Archive | Practice RSS for this section

21st Century Procurement Skills (Guest Post by Christoph Flöthmann)

Our guest post today comes from Christoph Flöthmann, an expert in strategic and digital procurement, who has recently co-authored a new report.

Digitalization already has a major impact on procurement, as we write in our new report: 21st Century Procurement Skills. Thanks to artificial intelligence (AI) and robotic process automation (RPA), process-mining tools can be used to reshape and analyze all kinds of processes. Dashboards, governed by analytics bots, help to detect and prevent maverick buying in real-time without any human input. This is ultimately driving procurement effectiveness, efficiency and compliance. However, the digital transformation can only succeed if procurement has bright talents with the right skills in place who steer AI and manage the remaining high-value-adding tasks: First, digital fluency is a new meta-competency that enables managers to reach their targets by being in command of digital tools. Second, the ability for complex and collaborative problem-solving will be key to master the challenges posed by both digitalization and uncertain markets. Because AI and RPA take over tasks that are rather simple and require a low level of human collaboration, the procurement professionals’ scope is about to shift to highly complex and highly collaborative tasks such as developing and approving category strategies. Finally, procurement needs transformational leaders that are able to empower their teams to strive for developing and applying their new skill sets.

Dr. Christoph Flöthmann is a consultant in Roland Berger’s Operations Competence Center. In 2018, he and his project team were finalists at the World Procurement Awards in London for developing and implementing a digital procurement strategy platform. Before becoming a consultant, he completed his Ph.D. at Copenhagen Business School and Kühne Logistics University, specializing in research on competencies and careers in supply chain management.

Understanding and Tackling Societal Grand Challenges through SCM Research

The Academy of Management Journal’s previous editorial team defined its term with a thematic emphasis on “grand challenges”, and called for research through editorials on a wide array of topics that explored global problems including climate change, aging societies, natural resources, societal resilience, digital workforce, digital money, and gender inequality among others, as well as methodological approaches with which to tackle them. They defined a grand challenge as “specific critical barrier(s) that, if removed, would help solve an important societal problem with a high likelihood of global impact through widespread implementation”. Certainly the most widely adopted grand challenges are the Sustainable Development Goals (SDGs) of the United Nations. Another example, not mentioned by the editors, are the planetary boundaries identified by Steffen et al. (2015). Following their emphasis, what could our discipline do to better understand and tackle societal grand challenges and maybe also in a more systematic way? Do we need to renovate our thematic and methodological portfolios? Some of these AMJ editorials can certainly be an inspiration for SCM research.

George, G., Howard-Grenville, J., Joshi, A., & Tihanyi, L. (2016). Understanding and Tackling Societal Grand Challenges through Management Research. Academy of Management Journal, 59 (6), 1880-1895.

The Digital Supply Chain Transformation

“Accelerating technology and automation are resulting in wholesale transformation of the supply chain profession.” This is the key message of EY’s new report, titled Supply Chain: Skills for the Digital Era. It is not long, but definitely a good read. The report states that “[p]rocesses with repeatable elements such as planning, monitoring and forecasting can all be automated and enhanced by robotics, artificial intelligence and advanced analytics”. The authors observe that this leads to a transformation of supply chain management: “Where performance improvement in the past may have focused on the optimisation of individual operational areas, it now needs to harness a broader view that understands, for example, how supply chain impacts on profitability.” The report ends by identifying four future personas for the supply chain, based on their mindset (data-driven vs. vision-led) and style (investigative vs. collaborative): There are technologists, orchestrators, analysts and innovators. Does our research and teaching cover all of them?

The Supply Chain of Tomorrow

It is time for a new video! Future Insights Network’s CEO and Co-Founder, Maria P. Villablanca, recently talked to me about the supply chain of tomorrow. Enjoy watching the video…

The State of Globalization in a Fragile World

DHL has recently released the fifth edition of their Global Connectedness Index, which provides an analysis of globalization, measured by international flows of capital, trade, information and people. In spite of growing anti-globalization tensions in many countries, the report indicates that globalization hits a new record high, as the aforementioned flows all intensified significantly for the first time since 2007. It is also found that the Netherlands, Singapore, Switzerland, Belgium and the United Arab Emirates are the most connected countries. Europe tops the regional ranking, while a group of Southeast Asian countries beats the expectations by the widest margin. “Surprisingly, even after globalization’s recent gains, the world is still less connected than most people think it is,” comments one of the report’s co-authors, Steven A. Altman. “This is important because, when people overestimate international flows, they tend to worry more about them. The facts in our report can help calm such fears and focus attention on real solutions to societal concerns about globalization.”

Balancing Efficiency and Resilience in Multimodal Supply Chains

In his new report, titled Balancing Efficiency and Resilience in Multimodal Supply Chains, McKinnon (2018) writes: “Over the past twenty years, supply chain resilience has become a hot topic in industrial, government and academic circles – for good reason. Business surveys and a mass of anecdotal evidence have revealed that supply chains have become more vulnerable to disruptions and the consequences of these disruptions become more severe. […] Despite this attention and research efforts, many companies are still at an early stage in the development and implementation of supply chain risk management strategies.” The author examines “how efficiency and resilience can be balanced in the management of multi-modal supply chains”. The author further “investigates the trade-off between supply chain resilience and efficiency, the approaches to sustainability in supply chain management, innovation and technological development, collaboration and alliances and risk mitigation”. The report summarizes findings from a Roundtable of the International Transport Forum held in April 2018. A call for papers deals with supply chain resilience.

McKinnon, A. (2018). Balancing Efficiency and Resilience in Multimodal Supply Chains. International Transport Forum Discussion Papers, OECD Publishing, Paris.

The Missing Link? EU Supply Chains after Brexit

The United Kingdom has been one of the key links in EU supply chains for more than 40 years. BBC Newsnight has recently reported on how Brexit could break that chain and what the consequences could be for manufacturers. I like the video and have used it for my Supply Chain Risk Management course to discuss this topic with my students.

The Beginning of the End of the “Extended Workbench”?

Exports can be decomposed into a foreign value added (FVA) and a domestic value added (DVA) component. FVA is a key measure of the importance of global supply chains. It refers to the imported goods and services incorporated in a country’s exports. DVA relates to the contribution of a country’s own (i.e. domestic) factors of production. The 2018 World Investment Report, recently published by UNCTAD, shows that “[f]rom 1990 until 2010, the share of FVA in total exports rose continuously, contributing to the growth in global trade” and, “in the past decade, for the first time in 30 years, the growth […] has come to a halt, with the share of FVA declining to 30 per cent in 2017”. But what are the reasons for a declining importance of the “extended workbench” model? First, the model is based on arbitrage; however, the economic success of emerging countries has led to an increase in labor costs. Second, manufacturing in high-wage countries is becoming increasingly profitable due to recent advances in robotics.

The Cost of a Five-Dollar Dress

Social responsibility has after the Rana Plaza collapse become an integral part of many supply chain management courses across the globe. However, workers’ rights in textile supply chains, or a lack thereof, are actually an old story, maybe as old as modern textile supply chains. This is evidenced by an article from 1933, titled The Cost of a Five-Dollar Dress. The article argues: “If your clothes’ budget has been cut down and you buy bargain dresses, it is only fair you should know who pays part of your bill—the women who made the dress.” It seems that, by moving from one location to another, the social problem of the textile industry has acted like a nomad. Apart from the location – then New York City, now Dhaka – not much seems to have changed within the last century. Still today, the real cost of a five-dollar dress is paid not in dollars or euros, but by the workers upstream in the supply chain with their safety and health condition.

Should We “Bulldoze” the Business School?

The Guardian has recently published an interesting article with a provoking title: Why We Should Bulldoze the Business School. The author writes: “[In] the business school, both the explicit and hidden curriculums sing the same song. The things taught and the way that they are taught generally mean that the virtues of capitalist market managerialism are told and sold as if there were no other ways of seeing the world.” The author demands “an entirely new way of thinking about management, business and markets” and argues: “If we want those in power to become more responsible, then we must stop teaching students that heroic transformational leaders are the answer to every problem, or that the purpose of learning about taxation laws is to evade taxation, or that creating new desires is the purpose of marketing. In every case, the business school acts as an apologist, selling ideology as if it were science.” To what extent does that also apply for our SCM courses?