Navigating an uncertain world: future-proofing global supply chains
In the wake of trade conflicts, Brexit and the COVID-19 pandemic, the vulnerabilities of global supply chains have become glaringly apparent. And there are no short-term fixes, making the “future-proofing” of supply chains crucial. This means anticipating unexpected disruptions, embracing advanced manufacturing and digital technologies, and factoring in geopolitical dynamics and sustainability.
To delve deeper, we spoke with Jagjit Singh Srai, Director of Research and Head of the Centre for International Manufacturing at the Institute for Manufacturing. Srai sheds light on the significant shifts in global supply chains, underscores the necessity of forward-thinking strategies, and advocates establishing resilient supply chains through collaborative efforts between academia and industry.
What are the major shifts currently impacting global supply chains, and how can we ensure that supply chains are prepared for the future?
The imperative for “future-proofing” has emerged from many organisations’ attempts to address recent waves of supply chain disruptions through sub-optimal short-term responses, recognising the need for a more fundamental rethink of their supply chains.
Before COVID, there were various trade tensions between the US and China, as well as discussions about Brexit in the UK. Organisations tended to react quickly to each of these individual disruptions. But post-pandemic, these waves of disruptions have compounded with one other and have since been exacerbated by the Russia–Ukraine and Israel–Gaza conflicts.
In response to these challenges, organisations have had to think beyond quick fixes. The short-term approach has often led to carrying extra inventory and safety stock, which can be costly and result in having the wrong items in the wrong place. A good example of the complexity of multinational supply chains is a leading pharmaceutical company whose existing number of node-to-node internal connections — factory to distributor — exceeds 2,500. This is before considering suppliers and customers that sit outside their internal network. As organisations start to consider medium-term resilience strategies, such as finding alternative suppliers through second sourcing, the supply chain can unintentionally become even more complicated than it already is.
In contrast to these quick fixes, “future-proofing” supply chains necessitates adapting them to withstand unpredictable and compound disruptions in the long term. These disruptions often stem from external factors such as geopolitical impacts on trade, or the purposeful adoption of technology, such as in digital technologies and manufacturing processes that can change economies of scale, manufacturing footprint, and sustainability performance.
Future-proofing means considering a wide range of shocks, such as market volatility, technology disruptions, cyber risks and climate change, all of which affect how supply chains will be designed in the future.
We need to remember that the supply chains we have in place were established during a relatively stable period over the previous two decades, resulting in long supply chains often situated far from their customers. While these supply chains excelled in terms of cost, they often lagged in other metrics, such as sustainability. As we enter a more uncertain era, we must rethink our strategies to enhance service levels for more time-sensitive and resilient markets (particularly for critical products such as food and medicines) that require planning not just for the next few quarters but looking much further ahead, perhaps even beyond 2030.
As we enter a more uncertain era, we must rethink our strategies to enhance service levels for more time-sensitive and resilient markets.
What strategies can manufacturers consider to help them prepare for the future and adapt to this “new era” of supply chains?
First, it is important to understand the factors that need to be incorporated into the design of future supply chains.
This includes considering a broader set of factors, cost yes, but also responsiveness, resilience (for example, security of supply to critical raw materials and digital infrastructure, including cyber-security) and the impact of geopolitics on trade. Some options to consider are more regional manufacturing and/or trust shoring in parts of the world where the reliability of supply is likely to be greater and less vulnerable to geopolitical technology-related changes. Also in our considerations should be how new advanced manufacturing technologies can enable smaller-scale production closer to the market, resulting in faster and more efficient service.
These are examples where manufacturers need to embrace external factors, technological changes and perhaps new performance metrics that include things like climate-related performance measures or social measures, such as ensuring ethical supply chains.
How are companies successfully adapting their supply chains to become more resilient and sustainable?
One of the key approaches that many multinational companies have taken is to shift from a globalised supply chain model to a more regionalised one. This move towards regionalisation isn’t new, but it has gained greater traction in recent years.
Others have considered implementing a more multi-stage, decoupled supply chain, with feeder plants for efficient production of core components and separate finishing plants located closer to the markets they serve. This allows for responsiveness and proximity to the market while preserving economies of scale of key components. It requires us to rethink product design and, in this example, adopt a more modular approach to production.
So, reconfiguring both the production process and the supply chain is essential.
How do your work and research impact practical advancements in manufacturing and supply chain management?
Over the last 25 years, the Centre for International Manufacturing at the Institute for Manufacturing has developed expertise in manufacturing footprint design, as well as supply network design. These are strategic processes, frameworks and tools that help organisations explore different supply chain configurations and evaluate how these configurations perform against various performance metrics. We help organisations think about the trade-offs, such as balancing service levels and costs, responsiveness and cost, and the increasingly important consideration of achieving scope-three net-zero emissions within alternative supply chain configurations.
We help organisations think about the trade-offs, such as balancing service levels and costs, responsiveness and cost, and the increasingly important consideration of achieving scope-three net-zero emissions within alternative supply chain configurations.
We’ve also been developing novel approaches and tools to assist firms in their digital supply chain transformation journeys. Since 2016, we have been supporting organisations to identify which digital supply chain technologies (often termed Industry 4.0), and in which combinations, will have the most significant impact. We have been exploring how these individual technologies can be combined to create competitive advantage in their operating or business models. This work has led to developing a Digital Supply Chain Consortium that facilitates knowledge exchange between our centre and industrial partners, and among industrial partners themselves.
However, we don’t have exclusivity on knowledge in this space. We recognise that our industry partners will implement some of the best practices. The exchange of knowledge on international manufacturing supply chains between industry and academia is in our centre’s DNA.
What is the Cambridge International Supply Chain Symposium?
The symposium is a unique event focused on modern manufacturing supply chains. What makes it unique is the presence of prominent business figures, industrialists and leading academics who share their approaches and experiences in this field.
In light of significant disruptions such as trade conflicts, Brexit and COVID-19, it is clear that organisations can no longer afford to be reactive. Future-proofing supply chains now involves preparing for unforeseen disruptions, embracing advanced manufacturing and digital technologies, and considering geopolitical and sustainability factors.
The 28th Cambridge International Manufacturing Symposium offers an unparalleled platform to delve into these critical issues. By attending, delegates will not only gain insights from leading experts but also engage in rich discussions and networking opportunities that are vital for future-proofing the supply chains of tomorrow to be more resilient and sustainable.
Who should attend the symposium, and why?
The symposium is designed for senior executives overseeing manufacturing networks and global supply chains. These may, of course, involve the development of operations strategy, procurement, sourcing, logistics and customer service, as well as researchers in strategic and operations management, network design, international business and sustainable, resilient network design. Attendees will gain valuable insights from shared approaches and experiences in these strategic domains, equipping them with practical knowledge to apply in their organisations and research.
This event offers a unique opportunity to learn from renowned experts and industry leaders. Attendees can take advantage of numerous networking opportunities, including a symposium dinner at Magdalene College, University of Cambridge, which will provide a relaxed and distinguished setting for further professional engagement.
Why is it important to facilitate collaboration between academia and industry?
Drawing on my 17-year career at Unilever, I know how easy it is to become overly focused on the present and take an incremental approach to solving challenges. In industry we often see an established way of doing things that are ingrained within the sector, which can be limiting.
An organisation’s culture often leads many executives to become narrowly focused on the way their industry does things. However, it is important to look at the bigger picture and consider how other industries tackle similar problems. This allows for valuable knowledge exchange among industry colleagues, as well as the benefit of insights from academia, where many approaches are based on works from 5, 10 or even 15 years ago.
When we deeply examine the fundamental principles surrounding the topics I have discussed, some important questions arise. How should we approach network design? What are the factors that influence alternative configurations or choices? Or, as we like to put it, “making the right things in the right places”.
What is the current impact of digital technology adoption in the industry?
In the case of digital supply chain transformation, there are significant opportunities in terms of productivity, visibility and connecting suppliers, producers and end users. However, adopting the “right” digital technologies within complex manufacturing supply chains is far from straightforward. Our design frameworks and digital tools, informed by our research and practice engagements, provide insights into which digital interventions to prioritise.
I believe that stepping back from day-to-day operations to focus on fundamental principles is something that academics can bring. The opportunity lies in the crossover between the academic and industry communities, informing the way supply chain leaders shape their strategies.
Who are some of the notable speakers involved in the symposium this year, and what topics will they be addressing?
Our experience running the symposium has played a significant role in developing our manufacturing footprint design work over the last 20 years. Our efforts in supply chain strategy have influenced major multinational companies, many of which are leaders in supply chain expertise rankings. We have continually engaged with industrial partners and academic colleagues to develop manufacturing supply chain strategies.
We have longstanding partners in the digital supply chain consortia, such as Unilever, Schneider Electric, Caterpillar and IKEA, who have been strong supporters of our tools for supply network design, digital transformation and other areas of knowledge exchange related to supply chain strategy from the beginning.
This year, we are excited to have speakers from AstraZeneca, including Dr Rydvikha Govender, Senior Scientist, Oral Development. She will discuss how future supply chains will need to adapt to serve increasingly niche and smaller patient populations, and how advanced manufacturing technologies and supply chain thinking can help meet the needs of the future. We are pleased to have Aksel Eroglu, Group Head of Operations, Strategies, and Supply at Nestlé, discussing how large multinationals utilise technological advancements and adapt to the changing economic landscape in shaping their future supply chains.
Shardul Phadnis, Associate Professor of Operations and Supply Chain Management at the Asia School of Business, will be sharing insights on the current state of the art in supply chain scenario planning and the leading figures in this field. And Rogelio Oliva, Professor at Mays Business School (who has taken on a leadership role in one of the most important journals in our field, the Journal of Operations Management), Texas A&M University, will explore where supply chain operations research is headed, and how academia will navigate the paradigm shifts we are witnessing in global supply chains.
A special panel session will also explore circular supply network transformation strategies, asking how we can decouple growth from material consumption.
Whether you are a senior executive or a researcher, the symposium provides invaluable knowledge and connections to help future-proof your operations. Join a prestigious lineup of confirmed attendees, including industry leaders and renowned institutions such as AstraZeneca, Nestlé, Schaeffler Group, Schneider Electric and ZD Energy.
Join us at the Cambridge International Manufacturing Symposium
Network with industry leaders, gain insights from renowned experts, and explore the latest trends and innovations shaping the future of supply chain management.
Dates: 19–20 September 2024
Location: Cambridge, United Kingdom
We have an exciting line-up of speakers ready to share their expertise on this year’s theme: “Future-Proofing Manufacturing Supply Chains — Navigating Paradigm Shifts in Geopolitical, Technology and Climate Transitions”.
Don’t miss this opportunity to be part of the conversation and drive the future of supply chain management. REGISTER HERE.
A complete list of our Day 1 and Day 2 speakers can be found on our website: https://engage-events.ifm.eng.cam.ac.uk/cimsymposium/
