Diann Daniel: How can your company better manage
supply chain risk? That's the subject of today's
interview. Hey, everyone, I'm Diane Daniel from
TechTarget. And I'm here with Eric Kimberling.
Eric is the CEO and founder of Third Stage
Consulting, an independent consulting firm that
helps their clients better manage digital
transformation. We're talking about supply chain
risk and ways to better manage it as the next
step, read this associated article. So there's
just so much going on any thoughts on ways to
prioritize and and tackle these things when maybe
you can't do all of them?
Eric Kimberling: Generally, when you do that
analysis for that risk analysis of your supply
chain, you find a laundry list of stuff that you
could be changing or improving? And certainly
you're not going to do it all overnight, to your
to your point. So it's important to prioritize
that. But you know, one thing I'd say just as a
start is it's important to to rethink what your
prioritization criteria are. Because in the past,
up until 2020, I would say most supply chains and
supply chain managers were focused on, you know,
how do we optimize costs? And how do we optimize
throughput, which is sort of your traditional way
of thinking about supply chains. But now you have
to add another layer of complexity, which is,
well, what about the this the long term
sustainability and the overall flexibility of the
supply chain? So in other words, how do we adapt
quickly if if something happens if there's a
disruption in the supply chain? And more
importantly, you know, how do we, we might have to
make decisions now that say, well, we might have
to look at higher costs in the name of having more
predictable risk mitigation efforts in place. So I
bring all this up, because I think it's it's in
the past, you would just say, Well, let's look at,
you know, where the biggest cost savings could be
if we were to adapt or adjust something within our
supply chain. But now, mindsets have shifted where
cost is still important. But now you have to look
at the overall reliability of the supply chain.
And so I think it's a matter of defining what your
key prioritization criteria are, and identifying
based on those criteria, where are the biggest
risks? And where's the biggest potential impact
based on those specific criteria that you're
struggling with as an organization or
strategically, you might want to prioritize in
that way.
Diann Daniel: Yeah, that makes perfect sense. On a
different note, or I suppose a related note, what
tools are you seeing?
Eric Kimberling: You certainly have your
traditional tools like your your back office, ERP
systems, and your supply chain management and
warehouse management technologies that are meant
to automate and and provide visibility and data to
help you just understand the supply chain and
where the strengths and weaknesses are and how
you're performing from a supply chain management
perspective. And those technologies are still
important. Companies are still getting advantages
from them. But what we found is that traditional
back office, ERP and supply chain management
systems aren't necessarily cut out for what
organizations need today. You know, I use the
example before of geopolitical risk, you know, if,
you know if I'm a US company, and I have a lot of
concentration of suppliers in China, for example,
given the geopolitical tension between the US and
China, you start to wonder, Is that a good thing?
Do I need to diversify? Do I need to hedge that
risk of some sort of trade war between the US and
China. And that's the way you know, traditional
ERP and supply chain management systems haven't
really provided you the information or the focus
to be able to do that. So there's tools out there
now that provide additional color augmentation to
traditional ERP and supply chain management
systems that help you identify some of those
patterns or potential risks. You also have the use
of artificial intelligence in a lot of the newer
more emerging supply chain tools that will help
identify and predictively assess where there might
be potential problems or where there's, you know,
too heavy of a concentration of risk or where
there's, you know, some sort of geopolitical issue
that might be affecting a subset of your, your
supply chain. So it's all that kind of stuff.
There's different tools out there that you really
need to think outside the box of your traditional
ERP and supply chain types of systems.