Tag: covid_19

Man putting on surgical mask
Digital Supply Chain, Podcast

Digital Supply Chains and the impact of the #Covid-19 #Coronavirus – a chat with Richard Howells (@HowellsRichard)

It is early April 2020 and the world is in the middle of the Covid-19 coronavirus pandemic.

The contagion has hugely impacted supply chains, and in some cases supply chains have hugely impacted the contagion, stepping up to allow automobile manufacturers pivot to building ventilators, airplane manufacturers switch to 3D printing protective visors, and drinks makers start making hand sanitisers.  And that doesn’t even start to get into the challenges facing grocery stores maintaining stock levels.

In the midst of this Richard Howells wrote an excellent piece in Forbes titled Business As Unusual: Resiliency In Times Of Supply Chain Disruption examining how supply chains are coping with the outbreak so I thought I’d invite him on the show to discuss this and we had a fascinating conversation on the topic.

Click on the player above to hear our conversation and/or check out the transcript below:

 

Richard Howells [00:00:00] So there’s lots of areas where we’re seeing companies addressing short term challenges, but also looking at ways to rebalance their supply chains, moving forward and having risk mitigation strategies. I think supply chains will, if they don’t already in every business, will have a seat at the table of every business moving forward because they’re both an opportunity and a risk.

 

Tom Raftery [00:00:27] Good morning, good afternoon or good evening. Wherever you are in the world, this is the digital supply chain podcast and I am your host, Tom Raftery.

 

Tom Raftery [00:00:38] Hi, everyone, welcome to the Digital Supply Chain podcast. My name is Tom Raftery and with me on the show today, I have Richard Howells. Richard, would you like to introduce yourself?

 

Richard Howells [00:00:47] Hi, Tom. So I work for SAP in the area of digital supply chain and I spend a lot of time writing about business challenges, trends and opportunities for supply chain executives.

 

Tom Raftery [00:01:00] Yeah, you write a lot of stuff on Forbes as some great some great articles. And you wrote one because, you know, we are; this is, what, the second of April 2020, we are in the middle of a global pandemic. The Covid-19 Coronavirus virus pandemic. Today is the day that we are going to reach 1 million people infected and 50000 dead. And, you know, it’s presenting a lot of challenges. And you wrote a blog post about this on Forbes called Business as Unusual Resiliency in times of Supply Chain Disruption. And you made some, you know, great points in that and talked up some interesting stories. So I thought it’d be cool to have you come on the podcast, because, you know, this is a supply chain issue big time globally. And you address a lot of those challenges there in that article. So would you like to talk a little bit about that?

 

Richard Howells [00:01:53] Sure. So, I mean, I start I started the article off about talking about some of the challenges from a supply chain perspective that this pandemic has caused. I mean, it’s hard to believe that when we were celebrating New Year’s Eve for three months ago that this didn’t was a figment of wasn’t even a figment of anyone’s imagination. We couldn’t believe that we’d be been this case three months later. And what’s happened is that I mean, we’re seeing supply chain at the centre of everything at the moment. It’s both the challenges in some cases and the opportunities in others. I mean, when we started off with the issues in China, it considered it created a huge supply issue because China is the manufacturing factory of the world. So when you’ve got uncertain supply of critical materials, it has a knock on effect throughout the whole world. And then as the pandemic spread, so did the demand volatility as people started panic buying. I mean, we’re seeing huge demand for medical equipment, medical devices and of of of key products from a from a consumer goods standpoint. And the demand for luxury items and discretionary items is nonexistent. Now, it’s amazing to me that we are reliant as a globe now on 20 or 30 items that everyone’s looking for in the stores and… toilet paper of all things, who thought there would be a rush on toilet paper.

 

Tom Raftery [00:03:23] I think that was a I think there was a social media thing more than anything else, because I went to I we had our lockdown announced on the 14th and I went to their local supermarket and there was plenty of toilet paper. What was missing was all the meat. The meat counter was stripped bare. Now that was fixed in a matter of a couple of days. It was a supply chain issue again. You know, they didn’t anticipate that big demand, but they and they got it fixed in a couple of days. So there aren’t any shortages here. There are sometimes if you go to the shops, there might be a short term shortage of an individual brand, but not of that, not of the class of goods.

 

Richard Howells [00:03:57] And I’m based in the US. And we’ve still got I mean, you’re you’re a few weeks ahead as far as the pandemic is in in Spain. And we we still have shortages. And those shortages are now because of capacity constraints. There are shortages because we don’t have enough manufacturing capacity to increase the production of toilet paper, for example, which was running at full production anyway. And we’re having logistics challenges of getting goods from point A to point B. What if they’ve got to come from foreign foreign ports or foreign countries? There’s no transport that the flights are down by 80 plus percent. Some of the ports are closed or there’s less or less capacity going through it. And then we’ve got the challenge of drivers and the risk that those drivers are taking without the proper security and humanitarian coverage. And that’s the final challenge I think we see from this at the moment, is that humanitarian risk, the balance of of labour shortages, but also of ensuring the health and safety of employees who are doing the vital jobs, who are doing the “required jobs”. How we’ve changed manufacturing processes, for example, where there can be less people on the plant floor. So to make sure that we’ve got the social distancing during working environment, working processes and working environments as well.

 

Tom Raftery [00:05:22] That’s going to be a huge challenge for manufacturers. I mean, they they’ve set up their manufacturing lines in a particular way. And to your point now, they have to do social distancing between the employees and the floor and just for health and safety.

 

Richard Howells [00:05:33] Yes, it’s it’s it’s things that you wouldn’t think about in normal circumstances, I’m sure it’s never been thought through as a as a plan of how to do this. And people are having to come up with solutions literally on the fly.

 

Tom Raftery [00:05:47] I went grocery shopping yesterday just for the second time since lockdown because the grocery shops are tending to push us towards online deliveries and in the grocery stores now, they have markings on the floor to say where you should stand when you’re in a queue for the checkout counter you know, and there is, you know, two meters between each mark so that you’re two meters behind the person in front of you. You know, again, for social distancing and they have to have a glass Perspex barrier between you and the person at the checkout counter, which was never there before. And again, it’s just to protect the employees from potential infection from shoppers. Yes, and vice versa, I suppose.

 

Richard Howells [00:06:27] Is that just they’ve just started introducing in some of the stores here one way systems around the supermarkets as well, which I haven’t seen up until now in the US.

 

Tom Raftery [00:06:36] Wow, wow, wow

 

Richard Howells [00:06:38] And we’re seeing lots of repurposing as well of manufacturing. I sent you a link this morning to the Airbus plants here in Spain. I mean, Airbus have several factories here in Spain and they have over 20 3D printers because they I mean, they were they were the first commercial airline company to use 3D printed parts and commercial flights back in, I think was 2015. So they’ve been playing a lot and working a lot after playing working a lot with 3D printers. And now they’ve turned that around into using those 3D printers to make the Perspex masks that the health workers, the health care workers are using to keep themselves safe when they’re dealing with people who are very sick. Actually, there’s a there’s a consortium that I’ve seen online of 3D printing companies who are sharing the designs of these 3D masks for that very purpose that they’re crowdsourcing and sharing the information. And we’re also seeing other companies doing some similar things. I mean, I read about Medtronic’s are opening up, or making that does the designs of their ventilators so that they’re simple ventilators, their basic line of ventilators open to other people so that they can manufacture those ventilators. And they’re also partnering with with Tesla to to to increase their production. You’re you’re seeing automotive companies becoming outsourced, manufacturers for medical device companies to increase the production, because there’s a lot of very small ventilator manufactures that just can’t scale.

 

Tom Raftery [00:08:15] If I had said that to you in December thirty first, that the car companies would be making ventilators in April of this year, you’d said, Tom, you’re smoking crack.

 

Richard Howells [00:08:24] That’s exactly what happened. Yes. And they’re becoming the contract manufacturers rather than working with lots of contract manufacturers for their parts.

 

Tom Raftery [00:08:31] So how do they how are these automotive, for example, companies sourcing the parts to manufacture these ventilators? How would that work?

 

Richard Howells [00:08:40] Well, that means that that means having improved visibility across the supply chain. I mean, first of all, I mean, SAP is doing a lot of work in providing offers to our customers to access some of our, some of our systems in these times of need and mapping, mapping the visibility of where the suppliers are that have the inventory with your demand and in-building and having visibility across the network of that is a huge, huge first step. I mean, I would imagine that there’s as I said, there’s a lot of partnerships going on. The also the the the the medical device manufacturers will be sharing their partner information and their supply information and supply sources to satisfy that demand for additional materials that these companies may never buy. I mean, we’re seeing other examples. We’re seeing perfume manufacturers and liquor producers making hand sanitizers. I mean, at the moment, the medical device, medical companies need three or four sections of things. They need we need they need the public to have and they need hand sanitizers to reduce the spread of the virus. They need the masks, the testing equipment and the robes for testing people and treating people. And ultimately, in the worst case situations, they need ventilators and an unparalleled amount of ventilators to actually treat the most critically ill. And companies are coming together to help support that. As I said, I mentioned the hand sanitizer example. We see the ventilator example with car manufacturers. We’re seeing other companies. Another one of our customers, actually Decathlon are are repurposing this, their the devices for their breathing, snorkelling devices and adapting them to be ventilators, working with with partners to adapt them to be ventilators. So we’re we really are thinking out of the box and and building partnerships that you wouldn’t have seen. And it’s it’s actually good to see companies coming together to solve solve some of these problems.

 

Tom Raftery [00:10:45] I came across a thread of tweets a couple of days ago and again this morning because someone else tweeted, not me, where it was. I think a psychologist talking about how in times like this, people are afraid that there’s going to be a breakdown of social order. Whereas in fact, in times of crisis like this, it seems to bring out, in fact, the best of us, the likes of the people in New York in 9/11, all coming together to help each other out. And, you know, we’re seeing it again in this situation where rather than, you know, everything falling apart, in fact, we’re getting to your point, unprecedented partnerships between businesses that would never work together before, to try and all come together to produce the goods that are in short supply.

 

Richard Howells [00:11:31] Yes. I mean, you see it at a personal level with with neighbours helping other neighbours. And we’re seeing it at a business level as well at a larger scale. And it’s it’s good to see. But the wrong circumstance. Wish we didn’t have to see it, but it’s good to see when it does happen.

 

Tom Raftery [00:11:47] Richard, what are some of the strategies that companies are coming up with to address this situation?

 

Richard Howells [00:11:53] Well, what we’re seeing across all areas of the supply chain, different, different needs and different strategies. If we start at the basic level over the last 10 to 15 years, we’ve stripped a lot of cost out of the supply chain. We went to a global supply chain to reduce the cost of raw materials. For example, we’ve outsourced a lot of our manufacturing to have cheaper labour. And this has done a great job in cost reduction. But it’s also increased the risk involved, which… Exactly, it’s coming home at the moment as a huge cost implication and a customer service implication. And in the short term, I think we’ve got to work out where the from a supply standpoint, where the inventory is, how can I access that inventory? Which which partners do I have that already have it? Which other companies have available inventory that I can source? How do I get the goods to the right place, to the hotspots when we’re talking about medical supplies to the to the areas with the most shortages? When we talk about supermarkets, we’re seeing so so alternate sourcing strategies are one of the areas in the short term that I see a lot of supply chains looking to to solve. Also, where to position inventory in a in a global supply chain. I can’t be totally reliant on having all my finished goods being shipped and it takes a week for me to get the finished goods. I need a source of inventory of finished goods locally. We are seeing a lot of companies start thinking or will be thinking a lot about the balancing of offshoring versus near shoring versus on shoring, even though it may cost more to manufacture locally, but you need that to reduce that risk. The whole area of employee safety, of ensuring you have the environmental, health and safety processes in place to ensure the safety of your people working on the plant floor. The people working in the distribution area and and and your customers safety of making sure that the products are of good quality and having visibility of demand, I think is critical. I mean, this may be a case. It’s taken a long time to for the retailers to share the point of sales information with manufacturers. Now is the time to share that information. We need to know where we have shortages. We need to know what is going off the shelves, although it’s pretty obvious what’s going off the shelf as a consumer. But maybe the manufacturing companies could have had advanced information of that to get more goods of the right sort to to the to the retailers that needed it the most. So there’s lots of lots of areas where we’re seeing companies addressing short term challenges, but also looking at ways to rebalance their supply chains, moving forward and having missed risk mitigation strategies. I think supply chains will if they don’t, already in every business will have a seat at the table of every business moving forward because they’re both an opportunity and a risk.

 

Tom Raftery [00:15:03] Yeah, absolutely. And so that that brings up a good point. Where do we go? Post pandemic? You know, in whether it’s six or 12 or 18 months time, what is the supply chain world going to look like?

 

Richard Howells [00:15:18] Well, I mentioned I think we’ll have still have global supply chains, but maybe with local execution we will be balancing our inventory so that we keep a certain percentage of inventory locally. We will be balancing our manufacturing, outsourcing vs. and offshoring to to maybe doing some of the manufacturing ourselves and at least having it local, local manufacturing capabilities and capacities. I think that we will not be reliant on single sourcing strategies. We won’t put all our eggs in one basket. We will we will have multiple suppliers to provide the same critical the critical components that we need and balance that. Maybe we work with one but 20 percent and 80 percent with the other at the moment, but have the ability to switch so that you can go to local sourcing as and when required. And it’s going to cost a little bit more, but it will reduce risk. And I think sustainability actually will be a huge thing moving forward. I mean, it should be a huge thing anyway. But we’re seeing the in the environmental impact of this pandemic is actually a positive impact on the globe. We’re seeing less pollution in certain areas and we’re seeing cleaner waterways due to lack less less distribution and fumes being put into the atmosphere. And I think that as companies start to think about how they are global but execute locally, that will reduce the carbon footprint of our supply chains automatically. But we also want to ensure that we we are still sourcing ethically, that we are having good labour manufacturing environments to work in for working conditions and we are designing sustainable products and recyclable products for the good of the planet anyway.

 

Tom Raftery [00:17:22] I actually have a very practical example of that. I have a personal air quality meter. It’s made by a company called Plume. Plume Labs. It’s called a Flow air quality meter. It’s it’s a device you wear on your belt loop or somewhere like that. And it measures five different air quality indices. There are things like VOCs which are, you know, volatile organic compounds, NOx, pm 1, pm 2.5, and pm 10, that’s particulate matter at different sizes. And it has an app which comes with the phone, which syncs with the phone. So it matches up the air quality, which it measures once every minute along those five measurements. It synchs that with the G.P.S. coordinates and then uses mapping data to give you a map of the air quality for everywhere you’ve been for 24 hours a day, seven days a week, 365 days of the year, etc.. So, I only get out of the house now to walk the dogs because we’re on lockdown and walking the dogs is literally the only… Well that and grocery shopping, you know. But what of the groceries are, you know, online deliveries? So just walking the dogs. I used to walk the dogs anyway before the lockdown. So I have before and after data for the air quality where I live and for the walk that I take every day. So I’ve perfect A.B data and these the the difference in air quality between, you know, before the lockdown and since the lockdown is just amazing. And even even before the lockdown, you know, I used to in presentations talk about this, talk about, you know, you get air quality in one area, which is terrible and in another area, which is better. But it’s not just it’s not just it’s not just a question of where. It’s also a question of when. And what I mean by that is… Rush hours? Yeah, exactly. The the I used to take the dogs out for a walk in the morning and the evening and in the morning it was, you know, just before 9:00 a.m. and I’d be walking past a local school. And of course, all the SUVs would be outside the school as the parents were delivering their kids. I’d walk past the same school at eight o’clock in the evening and there wouldn’t be a car from miles. And the air quality difference between those two times a day for the exact same place was incredible. But now that there have been almost no cars driving by there in three and a half weeks, it’s it’s flat. You know, there’s almost nothing there at all. It’s just like almost it’s not it’s not exactly zero across all five measurements, but it’s close enough.

 

Richard Howells [00:20:15] And it’s interesting, using personal devices like that would be a great way of getting the information across the globe or the country. You know, about how that has improved because that information is is stored centrally in the cloud some whereand that information can really add value. And that’s another example about that. We’ve been seeing this in the news about we we can see where the hot spots are and where that they’re reducing a little by people who were using electronic temperature. That’s right. The company has visibility across the North America at the moment of the temperatures are coming down in certain areas, which implies that people are getting a little healthier in those areas or the pandemic isn’t as is reducing in some of those areas or increasing as the case may be. Saw that. That’s fascinating. A type of information from Smart Assets is very valuable in today’s climate and it’s very valuable from a business perspective moving forward as well.

 

Tom Raftery [00:21:17] It is. And the company who make that air quality meter know that, they’ve been mapping air quality across cities globally since they started. It was a, you know, one of the one of the business drivers of creating the air quality meters. Richard, we’re at about 20 minutes. We’re just over 20 minutes. So we’re coming towards the end of the podcast. I like to keep it about the 20 to 25 minute mark. Is there is there anything else that we haven’t touched on that you think that we should have?

 

Richard Howells [00:21:44] I think we’ve covered most of the topics or all the topics, I think. I’d just like to. I hope that everyone stays safe and adheres with the different mandates and guidances from the different governments around the world, and hopefully the next time we we do a podcast Tom, we’ll be talking about in happier times and about happier subjects.

 

Tom Raftery [00:22:05] I hope so. OK, everyone, thanks a million for your interest. Richard, thanks for coming on the show. And to everyone who’s listening. Stay happy. Stay healthy. Stay safe. Stay sane. Because, I mean, you know, we’re on lockdown right now. It’s very easy to kind of go a bit out of your head, do stay sane.

 

Richard Howells [00:22:24] I’m not sure if I can do that.

 

[00:22:30] OK, we’ve come to the end of the show. Thanks, everyone, for listening. If you’d like to know more about digital supply chains, head on over to SAP.com/digitalsupplychain or simply drop me an email to Tom Dot Raftery at SAP dot com. If you’d like to show, please don’t forget to subscribe to it in your podcast application to get new episodes right away as soon as they’re published. And also, please don’t forget to rate and review the podcast. It really does help new people. To find the show. Thanks. Catch you all next time.

And if you want to know more about any of SAP’s Digital Supply Chain solutions, head on over to www.sap.com/digitalsupplychain and if you liked this show, please don’t forget to rate and/or review it. It makes a big difference to help new people discover it. Thanks.

And remember, stay healthy, stay safe, stay sane!

Martin Barkman profile pic
Digital Supply Chain, Industry 4.0, Internet of Things (IoT), Podcast

Digital Supply Chain, Industry 4.0, and the Covid-19 Coronavirus – a chat with Martin Barkman

We are in a very strange times! On this third Digital Supply Chain podcast on the theme of Industry 4.0, I had chat with Martin Barkman. Martin is an SVP and the Global Head of Solution Management for Digital Supply Chain at SAP, so I was keen to have a conversation with him about that, but the conversation went a bit off track!

With all that is going on in the world right now it is difficult to avoid talking about the current Covid-19 coronavirus pandemic which has turned all of our lives upside down. So, despite not intending to, our conversation quickly veered into a discussion of the implications of the coronavirus contagion, and its effects on supply chains, manufacturing, and ourselves.

This is an extremely topical podcast, which ends on a positive note. I hope you find it useful.

Listen to the podcast using the player above, and/or see the full transcript below:

Martin Barkman [00:00:00]   The first thing that I think in in times like this organizations have to understand this is what is my what is my supply? Where do I have products? Can I get the product? Am I relying upon regions that are even more hard hit by the particular crisis and whether it’s this viral situation or just in general I think companies are rethinking making sure that they have alternative sources.
Tom Raftery [00:00:29] Good morning. Good afternoon or good evening. Wherever you are in the world, this is the Digital Supply Chain podcast and I am your host Tom Raftery.

 

Tom Raftery [00:00:39] Welcome to the Digital Supply Chain podcast. We are in the series themed around Industry 4.0 and my special guest on the show today is Martin. Martin, would you like to introduce yourself?

 

Martin Barkman [00:00:52] Absolutely, Tom. And thank you for having me. I am Martin Barkman and I head up solution management for SAPs digital supply chain area based in the United States and super excited to be here talking to you today.

 

Tom Raftery [00:01:08] Thank you. Thank you, Martin. so, digital supply chain and industry 4.0. How are they connected?

 

Martin Barkman [00:01:16] It’s a great it’s a great question. I mean, there’s a lot going on with supply chain today. Obviously, the topic at the moment is everything the world is doing to mitigate the effect of this virus. But even before the virus, supply chains were becoming more prominent and more central to the conversations in company boardrooms and frankly, even amongst consumers. Geopolitically, we saw things like trade tariffs, and regulations coupled with uncertainties around the exit of Britain from the United, from the European zone. All of these put pressure on companies supply chains. And then at the same time, you also have consumers that are pickier and have more desires than ever before.

 

Martin Barkman [00:02:15] Whether it’s the personalization of products or even the speed…

 

Tom Raftery [00:02:21] They’ve been spoiled, consumers have been spoiled by the likes of Amazon who are now giving them deliveries same day and even, you know, sub-hour times and things like that. so, that’s gotta put huge pressure on supply chains as well.

 

Martin Barkman [00:02:32] Yeah, it’s interesting. So, you have governments, you have individual consumer. And then there’s this underlying thread around topics of sustainability. You know, consumers are starting to figure out that having the delivery truck come to their house many, many times every day maybe isn’t the most sustainable option. So, we’re seeing a convergence of a lot of these global trends, consumer trends, and it’s converging around the supply chain. And so, how do you set up a supply chain that can really accomplish all of this in a fundamentally different way? You asked about Industry 4.0, and it’s an interesting term. It actually originated in in Europe many, many years ago. And it was primarily focused around the automation of the factory or the plants. Now we’re seeing the concepts actually extend to the entire supply chain, to the assets that are deployed throughout the supply chain, all the way to the way distribution and logistics is handled. And it’s all about using technology and data to fundamentally change and take a step change in productivity. Other times it’s called industrial Internet of Things, so, I just wanted to throw that out there, that that’s also a term that’s often used.

 

Tom Raftery [00:03:52] Sure, sure. And I mean, we’re not going to harp on the whole Coronavirus thing because, you know, there’s lots of other people talking about that. And, you know, people better, better informed than us. But things like that are going to be putting huge pressure now, you gonna think on supply chains. I mean, particularly there’s going to be a huge increase in the requirement for logistics as more people, you know, stay at home and have a requirement to have things delivered to their home. so, that that’s going to that’s going to change the logistics industry. It’s going to grow the logistics industry, and it’s going to completely you got to think change how a lot of supply chains are organised.

 

Martin Barkman [00:04:31] Yeah. No, no, no doubt. And it is it is absolutely the topic of the day and what companies are focusing on. I mean, you know, the first thing that I think in in times like this organizations have to understand is what is my what is my supply? Where do I have product? Can I get the product? Am I relying upon regions that are even more hard hit by the particular crisis and whether it’s this virus situation or just in general, I think companies are rethinking, making sure that they have alternative sources identified. They understand the implications of those sources.  They have the ability to switch and shift order volumes from one, one to the other. You know, so. That that I think is kind of step one in a time like this, of course, with that comes also an understanding of where you have inventory in the supply chain and how can you use that inventory to ultimately create new finished goods and move those finished goods to the point where they are most, most desperately needed. I think at the same time, demand is is really, really changing. We’re seeing spikes in demand for products that are absolute critical.

 

Tom Raftery [00:06:01] Toilet Rolls?

 

Martin Barkman [00:06:01] Whether it’s. But it’s not just I mean, it’s paper products in general. Right. Diapers and such. Certainly, in personal hygiene products. I mean, right now, Amazon is prioritising the delivery of those to consumers at the expense of maybe some products that are not deemed to be quite as urgent. I think for companies, what’s critical is understanding, you know, just by how much and where and to what degree demand has changed, because ultimately that picture has to be you have to form the unified picture of demand and supply and ultimately how you how you solve for that. so, you want to get your arms around. So, I yeah. This is a you get your arms around that. That demand certainly part of the supply picture is also the capacity. And you mentioned people are now working from home, certainly in some professions that’s a possibility. In professions like running a manufacturing operation, that’s not always the case. The customers we have that I’ve talked to are trying to keep these critical plants up and running plants that are involved in producing products that are more needed now than ever before. But the method in which you do that right, the way you run your shifts, the way you inform and encourage people to work when they are on the shop floor is different. Right. We can’t stand shoulder to shoulder anymore. We have to maintain the social distancing even in the workplace. so, I think its capacity, its inventory, its supplier and supply and its demand and forming that picture and understanding also what is it saying I need to do today? But what are the what ifs and the scenarios? We live in an extremely dynamic environment. so, this week is fundamentally different than last week. so, whatever I thought was my plan last week, it’s very likely that that plan now needs to change. so, I need an environment and an ability to rerun those scenarios very, very effectively. Once I choose a scenario and I say, OK, this is the one I’m going to operate, that, how do I put it into action all the way down to planning the transportation and understanding how to get it ultimately to the end consumer?

 

Tom Raftery [00:08:29] And demands have got to be swinging wildly as well at the moment. I mean, we talk about people working from home. That’s going to mean a huge drop in demand for, you know, petrol, diesel those kinds of fuels to get people to and from work. And on the other hand, there’s going to be a huge uptick you got to think and demand for things like webcams so, people can more effectively work from home.

 

Martin Barkman [00:09:00] Yeah. so, it’s interesting right now, I think we’re all trying to come to grips with what is the the new…the drop in, you know, what is the the drastic change in demand, and as I mentioned earlier, how do companies get their arms around that? But soon we will have to start to plan for the recovery. Is the recovery going to be like the letter V, where it’s a sharp drop and then a sharp rise, is it going to be like the letter U where it’s a drop and then it’s a period of really, really low band in general, but then an uptick. Or frankly, it’s almost gonna be like the letter L you know, the classic where we’re gonna be at a low point of demand for quite some time and then maybe we see a gradual, slow recovery. And the answer is, of course, we don’t know, and it may actually differ for different products. I also think we have to think about the possibility that when we emerge from this, yes, things will be fine, but they will be different. Right. so, if you think back to the 9/11 crisis, we started to fly again, but airport security was fundamentally changed. Will our way of working be fundamentally different when we emerge from this crisis? so, we have to understand how we will emerge and what the scenarios are so, that we can plan accordingly. But then let’s not assume that everything returns to the way it was. It may not be for certain parts of the economy or for certain industries or for certain types of products.

 

Tom Raftery [00:10:57] And how do companies plan for that?

 

Martin Barkman [00:11:02] Yeah, I think…

 

Tom Raftery [00:11:07] The 64-million-dollar question?

 

Martin Barkman [00:11:08] Yeah, look, I mean, you hear it said every day. Right. These are unprecedented times. Companies that have a good handling of their data, of their information and they’re able to bring it into one environment where they can run these scenarios. Not to pretending that they know exactly what’s going to happen, but they can say, you know what, if this happens, what if we have a quick recovery? What if we have a prolonged recovery? What if they make some more of our products coming out of the recovery maybe is a little bit different? What if a part of the world relapses later this year and the epidemic comes back in a limited form? so, I think companies that have that kind of digital environment are going to be able to plan these different scenarios. They may not know, but they can certainly weigh the different options. But I also think it’s interesting. Right? so, Industry 4.0 if we over time, are able to automate and run more critical parts of the supply chain in an autonomous or perhaps in a remotely controlled way. And this is already happening. I mean, I’ve been to see many production operations. You know, the people there are operating them behind a glass wall or in the case of milling and mining, significant parts of the operation might be controlled in a control centre that’s located hundreds of miles away and then using cameras and digital infrastructure they’re able to control the equipment. The interesting thing about that is when the next pandemic, and I hate to even say it comes, supply chains might be able to operate more autonomously, because people are not necessarily working and standing right next to each other. It’s not that we have eliminated the need for people completely, but we’ve eliminated the need for people to stand closely together performing the tasks and potentially risking their safety as a result.

 

Tom Raftery [00:13:38] so, Martin, I think one of the most important things at this kind of time is transparency in supply chains. Can you talk a little bit about that for us?

 

Martin Barkman [00:13:48] Absolutely. And it’s really interesting because supply chains almost by nature, right? You think everything happens in sequence from one step to the other it’s very linear oriented, and in many cases, it is, right? You start with a but raw material and you convert it into something that you ultimately distribute and sell. However, that’s a very simplified view. And what has been happening already is supply chains are becoming more networks. Right? so, you source raw materials more through a network, in many cases. Your manufacturing setup is a network. You have your own manufacturing sites and you have the ability to go out and work with contractors in a network type of capacity. Transportation. Same thing. You source transportation through a network and you work with a network of providers. And as a result, the supply chains are actually becoming less linear and sequential and more networked. Now, more than ever, visibility of what’s happening in your supply chain is very important. And because it’s more networked, you need the visibility through your network. so, you need to understand. Not just what’s happening within the four walls of your supply chain, but within your supply chain network. so, this is a topic that was already becoming important. I think now more than ever, it’s of upmost importance. Companies are setting up, you know, war rooms and crisis management centres to understand how to maximize their ability to serve their customers. And of course, information and visibility are very, very key to that. Now, beyond this pandemic, there are other cases where having visibility is very important. What if there’s a product recall? How do I ensure that I can trace the source of the recall or the cause of the recall through my supply chain and remove the product that is subject to the recall without overdoing it, without removing a product that does not have to be subject to the recall. so, there there’s just a lot of ways in which this connecting everything and then having that be rendered simultaneously more closer, if not real time. It’s becoming very, very important.

 

Tom Raftery [00:16:23] And for organizations who are in the throes of this right now, I mean, what would you advise them to do if they haven’t got the kind of transparency that they need or if they are starting on that project or if they’re even if they’re in that in that project and they’re looking to increase their  visibility into their supply chain where we’re should. What should they do? What kind of steps should they take?

 

Martin Barkman [00:16:51] Yeah, it’s hard to think of a one size fits all, but. There’s a good chance that there are some pockets of places in their supply chain where the information resides digitally. Sometimes that could be very large pockets, large repositories. I would say an initial key step is assess what is the digital environment you have? What are the existing tools you have in place and look for ways to activate elements of those tools that maybe you haven’t otherwise activated. So, for example, we have customers that are running the SAP integrated business planning application to do the scenario analysis that I talked about earlier. It has inherent capabilities for things like visibility. We call it the control tower. Ensure that you’re leveraging those capabilities to the fullest, which in some cases, if you aren’t, isn’t a big undertaking to go do.

 

Tom Raftery [00:17:53] Okay.

 

Martin Barkman [00:17:55] And certainly that’s something that that companies can consider.

 

Tom Raftery [00:18:00] All these things are kind of on a curve so, they can move kind of further to the right on the curve to increase their visibility, you’re saying?

 

Martin Barkman [00:18:07] Yeah. I mean, it’s a matter of time too, right? And, you know, are there quick wins that can be attained right now? At some point, companies may look to say, you know, how do we how do we take a step change in our in our digital environment, in our infrastructure, so, that we can do this on an ongoing basis, not just when a pandemic comes across, but frankly, sometimes you see a spike in demand that you hadn’t forecasted. You would like nothing more than to meet that demand. But you don’t know if you can or what it would take to meet that demand. so, you need to be able to run these plans and rerun the plans more often. You know, that’s the kind of capability that I think companies at some point are going to start to say, you know what, it makes sense to pursue that.

 

Tom Raftery [00:18:53] Excellent. Martin, we’re coming towards the end of the podcast now. We’re at about 18 minutes, 19 minutes into the into the podcast. Before we end up before we finish up, is there is there any question that I have not asked you that you think I should have?

 

Martin Barkman [00:19:14] I perhaps one thing we should conclude with is, you know what what is, pandemics aside, if we allow ourselves the luxury and the pleasure of removing that that new lens just for a second, maybe what is on the other side? And what do we think is is of utmost importance to companies? And I’d just like to talk about that, because I think we have to allow ourselves the ability to think in those terms, right? For the future and to us and what we see from our customers is supply chain is moving increasingly, from a pure back office function to something that’s at the at the boardroom level, very much part of the discussion. And the reason is we are moving into an era where it’s all about the experience economy, meaning what is it that customers want to experience when they do business with you? What is it that your employees want to experience when they go to work? What is it that your shareholders are looking for you to accomplish right in your community? Same thing with the environment. And we think that’s very exciting for those of us that are passionate about supply chain, because how can you accomplish something on all those axes and on all those vectors without a really, really comprehensive approach to supply chain management, right? What is the point of selling a product that’s marketed well, if in the end the product doesn’t meet customer needs from a quality and functionality standpoint? What is the point of having the most perfectly manufactured product with all the bells and whistles if in the end it’s delivered late to customers? so, the supply chain is what brings that ultimate experience very much together. And we see companies making investments in supply chains in ways that traditionally wouldn’t have been wouldn’t have been thought of. And it’s so, that the supply chain can help the company be successful in the experience economy. And we think that’s exciting and we think that’s very much on top of minds of companies right now, maybe a little bit further back of their mind, given the urgency, but nevertheless, something that absolutely has to be continued to be addressed.

 

Tom Raftery [00:21:57] Excellent, excellent, excellent. Martin, if people want to know more about Martin or about supply chains or about business planning or any of the above, where would you have me direct them? I’ll put some links in the show, notes in the description, this podcast so, you just tell me what to put in there.

 

Martin Barkman [00:22:17] Sure. Let’s assume they want to know about supply chain more so, than they know about me. Certainly, I’m on LinkedIn. But for for supply chain and what we’re doing at SAP, I would invite everyone actually to go to SAP.com, and in there we have sections for supply chain management. We have a lot of interesting content of what we’re seeing are the big trends and what companies are doing. And we have a lot of testimonials from companies with whom we work. And I think that’s an exciting place for people to start to learn more.

 

Tom Raftery [00:22:55] Super, super. Martin, thanks again for joining us on the show today.

Martin Barkman [00:23:01] Thank you so, much. It’s a pleasure.

 

Tom Raftery [00:23:04] OK. We’ve come to the end of the show. Thanks, everyone, for listening. If you’d like to know more about digital supply chains, head on over to SAP.com/digitalsupplychain or simply drop me an email to Tom.Raftery at sap.com. If you like to show, please don’t forget to subscribe to it in your podcast application to get new episodes right away as soon as they’re published. And also, please don’t forget to rate and review the podcast. It really does help new people to find the show. Thanks. Catch you all next time.