extended value chain. And higher quality, socially responsible products differentiate their offering and justify premium pricing.

The key to success is properly prioritizing, organizing and resourcing complex sustainability initiatives.

All companies know they must implement social and environmental initiatives, but many times, this requires sourcing from new suppliers, adopting alternative materials and restructuring supplier contracts; the hard part is knowing where to start and how to execute. In every engagement, we design custom, multi-disciplinary teams augmented by networks of global experts with the necessary experience, skills and pragmatism to ensure results. Applying universal principles, market specific nuance and an agile approach, we scale what works.

We believe transforming supply chains is the fastest way to positively impact the world.

The 17 UN Sustainable Development Goals is a powerful blueprint for brands. Goal #5: Gender Equality, #8: Decent Work and Economic Growth, #10: Reduced Inequalities, #12: Responsible Consumption and Production, #14: Life Below Water, #15: Life on Land and #17: Partnerships for the Goals are just some of the goals brands can begin to focus on today. By simplifying complex sustainability initiatives, GoodOps helps companies achieve the impact they want to have in the world in a meaningful way.

View our services to see how GoodOps helps brands and startups build a competitive advantage through supply chain sustainability. Or send us an email at info@goodops.co to get started today.

The Shadow Economy of Italy

20 September 2019

Supply chains are moving in a more sustainable and transparent direction for industries around the world. While this global movement is evident to many, there are still companies, even countries, who remain in the dark ages. The shadow economy of Italy is a stark example. According to a recent New York Times article, sophisticated craftsmanship and hard labor in Italy is often underpaid and overworked. For example, seamstresses for high-end luxury fashion brands can be paid as low as €1 per meter of fabric they complete. The seamstresses and garment makers for these companies often go without contracts and are uninsured. In southern Italy, the most one seamstress has ever made is €24 on a garment. This is a fraction of the articles she produces that often sell for €800 – €2,000 euros for luxury brands. With a rise in transparency, how much will consumers tolerate from a company before they de-risk and humanize their supply chains?

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Operating Models

18 January 2019

Companies must transform their operating models to manage the supply chain networks of the future. Leading brands and supply chain providers have optimized linear, rigid and lean operating models with top-down, siloed decision making. However, companies must now compete in a digitally connected, omnichannel landscape where speed and flexibility are critical to success. For many companies, what used to be their competitive advantage is now one of their biggest constraints.

An operating model is the link between corporate strategy and execution. All too often, companies declare bold visions and hire functional leaders, but fail to differentiate their capabilities, strategically organize resources or establish an operational blueprint. Well defined operating models ensure value delivery, plus the ability to effectively counter disruptive competitors, capitalize on growth opportunities and mitigate risk.

Companies must transform their operating models based on the unique realities of their industry, strategy and extended supply network. To do this right, they must keep 7 key areas and questions in mind:

  1. People – What experience and skills do you need across roles and levels to thrive in a digital world? How do you ensure diversity, flexibility, growth and cultural fit?
  2. Process – How do you best realign processes to support core strategic priorities? How do you optimize information flows in a fast-moving, agile organization?
  3. Technology – When do you use cloud-based apps vs. proprietary, purpose-built apps for competitive advantage? How do you balance immediate ROI vs. long-term advantage?
  4. Data – How do you standardize and automate collection of critical data across your network? What tools and dashboards will make that data accessible and actionable?
  5. Governance – How do you ensure decisions are aligned with your strategy? How do you redefine decision making rights and processes to be data and analytics driven?
  6. Culture – What are the principles and values that guide your thoughts and behaviors? How do you inspire and motivate people to stay focused, committed and accountable?
  7. Structure – How do you redesign roles and responsibilities to deploy integrated squads focused on customer journeys? How do you manage across functions and locations?

Successful transformation of supply chain operating models requires an integrated approach. As companies seek to transform their operating model, it’s critical that they think holistically. Fixing one area without addressing the others rarely leads to differentiated or lasting change. Process improvements may realize incremental cost and time savings, but without an associated shift in technology tools and systems that makes data more actionable, or new team and decision making structures, the overall transformation will fail.

View our services to see how GoodOps can help you strategically transform your operating model and lead in a digitally connected, fast moving and complex world. Or send us an email at info@goodops.co to get started today.

Airbus’ New Supply Chain

10 October 2018

Airbus has hired Bellevue-based Icertis to digitally transform their supply chain. Airbus’ new supply chain will be focused on source-to-contract solutions across its various divisions. With supply chain transformation taking over, Airbus becomes the latest example of how important embracing this change is for success. Airbus currently works with over 12,000 suppliers, so correctly managing their supply chain could prove widely cost effective and efficient. The aerospace manufacturer specifically chose Icertis for it’s rapid integration of digital supply chains transformation to companies globally. Certainly Airbus is looking for safer, more cost efficient and traceable solutions to their business, so this transformation was simply a matter of “when” rather than “how.” The company will have stronger agility through digitization, allowing for stronger relationships with commercialization. Will Icertis emerge as a leading digital supply chain transformer for companies globally? What type of success will Airbus see with a new, highly digitalized system?

Want to learn more?

Pizza Robotics

30 September 2018

Zume, a restaurant chain founded in 2015, is propelling the food industry into the future by changing the way your pizza is made. The company uses robotics and artificial intelligence to receive orders, prepare, and deliver pizzas. Robots press the dough, squirt sauce, and then a human places cheese and toppings to your liking from an online order. Perhaps most noteworthy, the AI has collected so much user data, it can predict one’s order before they’ve even completed it. Zume’s system cuts order time by up to 20 minutes through these efficiencies. The restaurant’s high efficiency can even churn out 370 pizzas an hour. SoftBank is planning to invest $750 million in Zume’s pizza robotics, setting up this company to be a contender in the pizza delivery industry. Are automated cooking services the future of the food industry? Will human touch be lost in QSR efficiency, or will it remain an integral part of modern day culture?

Want to learn more?

Merck Implementing AI

10 September 2018

German pharmaceuticals firm Merck KGaA’s health-care division is aiming to implement a new AI augmentation process. Merck plans to implement the new process after deciding to switch to an automated supply chain system. The new system will incorporate AI and predictive analytics throughout Merck’s entire supply chain in 2019. Incorporating this type of technology is known to provide a competitive advantage in the industry. Merck already is using forms of AI to show trends, dips, and spikes across 100 products in a pilot program. In 2021, so-called AI augmentation will generate $2.9 trillion in business value and recover 6.2 billion hours of worker productivity, according to forecasts from Gartner Inc. Since the beginning of their implementation, Merck’s CIO, Alessandro de Luca, has seen nothing but positive effects. Their success had led to them to push the pendulum to a fully automated supply chain system across their 5,000 products. Is AI going to be a key element for growth in any industry in the future? Where are there areas where this technology can’t be beneficial to industries of the future?

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