Supply Chains? Supply Web? Supply Matrix? The New Paradigms of Supply Chain

Aug 9, 2022

“Supply chain” is a term that is known and understood across industries, having been in use for decades to describe a business’s procurement, production, and distribution processes. But in recent years, there has been a rise in the use of terminology less familiar to many: “supply matrix” and “supply web.”

These are not brand-new terms; they date back to 2006 and 2010 respectively, but their use has become more frequent as the world of industry, and the world at large, have become more complex. “Supply chain” suggests a linear, relatively predictable process, while “supply matrix” and “supply web” open up the possibility of interlacing, overlapping, and otherwise unexpected shapes that businesses have come to expect from their procurement, production, and distribution processes.

For some, the rapid changes businesses are grappling with, both in terms of their industries and in terms of broader global phenomena that affect their businesses, are daunting and overwhelming. Here are two key strategies that can assist business leaders in navigating these turbulent times:

Connect the Dots

There are some disruptions that are impossible to see coming, such as certain kinds of natural disasters. Others give warning signs, but still catch leaders off guard with the suddenness and intensity of their onset. Take, for example, the Russo-Ukrainian War. There were certainly signs of a conflict before warfare erupted, but the majority of industries could not have anticipated the impact that this conflict would have on their businesses. COVID is another instance in which there were signs of a potential pandemic, but few (if any) companies were prepared for the duration and intensity of the disruption to the world of work.

So how can companies expect the unexpected, from natural disasters to political upheaval? They can start by looking ahead and asking “what if?”. Invest in hiring a senior “dot connector” whose job it is to keep a finger on the pulse of global activity, tracking potential opportunities for disruption and theorizing about what can be done if (and when) a crisis occurs. Consider, for instance, if a leading Egyptian cotton company had had an executive on staff who was following the Russo-Ukrainian conflict and pulled together the following information: Ukraine provides 50% of the world’s wheat supply, and about 80% of Egypt’s total wheat supply. Russia provides about another 15% globally. With that in mind, this dot-connector could have created a plan of action for a potential devastating disruption to their wheat supply, putting processes in place that would mitigate the impact on that company when the time finally came and war broke out. This, of course, is only one specific illustration: there is not a sector that has been unaffected by Russian and Ukrainian production, so this type of preemptive action could have been beneficial to almost any company.

Looking ahead, companies in the United States could begin to strategize about the potential impact of North Carolina becoming home to one of the world’s largest lithium mines. How might this change the electric car equation? What other industries could be impacted by having direct access to a resource for which they are usually dependent on imports from China or South America? These are not questions that most executives have the qualifications or the time to explore, but having that senior “dot connector” on staff to dive down these rabbit holes can pay long-term dividends in preparing companies for unexpected and unusual events.

In addition to that designated “dot connector,” companies might consider bringing on two Board members to strengthen these efforts. For example, an economist and a leader with another niche expertise could ask questions and open doors that a company’s more industry-focused leaders might not have had access to.

It’s important to note that these types of “dot connectors” are unlikely to have an annual ROI, so a company’s leaders would need to look at the long-term investment rather than immediate bottom-line boosts.

Become a Translator

Those “dot connectors” provide an external-facing wisdom to companies, but businesses also need internally focused experts who can cross business silos and provide value in a diversity of ways. Previously, an employee with knowledge of multiple business units was referred to as a “jack of all trades” - but that term fails to capture the true essence of what these employees bring to the table. They are, more accurately, “translators.” These employees contribute to their company and their industry’s long-term success by developing their skill sets across multiple units, from supply chain to finance, IT, and human resources, among others.

By tapping into multiple lines of business expertise, an employee can help a company understand and translate global trends and internal areas for growth and innovation. In addition, these individual “translators” create opportunities for personal career growth: who is better qualified for C-suite consideration than someone who is conversant not only in their supply chain field, but also in the financial and human resource aspects of running a business?

Company leaders can encourage employees to become “translators” by creating opportunities for cross-training and continuous learning and development. This allows curious and passionate individuals to step outside of their specialized fields and develop knowledge bases that are both deep and broad.

Many companies are beginning to think about internal processes and external factors in a broader perspective than they previously have, which is the first step toward creating these necessary changes. It is unlikely that the world will become less uncertain and unpredictable over time, so companies can only benefit from implementing forward-thinking, “dot-connecting” strategies for success today.

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