A-List Insights is an interview series where we talk with industry thought leaders and experts about different topics surrounding logistics and supply chain – gathering their insights and experience firsthand.
In this segment of our Insight Series we feature Adrian Gonzalez, a trusted advisor and leading industry analyst with more than 20 years of research experience in transportation management, logistics outsourcing, global trade management, social media, and other supply chain and logistics topics. He is the founder of the popular industry blog Talking Logistics; founder and president of Adelante SCM, a peer-to-peer learning and networking community for supply chain and logistics executives and young professionals; and founder of Indago, a market research service that brings together a community of supply chain and logistics practitioners who share practical knowledge and advice with each other while giving back to charitable causes.
Adrian is a frequent speaker at industry events and conferences, is regularly quoted in industry publications, and is a recognized LinkedIn Influencer with over 250,000 followers.
This is the last of a five-part series interview with Adrian. To provide context to the current climate, the entire interview was conducted in late March 2020, in the midst of the worldwide COVID-19 pandemic. To get caught up, read Part 1, Part 2, Part 3, and Part 4.
That book is still being written and it’s going to be for a while. I was thinking about this because I figure I’ll probably write a post about this in the near future myself, but yeah, I think there are going to be a lot of lessons from this. The real question is are they going to be lessons learned or lessons forgotten? What the lessons are remain to be seen. You see some of them already emerging.
One of the most important things to come out of this is that, I hope once and for all, companies elevate the role and importance of supply chain risk management. And what I mean by that is it has to move away from being this reactive, project-based type of initiative and really become a continuous business process.
For a lot of companies, some major disruption happens…a tsunami, the Japan earthquake…there’s all sorts of things that have happened the past 20 years and beyond. Usually a company feels the pain of some major disruption, they get a group of cross-functional people together to do a post-mortem and discuss what happened, what went wrong, what could we have done better, how should we change our policies and practices, what should we do differently moving forward…then a big report is written, gets printed out, put in a binder and put on a shelf.
Time goes on and then something like this [pandemic] happens, and everyone’s scrambling and taking those binders off the shelf and saying ‘Ok what happened last time? What did we do? What were the lessons learned?’ So it becomes a project and a one-off type of thing whereas to really do risk management correctly, it has to be an ongoing business process.
You should continuously be doing ‘what if’ analysis, continuously modeling and simulating your supply chain, doing assessments, and putting plans in place for if and when one of these scenarios occurs. You may not have all the answers, but at least you’ll have a starting point and will have thought through some of the implications of what could happen. Those are the companies that are most prepared today.
I don’t think anyone probably, in whatever ‘what if’ scenarios they put together, had everything right in terms of what’s unfolding right now, but those that are even 30% or 40% right and had plans in place relative to this — and maybe already made changes to their supply chain network, built some additional capacity, or dual sourced materials as a result of some of the synopses they’d done — those are the ones who are going to feel less of an impact and recover faster than those just starting from scratch today.
The big lesson learned, or what should be different, is risk management needs to be a continuous business process for companies moving forward. I’ve said in the past the discussion of risk has to be as common as the discussion of cost and services today.
Whenever supply chain decisions are made, people ask ‘What are the cost implications of this? What are the tradeoffs with service relative to this?’ But relatively few companies ask ‘What’s the risk?’ or ‘What are the risks involved?’ And that needs to become just as common as asking what are the cost and service implications.
The other thing is, and I kind of mentioned this already, is just the impact on people. I wrote about it today on Talking Logistics as part of our news roundup. With everything going on, we’re all working from home or many of us are, but many people can’t work from home — namely first responders, doctors, nurses and so forth. You also have all the truck drivers and warehouse workers that are keeping these vital supply chains moving like the food industry and medical industry.
People are still the lifeblood of this industry, the folks that are on the front lines of keeping supply chains running. A lot of times we overlook them. There’s so much talk about robots taking over and all this and that…hopefully this will refocus the important and critical role that people play in supply chains and will continue to play moving forward.
Whatever changes or plans we make for a future disruption or pandemic, we need to take into consideration these folks on the front lines today that are literally putting their health at risk in order to make sure we have food at grocery stores, and medicines at pharmacies, and materials keeping the economy running as best we can under this situation.
Right. Amazon this week announced they’re hiring 100,000 people because of the uptick in delivery demand because no one’s going out and everyone’s ordering stuff online. 100,000 people! Walmart announced they are hiring 150,000 for their stores. We can talk all about technology, and some would argue that if it weren’t for automation, Amazon would need 500,000 people instead of 100,000 people. But 100,000 people on top of the hundreds of thousands they already employ is a lot of people. We’re still going to have a lot of people. You have millions of truck drivers out there that, until driverless trucks become a reality which is not going to happen any time soon or we get teleportation, are critical to the economy.
Those folks don’t get a lot of love a lot of the time, and in times like this [pandemic], we give credit to doctors and nurses and those on the front lines from the health side of things. Those folks are putting their health on the line to take care of the ill and those affected by the pandemic, and are heroes from that perspective. But we have to think about truck drivers and supply chain folks on the front lines of keeping the economy running as heroes as well because they can’t afford to work from home, nor can they work from home.