Is your supply chain culture ready to deliver in 2025?

2020 has been defined by complexity and change. Supply chains have been navigating uncertainty associated with the COVID-19 pandemic, evaluating new business opportunities and lost business revenue, all while working to create safe environments for employees to continue working.

Mega-trends
But that’s not all. In addition to increased supply chain risk associated with the COVID-19 pandemic, supply chain leaders are also grappling with four mega-trends significantly impacting supply chain culture and business requirements.

1. Generational change
2. Digitalization
3. Customer revolution
4. Consumer personalization

These trends are exponentially increasing supply chain complexity, expectations of service and quality, pressure on manufacturer margins and expectations for overall customer value creation. The increased pace of initiatives, shorter lead-times, planned in-store obsolescence and digital fluency (linking supplier data systems with customers) are all driving new supply chain solutions.

This increased magnitude of change is now occurring at a faster pace than ever before. Some might argue there aren’t four mega-trends, but one over-arching trend driving the need for change: Speed.

The new speed of business does not come without challenges. Supply chain leaders report there is simply NO TIME to do work the way it was done in the past. There is NO TIME to train people in new skillsets in classrooms. There is NO TIME to “bake” equipment or product ideas for two to three years before hitting the market. There is NO TIME for sequential planning. It all has to happen in real time, via virtual networks of employees across the entire value chain, from suppliers to vendors to 3PLs and ultimately to customers.

There IS TIME, however, to create a supply chain culture in your organization equipped to provide competitive advantage in 2025. You must make it, or time might run out for your business. Winning companies focus on building high performance organizations that can thrive at the new speed of business.

The evolution of HPO best practices
Research conducted by The University of Tennessee’s Global Supply Chain Institute (GSCI) reinforces the need for supply chain leaders to prioritize implementing High Performance Organization (HPO) best practices as a primary pathway to creating competitive advantage. The research was conducted by Mike Burnette, Mike Policastro and Timothy P. Munyon.

To discover how supply chains are renewing the organization and building the necessary capabilities to meet 2025’s challenges, GSCI conducted 19 field interviews with executives at 14 benchmark companies. These companies spanned beverage, equipment, technology, automotive, chemical, food and CPG markets. The findings further proved the importance of embracing change to meet the needs of ever-changing shifts in trends. Leading-edge supply chains were not only having to modify well-established HPO principles to cope with the four mega-trends, they were also integrating these principles from previous decades with new best practices.

Benchmark supply chains started creating high performance work systems (HPO) in the 1980s after a re-birth of post-WW2 organizational and behavioral research from McGregor and Hertzburg, among others, in the 1960s. The essence of these best practices have remained, evolving to address current business challenges. Established HPO best practices include:

1. Zero-Loss Mindset
2. 100 Percent Employee Engagement
3. High Performance Leadership
4. Business Value Creation
5. Accelerating People Development

The last decade has seen the rise of a second set of benchmark best practices to address the exponentially higher levels of speed and complexity facing supply systems. New HPO best practices include:

1. Thriving on Speed
2. Project- vs. Role-Oriented Career Progression
3. Embracing Generational Differences
4. HPO Virtual Networks
5. Supply Chain Lean Innovation

GSCI will address all of these best practices in a series of short SCMR articles to follow.

People are the heart of the supply chain. Manufacturing, procurement, warehousing, engineering and transportation are all people-intensive elements of the organization. As such, a supply chain organization’s performance is directly linked to its individual and team capabilities. Benchmark supply chain leaders understand that delivering at the 2025 speed of business requires a deliberate HPO initiative. The pandemic elevated awareness of supply chains as a competitive advantage like never before. Without HPO renewal, achieving best-in-class supply chain management will be nearly impossible.

Find a full explanation of each best practice in the GSCI white paper, available for free download by clicking on the link.

About the authors:
Mike Burnette is a distinguished fellow at the Global Supply Chain Institute, University of Tennessee, Knoxville and a retired supply chain executive.

Mike Policastro is a researcher at the Global Supply Chain Institute, University of Tennessee, Knoxville and a retired supply chain executive.