Sumit Dutta Of EY On What We Must Do To Create Nationally Secure And Resilient Supply Chains

An Interview With David Leichner

Create the supply chain of the future: leveraging technology, digital platforms, and advanced analytics: The aspiration for creating operational resilience is self-driving, autonomous supply chains enabled by new and emerging technologies, such as predictive analytics, machine learning, blockchain, internet of things connectivity and sensors, supply chain digital twins and control towers. Bringing technology and data together gives leaders the ability to understand implications across an entire business unit or function and act quickly to mitigate potential risks.

The cascading logistical problems caused by the pandemic and the war in Eastern Europe, have made securing a reliable supply chain a national imperative. In addition, severe cyberattacks like the highly publicized Colonial pipeline attack, have brought supply chain cybersecurity into the limelight. So what must manufacturers and policymakers do to ensure that we have secure and resilient supply chains? In this interview series, we are talking to business leaders who can share insights from their experiences about how we can address these challenges. As a part of this series, I had the pleasure of interviewing Sumit Dutta, EY Americas Supply Chain & Operations Leader.

Sumit Dutta co-leads the EY Americas Supply Chain & Operations team. He has more than 25 years of consulting experience driving supply chain strategy, end-to-end supply chain excellence, and transformation across consumer and industrial clients.

Thank you so much for joining us in this interview series! Before we dig in, our readers would like to get to know you. Can you tell us a bit about how you grew up?

I grew up in India where I went to school, started my professional career, met my wife, and started my family. I completed my high school in Madras (now Chennai) in Southern India and my under-graduate in Electronics Engineering from the Indian Institute of Technology Madras. I acquired an MBA from the Indian Institute of Management Bangalore and joined the consulting industry.

Can you share the most interesting story that happened to you since you began your career?

I have traveled extensively at work and have had the opportunity to work across geographies — from Mumbai, Sydney, Singapore, Frankfurt, Senegal, Stamford & Chicago. The opportunity to work in very different industries and local context has been one of my best experiences. Of these, my most memorable experience was a client engagement in an emerging market where I had the opportunity to shape the strategy for the client and be able to assess the phenomenal social impact of our work.

You are a successful leader. Which three character traits do you think were most instrumental to your success? Can you please share a story or example for each?

There are three traits that have helped me in my career growth:

1. Having a point of view. I strive to do this myself and encourage my teams and colleagues to do the same. This has always helped me raise my/our profile with clients and it’s a recognition that clients finally want us to guide them in the decision process and not just provide analysis and evaluations e.g., advising a CEO about an acquisition.
2. Caring for clients as individuals and working with the understanding that our work (as consultants) makes up for a small part of their overall life. Understanding their aspirations, fears, and overall priorities — in work and personal life — helps me make much better decisions for them e.g., being there for a C-suite client who was trying to help his daughter through the challenges of going overseas for her higher education.
3. Helping my team progress through their careers even if it had personal implications e.g., deferring an inter-office transfer for a year so that two of my senior leaders in my supply chain practice were elected Partners in that year.

Are you working on any exciting new projects now? How do you think that will help people?

It’s an exciting time in supply chain management as organizations rethink their supply chains, especially with sustainability in mind. With a myriad of supply chain disruptions over the past two years, organizations and consumers are now much more aware of the role that supply chains play and their importance in making sure that toilet paper, baby formula, cleaning supplies, and other staples we use in our daily lives make their way from manufacturers to warehouses and most importantly, store shelves — on time.

Additionally, supply chain sustainability is crucial to our world’s ability to meet net-zero carbon emissions targets and make progress against other environmental, social, and governance (ESG) objectives. Chief supply chain officers are very focused on how to help their organizations make progress toward those objectives.

As we help our clients lay the groundwork for sustainable supply chains, it’s inspiring to consider the options and benefits of incorporating new and advanced technologies, such as cloud or blockchain-based sustainability platforms, machine learning/artificial intelligence, automation, robotics, digital twins, and control towers.

End-to-end visibility and product traceability is the number one priority for companies, according to a recent survey we published. This is not a surprise. In addition to knowing the status of supplies for manufacturing, what has been delivered to a port or warehouse, or how soon a truck will arrive at a store, it can enable organizations to understand the origin of goods they are purchasing. That means getting a better handle on labor conditions in factories, fair trade and pay, and other human rights concerns.

Suffice it to say, I thrive on helping clients reimagine their supply chains and through these efforts, help create a better working world.

Ok super. Thank you for all that. Let’s now shift to the main focus of our interview. In order to ensure that we are all on the same page let’s begin with some simple definitions. What does the term “supply chain” encompass?

Supply chains encompass the end-to-end process of planning, sourcing, and making goods, as well as the logistics involved in getting source materials and finished goods from their point of origin to the point of sale with the visibility to monitor their status and location at any given point in time.

Can you help articulate what the weaknesses are in our current supply chain systems?

Over the past few decades, supply chains have become increasingly globalized, meaning that companies have access to manufacturing, materials, and consumers worldwide. For many decades, globalized supply chains resulted in greater efficiency and reliability. However, in the wake of COVID-19 and other geopolitical factors, we have also seen how susceptible supply chains have become to disruption in terms of both product availability and the end-to-end cost of products (sourcing, manufacturing, and logistics). Therefore, many are rethinking their supply chain operating model and architecture to make them more resilient and sustainable.

Today, a growing number of supply chain executives envision sustainable, autonomous supply chain operations with lights-out planning, made possible with artificial intelligence throughout. Connected, intelligent and coordinated, these supply chains of the future will also minimize waste and use water more efficiently.

Our recent research found that some believe mostly autonomous supply chains will be in place by 2030. However, most believe it will take longer to get there, with 53% pushing the timeline out to 2040.

Can you help define what a nationally secure and resilient supply chain would look like?

Supply chains rely on national infrastructure, i.e., ports, roads, and railways, with each organization building out its own supply chain. Part of the solution relies on the development of flexible, transparent, sustainable, and autonomous supply chains.

As with the development of advanced networks and the use of emerging technologies, supply chains must be built with cybersecurity in mind. The architecture and process protocols are crucial, in addition to the latest hardware and software.

Operations and supply chain leaders need to educate and train their people in cyber safe practices and understand generational differences across their workforces. The findings in a recent EY cybersecurity survey were eye opening in what they revealed about the human risk in cybersecurity.

As my colleague Tapan Shah observed: “Companies are investing to embed cybersecurity in every business unit as they digitally transform, but software, controls, processes, and protocols are only part of the equation for minimizing cyber risk. Increasing enterprise-wide security also requires a holistic focus on the human, engaging every employee and embedding safety checks and protocols that make the risks tangible in their professional and personal lives.” Supply chain are a large piece of that enterprise-wide security that organizations need to secure.

My particular expertise is in cybersecurity so I’m particularly passionate about this topic. Can you share some examples of recent and notable cyber attacks against our supply chain? Why do you think these attacks were so significant?

Supply chains touch nearly every aspect of an organization’s operations. The severity of a cyber-attack can be affected by the architectural design that underpins a supply chain. It is critical for organizations to shut out lone intruders, criminal gangs or even state actors to prevent their entry into sensitive areas of supply chain data. In other instances, training and education are needed for employees to improve physical security along with cyber security. While AI is surely advancing, we should not forget that the human risk can be substantial.

What would you recommend for the government or for tech leaders to do to improve supply chain cybersecurity?

The best practice a leader can have involves baking cybersecurity into every step of the supply chain transformation, and subsequent training for workers who interface with the supply chain network. As we transition from the rigid, physical-based supply chain model to a flexible and cloud-based system of the future, cybersecurity at every level will be paramount for operations and supply chain leaders.

At the same time, organizations need to recognize and prepare for the inevitable system breach or attack. Those that run simulation exercises that train individuals on their role in the event of an attack will be best placed to minimize the damage that can occur.

Ok, thank you. Here is the main question of our interview. What are the “5 Things We Must Do To Create Nationally Secure And Resilient Supply Chains” and why?

1. Redesign the supply chain architecture and operating model: We are helping clients move from the current cost-optimized, global supply chains and, rigid structures to regionalized supply chains that provide ’structural agility’ and agile, networked ecosystems on cloud-enabled platforms. We help supply chain leaders conduct scenario analyses around diversifying, insourcing and/or retaining domestic supply chain capabilities, and evaluate the strategic architecture of supply chains to align their design, production, warehousing, and distribution networks to support environmental objectives and lifecycle management.
2. Increase end-to-end supply chain visibility and operational resiliency: Operational resiliency is about more than just reacting to disruptions with a recovery plan. Leaders need the foresight to anticipate what’s coming before it disrupts the business, impacts their reputation, and damages customer experience. Streamlining communications across business units and across geographies is vital in times of severe disruption. Greater collaboration helps each unit stay informed of the other’s actions and needs, helping to increase effectiveness and eliminate waste within the supply chain.
3. Strengthen supply chain cost and service performance: As supply chains across the country continue to face disruptions, EY is helping our clients drive end-to-end cost transformation in the light of inflationary trends and operational agility in the light of continued external volatility. End-to-end planning is one of the most important factors for running a smooth supply chain, as it allows you to map out your needs and eliminate any redundancy you might find.
4. Advance supply chain sustainability to create benefits for the organization: Investors, government regulators, consumers and other stakeholders increasingly expect companies to operate sustainably. A survey of global supply chain leaders by EY Consulting shows that while 80% of executives are working toward creating a sustainable supply chain, many are falling short on how to measure their progress. As a result of their ESG efforts, 55% of supply chain executives say they expect to see better management of operational risks within the next one to three years, adding to the 20% who have already seen these reductions. All of this goes a long way toward creating a sustainable supply chain that is resilient and flexible enough to deal with unknown disruptions in the future.
5. Create the supply chain of the future: leveraging technology, digital platforms, and advanced analytics: The aspiration for creating operational resilience is self-driving, autonomous supply chains enabled by new and emerging technologies, such as predictive analytics, machine learning, blockchain, internet of things connectivity and sensors, supply chain digital twins and control towers. Bringing technology and data together gives leaders the ability to understand implications across an entire business unit or function and act quickly to mitigate potential risks.

Are there other ideas or considerations that should encourage us to reimagine our supply chain?

Supply chain leaders should keep in mind companies that have already begun to prioritize sustainability in their supply chain transformation have seen benefits beyond their carbon footprint. Our survey of supply chain leaders found that their efforts to reduce emissions throughout the supply chain resulted in the added benefits of increased customer loyalty (32%), lower employee turnover and enhanced productivity (31%), and higher profits (23%). Clearly prioritizing sustainability in supply chains can have positive effects in other key areas as well.

You are a person of great influence. If you could inspire a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. :-)

I would like the best of supply chain thinking and skills, especially in leveraging the power of digital and advanced analytics, to be brought to bear to improve supply chains for social good. This includes, for example, efficient distribution of vaccines and medical supplies especially in emerging markets, collection and distribution of essential clothing and school supplies to help under-privileged children go to schools (within countries and globally), helping companies and countries measure and report their performance on environmental sustainability.

How can our readers further follow your work online?

I would encourage readers to connect with me on LinkedIn and access the reports my team and I produce which are available here.

This was very inspiring and informative. Thank you so much for the time you spent with this interview!

About The Interviewer: David Leichner is a veteran of the Israeli high-tech industry with significant experience in the areas of cyber and security, enterprise software and communications. At Cybellum, a leading provider of Product Security Lifecycle Management, David is responsible for creating and executing the marketing strategy and managing the global marketing team that forms the foundation for Cybellum’s product and market penetration. Prior to Cybellum, David was CMO at SQream and VP Sales and Marketing at endpoint protection vendor, Cynet. David is a member of the Board of Trustees of the Jerusalem Technology College. He holds a BA in Information Systems Management and an MBA in International Business from the City University of New York.