60 Seconds with Steven Bowen, CEO of Maine Pointe

Steven Bowen

Company: Maine Pointe

Title: CEO of the consulting firm Maine Pointe, and the author of “Total Value Optimization: Transforming Your Global Supply Chain Into a Competitive Weapon.” Bowen will be the keynote speaker of Modern’s Virtual Summit.

Location: Boston

Experience: More than 30 years in the industry, with extensive experience in supply chain optimization as well as lean and demand-pull global environments. Bowen founded Maine Pointe in 2004.

Modern: Supply chain has never been more important than it is now. At the same time, supply chain managers have been whipsawed between a shutdown and recovery. What are your clients dealing with?

Bowen: It is a challenging time. Let me give you a client example. I have a client whose demand accelerated between 300% and 400% during Covid. During that demand spurt, they bought all the supply they could get their hands on and focused on getting product out the door. Cost wasn’t an issue. Now, demand is slowing down.

It won’t drop to where it was before Covid, but they have to bleed down inventories they already have on hand, order differently than they have been ordering and become cost conscious again. We have clients who can’t get chips, can’t get steel, or can’t get Nylon 66 (a polymer used in textiles, packaging and home building supplies). What’s more, I don’t think we’ve seen the real demand spike just yet. That’s going to take another 3 to 6 months. What this tells me is that planning and scenario planning really need to ramp up in a dramatic way.

Modern: The big shifts going into the shutdown and now coming out of it have been understanding what’s really going on with demand from your customers, and what’s really available in terms of supply. How can companies grapple with this?

Bowen: One of the biggest pain points right now is where they need to invest their capital to serve their customers, because where they’re doing business may have shifted. And, even if they decide to invest, they’re struggling to meet timelines to build out a new manufacturing facility or a new warehouse. I have a client building a new facility in Taiwan that’s going to be a year and a half behind schedule because they can’t get building materials or construction workers. The current “lump in the snake” caused by this sudden uptick in orders is impacting everything. And it will, until we are able to fill all the orders that are out there now.

Modern: One of the buzz words we hear in supply chain, inside and outside the distribution center, is resiliency. What steps are companies taking to gain resiliency?

Bowen: You’re right that everyone is talking about resiliency. They’re also talking about optionality. The dilemma is how to create those two aspects in the current environment. You see that you’ll have customers spread out in three regions, but your best supplier can only serve you in two of those regions. So, once again, if you tie this back to your scenario planning, you have to ask where and how you deploy your capital.

Modern: Last question, supply is so much in the news today. How should companies approach suppliers going forward?

Bowen: We’re going to have to engage key suppliers in different ways. Companies will need to open the kimono and share more with their suppliers about what they need and what it means to them and understand how it impacts their suppliers. That’s a big mental shift for most organizations, and it’s going to take time to develop real strategic partnerships.

In the short term, I think it’s going to be hard not to let the sudden pickup in demand—what I referred to earlier as the lump in the snake—interfere. Internally, supply chain managers will have to learn to speak the organization’s financial lingo to talk to the C-level, and the C-level has to teach those financials to the supply chain leader. And, that conversation has to go on with your strategic suppliers as well. You can only do that by integrating the supply chain team into a team with the supplier and the buyer to have a common understanding.