Today’s supply chains are in permanent evolution to remain agile. The confluence of technology trends mean constant system implementations on the fly. Advanced planning processes need to pivot to an integrated business planning set up. Realizing advanced analytics ambitions stretch the development of most organizations’ skills and capabilities. The scope and speed of change is almost overwhelming and requires strong project management. Orchestrating the myriad moving pieces is not art but science. 

   To explore the most effective angles to approach the complexity, Wolfgang Rabl, CEO of next level consulting, and Andreas Radke, Chairperson of the BVL Chapter Singapore, invited supply chain and logistics leaders and experts to an executive round table on “The next level of … Supply Chain Management”.

   The “next level of…” format brings together experienced practitioners to discuss change drivers, trends and directions that shape the future of an industry, share experiences, exchange viewpoints, and explore ways to respond effectively. The diverse backgrounds of the participants provide many intriguing angles. Functional affiliations range from SCM, project management, manufacturing, sales and HR, in industries as wide as logistics, warehousing, electronics, automation, IT infrastructure, advisory and pharmaceuticals. Additional, insights were provided by research institutes and training academies. Each participant has the opportunity to actively contribute to the discussion. 

   The event started with a brief introduction to the emerging developments and trends by Thomas Martin, next level consulting, and an overview of the BVL study on Trends and Strategies of Supply Chain Management by Andreas Radke, BVL. Then, facilitated by Thomas Halliday, the participants from many different functions in industry and public entities carried the discussion forward. The participants readily agreed on the drivers of change in the form of shifting economics and changes in the playing field of globalization, amplified by digitalization, artificial intelligence, and Industrie 4.0, with an additional vector of changing value systems in the company, marketplace and wider society. The focus then quickly moved on to a change enablement framework that suggests incorporating a company’s strategy, its current state of operations and its inherent culture for successful change. Culture was here proposed to be shaped by everybody in management positions from top to junior.

   This quickly moved on the often inadequately addressed chasms between top-management who come up with lofty ideals of strategy and change and middle management who have to execute it but cannot follow. Regularly, the organization hired the best employees for the previous strategy. Taking them to the next level is just one of the main challenges. Incentive systems contradicting the need for change stifle the required motivation. In essence, companies see the need for change, but already fail to do so for their key performance indicators which cannot support the change. A major gap of KPIs is the lack of considering the risk of standing still. In warehouse design for example, return on investment is generally calculated by cost and benefits, however the risk of not investing (e.g. in additional picking and packing resources) and thus losing out on future business opportunities isn’t considered.

   Additionally, people generally think in linear models, while we are increasingly surrounded by geometric changes. Google for the longest time after its IPO wasn’t identified as a serious competitive threat because its offers exemplified slowly growing added value. The competitive error of now failed companies lied in the missing understanding that Google grew geometrically, i.e. the more users joining the platform the better it gets, attracting in turn more users, and once it reached the critical point, the business took off.

   Platform business models – the archetype of geometrical value added – will grow in importance. The participants agreed in their anticipation of an “Uber of Logistics”. Citing the evolution from 3PL to 4PL and now to the 5PL, decentralized organizations will emerge more widely. On the other hand, the participants agreed that the orchestrators of these platforms are still undefined and at best partially established in logistics.