Interview with Syspro: Realigning our disrupted supply chains Part 2By Ryan Noik 10 May 2022 | Categories: interviews
To explore the critical issue of the disrupted supply chain, and what business can do from a digital perspective, Ryan Noik speaks to Mark Wilson, the Chief Executive Officer at Syspro EMEA.
RN: With regards to the supply chain, how ready is South Africa for the next black swan event that may similarly disrupt the global supply chain? Were there lessons learnt and implemented that improve our readiness?
MW: The interconnectedness and complexity of global supply chains mean that when disruption happens due to a breakdown in logistics networks, natural disasters or pandemics, impacts will be felt on a human, social and economic level.
Many globally integrated companies with just-in-time operations had only a few weeks' supplies of goods already in transit when the epidemic hit, enough to provide just a short-term buffer. From a business resilience perspective, having a clearly defined plan in place to deal with such an unforeseen crisis is a critical component to protecting the ongoing success and viability of a business. When a crisis hits, business as usual ceases.
Enterprises are shifting away from a focus solely on tight supply chains for efficiency, such as just-in-time, toward a just-in-case strategy, which emphasises maintaining a degree of flexibility and diversification rather than strict efficiency. This gave them the ability to react and adjust in a way that they could fulfil their consumer and customer requirements but still continue operations.
Some organisations, specifically the early adopters of technology, were far better prepared than others and have actually performed better during this period like the metal fabrication industry. Their ability to adjust their capabilities and processes to accommodate shocks is what helped them throughout the pandemic and into the future.
For the next few years, we have to take a different approach to these just-in-time global supply chains. We have to be smarter. You may run into a cost and benefit discussion on the business side, but I perceive a readiness to invest in resilience.
RN: You mentioned that South Africa had fared better than most, all things considered, given the pandemic and the war against Ukraine. But can businesses be doing more to be more digitally agile?
MW: While South Africa has fared better than other regions in terms of our recovery from the COVID-19 disruptions, it is well known that South African manufacturers have been notoriously slow with digital transformation over the years.
For organisations to remain relevant and thrive in the future, they need to roll up their sleeves and tackle the digital transformation challenge head-on. When South African businesses are implementing essential technologies, they are often doing this in isolation, rather than across the board and leveraging them to their full potential.
From the research findings, many organisations did not have even cloud collaboration platforms in place and had to scramble to adopt them. Others were implementing IoT sensors and gathering data but were unable to analyse it. This highlights the lack of a digital roadmap and transformation strategy and without this, will be agile enough to respond adequately to future disruptions.
They take a holistic approach, connecting essential technologies across the organisation and with strategic partners instead, the findings suggest that many businesses did not set up a solid foundation in their digital strategy by jumping straight to digitalisation or digital transformation.
RN: From a customer point of view, do people globally need to adjust their expectations? For example, away from expecting instant or near-instant gratification of their desires to having to wait – and plan – for delays?
MW: On a global scale, there will always be disruptions to supply chains, however, if manufacturers and distributors plan, manage and respond to future disruptions accordingly, they should be able to maintain the current consumer demands and expectations. A balance along the supply chain can be achieved when a customer is placed at the centre of the supply chain, and their experience is not regarded as an afterthought.
Customers should always be placed in the centre of any business model as the customer experience can make or break a business. While businesses improved operational visibility through technological investments such as IoT or even looked into alternative eCommerce sales channels, the reality is that ongoing and real-time external collaboration with suppliers and customers is vital.
Same-day deliveries have become almost an expectation today, which is why businesses will have to adapt to meet this kind of demand. The businesses that are able to balance the customer experience and operational efficiencies will future proof their business.
RN: Has it helped South Africans that we don’t have the same degree of instant gratification as for example in the US, with same-day delivery from Amazon?
MW: To some extent yes. However, while we do not have the same degree of same-day deliveries within South Africa as compared to the US, there was a rapid acceleration of e-Commerce within the country highlighting improvements in how retailers were getting goods to consumers.
When using e-commerce and online shopping, the customer expectations from organisations to meet these same-day deliveries will continue to increase. We are in a global marketplace business must ensure their supply chains and channels are protected if they are to meet the expectations of the global customer of today.
While Amazon may be the pioneer of the distribution industry, the eCommerce and eCommerce delivery market has grown tremendously over the years, especially during the COVID-19 pandemic. The reason major distributors like Amazon are so successful and have such efficient operations is due to their level of digitalisation across the entire organisation. Many South African businesses have shown that it is possible to emulate their model, with technology playing a key role in success.
RN: To what extent does the supply chain chaos and turmoil also tie into business and consumer resilience and the need for us to develop each? Do you have any thoughts or suggestions as to how we can develop greater resilience and use our available technology to that end?
MW: The Covid-19 pandemic has strongly impacted our ways of living and buying, thus posing many challenges for both consumers and companies. Tough situations can make consumers vulnerable, but they can also stimulate organisations to be proactive, that is, to learn to adjust to a crisis or disaster finding ways of building resilience.
To me, resilience is the process of adapting positively to difficult situations. Technology can build resilience through innovation and flexibility, giving businesses the ability to operate during times of change with minimal impact on critical operations, and allowing them to be better prepared for future challenges. But achieving resilience is about more than just having the right tools and technologies; it is also about being able to recognise new challenges as they arise, and identify the technologies that can help solve them
Today, the digitally mature companies, that have a digital strategy and infrastructure implemented in all parts of their business are more resilient and agile in a crisis. These are the organisations that use the advances in technology, like automated systems and data-driven insights, to modernise their supply chains and be more resilient. For example, real-time data can be used to uncover supply chain problems across inventory at speed, predicting future disruptions and modelling solutions.
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