The importance of the supply chain during the COVID-19 crisis

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Chris Tyas, Chairman, GS1

When we interviewed supply chain expert Chris Tyas a few weeks prior to the COVID-19 pandemic, we had no idea that his 40 years of experience and knowledge in the consumer product goods (CPG) industry would soon have a profound impact on the supply chain and efforts to keep supplies flowing during the COVID-19 crisis in the UK.

The British Government asked Chris to oversee Britain’s food supply chain and address COVID-19 supply chain challenges. Chris, who spent the previous 36 years of his career at Nestlé, the largest CPG company in the world, was named as the Germany, Austria and Switzerland (DACH) region’s top-ranking Supply Chain Executive in June 2018, and before the crisis hit, was focused on utilizing his experience as Chairperson at GS1 UK.

When he visited SAS World headquarters in Cary, NC earlier this year, Chris shared seven insights from his 40-year career in CPG – insights that are critical for businesses trying to manage the supply chain during the current crisis:

1. Technology alone can’t create innovation

“Technology takes creativity, and it takes perseverance to secure a tangible benefit,” said Chris. “For example, we often hear that data is the new oil. But oil alone isn’t valuable. It must be refined into petroleum.  And so must data be refined into information and that takes knowledge, creativity and perseverance.”

Chris’ comment couldn’t be truer now that CPG companies are scrambling to uncover actionable insights into how consumers are changing their demand patterns during the ongoing COVID-19 crisis.

2. Artificial intelligence (AI) is changing the nature of supply chain

“Artificial Intelligence is changing the nature of supply chain and value chain management,” Chris said. “It’s enabling professionals to focus much more on making decisions rather than processing information and in doing so it’s making the jobs more interesting and more rewarding.

AI and machine learning (ML) are now playing a key role in addressing the COVD-19 pandemic by helping identify changing consumer patterns.

3. Scaling analytics across the enterprise

Chris revealed his secret for success in scaling analytics across the enterprise at one of the largest food and beverage manufactures in the world. His advice? Go broad rather than deep to make analytics the way you do things everywhere, in developing countries as well as in highly developed markets. “It’s easier to focus resources on doing in depth projects in developed markets with already highly skilled people, but that broad rather than deep approach has provided the foundations that now allow for more in-depth follow up,” said Chris. “As a result, the house is now better built and more secure for the future.”

As Chris described, analytics help find new patterns in supply chain data daily, without needing manual intervention. It’s invaluable in guiding companies on how to respond to the rapidly shifting dynamics of COVID-19. Algorithms iteratively query data, with many using constraint-based modeling to find the core set of factors with the greatest predictive accuracy to address the changing supply and demand patterns. New knowledge and insights from machine learning will also play a key role in revolutionizing supply chain management during the new normal.

4. Show the facts

“The key to gaining support for analytics at every level was the move to fact-based decision-making,” Chris said. “I had a phrase I often used: ’A number always kills an opinion,’ and that became the lynchpin of our argument. Through that we had business backing and a business-based approach for analytics.”

5. The future CEO will come from supply chain

“The leaders of business have always come from the functions most critical to changing business,” said Chris.

“Today, corporate value is increasingly driven by the volume of satisfied and repeat customers. Just think how many times you’ve been asked to complete Net Promoter Score surveys in your personal life. Organizations like Amazon have increased the expectations that we have as consumers. The pressure to get the right product to the right place at the right time at the right cost is even higher than it has been before. The people who turn that big picture into executional reality are supply chain leaders. This is increasingly the case as value chains become more network based. We’re in an age of instant gratification and as a result, board members are increasingly turning to those executives who can change strategies into executional reality, just as they have in Apple for example.”

As Chris reminds us, board members are turning to Chief Analytics officers (CAOs) and senior executives across every industry to play a critical role in crisis response. That will likely continue in the new normal that will eventually follow. In today’s high-stakes environment where companies must make decisions at a rapid pace, it’s never been more imperative for CAOs to provide organizations with timely insights that are actionable in real-time as we fight COVID-19.

6. No one company, however big, can succeed alone

“I learned during my 40-year career, that no one company, however big, retailer or manufacturer, can succeed alone,” said Chris. “Collaboration is the key. One of the foundations for collaboration is standards. Common standards. And standards are increasingly fundamental to the way we work and live. Let me give you a simple example, the barcode which has now become ubiquitous in all of our lives. The barcode requires a huge amount of collaboration between companies, government and technology suppliers to ensure that each of those bar codes is indeed unique. And the barcode is one of many standards managed by GS1.”

As Chris mentions, collaboration and full transparency between retailers and their CPG suppliers are crucial to identifying and acting upon demand signals and changes in demand patterns. Constant communication will enable retailers and CPG suppliers to act fast and appropriately to mitigate root cause threats that contribute to under-predicting demand for essential items during the crisis. The new normal no longer just relies on collaborating across internal departments: It will be more and more about humans partnering with machines in an autonomous supply chain with full transparency.

7. Total lifecycle traceability of a product is a reality

“The opportunities for the use of analytics in a world where we have total lifecycle traceability of a product are endless,” said Chris. “Imagine knowing how long the consumer retains a product and when he or she actually disposes of it and where they dispose of it. More importantly I think about how we can use that information for good. How we can incentivize consumers through the information to recycle the products responsibly. How we could enable them to keep track of how successful they and their family members are in that recycling and how they are doing in their neighborhood. The opportunities are endless.”

Where do we go from here?

This unprecedented pandemic is a wake-up call for all industries, including retailers and their CPG suppliers. It’s no longer just about collaborating across internal departments: It’s about humans partnering with machines driven by AI and machine learning in an autonomous supply chain with full transparency across the broader spectrum of the global supply chain.

Learn more about retail and consumer goods solutions in the age of COVID-19.

 

 

 

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About Author

Nancy Rudolph

Technology Field Marketer

As a Global Marketing Manager at SAS, Nancy represents the Retail and CPG line of business. In her role, Nancy evangelizes SAS as a present and powerful force in the global retail analytics market. Outside of SAS, her passions include participating in outdoor sports, volunteering with her therapy dog and spending time with her family.

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