What is the principal challenge facing supply chains today?
Severe pressure on resources. Many raw materials are in short
supply. Oil is starting to run short, so prices will keep rising. Money
is tight, so organisations can’t afford new machinery or large
inventories. Lack of space and skilled manpower can be a major
constraint. Even water is a scarce and under-appreciated resource.
What can we do about it?
One solution is to rethink the way we use resources. Instead of the
“consumption” model – buy something, use it, throw it away – we
need a more sustainable model where resources are shared or
rented. Does every household need its own lawnmower? Does
every company need its own warehouse, factory and vehicle
fleet? Or could asset sharing and collaborative working increase
efficiency and reduce wastage and transport utilisation?
What other new approaches could supply chains take?
Embrace new technologies and economies of scale – for example,
3D printing could enable spare parts to be manufactured locally
instead of being shipped around the globe. And products could
be shipped in cheap, “vanilla” forms and then tailored for local
Do we have the skills to meet these challenges?
Supply chain skills are another scarce resource. Traditional supply
chain skills were technical: inventory management, requirements
planning, transport and so on. But the order-winner today is
“emotional” intelligence: the ability to build relationships and
collaborate with suppliers, customers and even competitors to
create more sustainable supply chains.
How can we develop these “emotional” skills?
At Cranfield, we teach both technical and emotional skill sets in
our MSc in logistics and supply chain management, and we find
that it is possible to develop emotional intelligence in people with
a technical supply chain background. Another useful approach
is to bring in people from diverse backgrounds, such as marketing
and finance, because they understand other aspects of the
business such as cost-to-serve.