By Andy Beth Miller
There we were, early 2020. As we rang in a new year and welcomed a fresh decade, our hopes were high and the future seemed ripe with possibility and promise. Suddenly, the Coronavirus pandemic hit, and we found ourselves living in unprecedented times amid a swirl of uncertainty and an economic shakeup of epic proportions.
The virus, wildly different government responses to it, and the associated lockdowns, hit all individuals and businesses, unequally, yes, but everyone was – and is still – affected. And then, just as the lockdowns started to be lifted, another incredibly human crisis arrived, where the whole world witnessed protests for racial justice take hold across the United States, adding a very different and incredibly important test for our global systems.
In these unprecedented times, how we will respond? Where do we go from here? These are obviously extraordinarily personally challenging times for many and in myriad different ways, and they are also posing challenges for procurement professionals, who are in the very difficult position of making day-to-day decisions that will affect the survival of their businesses and the health of their supply chains.
But Tara Norton, Global Head of Supply Chain Solutions at ENGIE Impact, a leading sustainability consulting organization, feels we have an opportunity to use these trying times to focus on more than survival.
As we sit down, virtually of course, Norton is careful not to minimize the monumental crisis that COVID-19 and the swell of Black Lives Matter protests has brought crashing into the middle of our living rooms, into our lives —and supply chains. Norton looks upon this time of extreme turmoil as an awakening, albeit a very, very rude one.
”First, the global pandemic affected all kinds of systems—supply chains obviously being a big part of that. And then, the protests started, reminding us that the systems that we have in place are not fair for everyone, and we must do something about this. This has been a real test on resilience, and how resilient many systems are.–Norton
According to Norton, these paired series of events has presented us with a catalyst that is challenging (okay, forcing) us to take a hard look at our business practices and ask ourselves: “In the context of this massive disruption that has hit all systems—including supply chains—what is the intersection between how companies are integrating sustainability into their supply chains and how they are thinking about resilience?”
And just in case we missed it, she then reiterates: “The word of the day is resilience, and there is much to be said about how resilience and sustainability come together in global supply chains. A sustainable supply chain is one that uses resources wisely, that is fair to and takes care of the people and workers all along it, and has flexibility and agility so it is able to adapt and recover from shocks. All of these characteristics come together to make it resilient.”
According to the National Academy of Sciences, resilience is “the ability to prepare for, absorb, recover from and more successfully adapt to adverse events.”
When I think of resilience, my mind immediately goes to an image of a rubber band, symbolizing the idea of “bouncing back” from difficulties and hardships I’ve just come through. However, Norton—especially when concerning procurement—takes a more proactive perspective, pinpointing the telltale signs of our resilience to be involving the proof of profound growth. Or, for better wording… forward adaptation.
In order for this to happen, Norton points to the need for us, collectively as procurement professionals, to take an in-depth inventory. “Procurement really comes into its own during times of crisis. That’s when you get a seat at the table,” Norton says.
”When things go wrong, that’s when we are brought in and asked to demonstrate our value.–Norton
Understand what is in your supply chain:
To minimize disruption, it is critical to build traceability and have transparency, not only in your first-tier supply chain, but also upstream. Also, understand the business and environmental social and governance (ESG) risks.
Invest in Supplier Networks:
This involves having good relationships, being a good partner to suppliers, business continuity, supporting the suppliers that are most critical to your business.
As we take this inventory, Norton specifically encourages us to focus on asking: “Where is it working?” Specifically, “If you look at your supply chain, there is going to be something that is working well. [Focus on] understanding why it is working and trying to extrapolate that.”
This could include taking such proactive steps as building redundancy into your system, being a good partner by paying suppliers on time, and ensuring that critical suppliers have business continuity plans. According to Norton, “All of these things are things that companies are supposed to do already, but can kind of go by the wayside when things are going well.” Sometimes, apparently, it takes a crisis to shine a proverbial light, illuminating those cracks in the system.
As we are faced with these proverbial cracks, Norton shares that this is a good time to look at the metrics that you are using to measure your supply chain. Specifically, avoiding the pitfall of being pigeonholed to focusing on cost-cutting or efficiency alone. “It’s also a good time to shore up your risk management processes and design them for today’s uncertainty,” she shares.
These crises have really underlined how connected we all are, and no more so than in global supply chains. Perhaps during such a difficult time for the world, and for supply chain and procurement professionals, focusing on traceability and building relationships seems a good place to start to rebuild.