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Courtesy of MetaOps' Ron Crabtree below is a transcript of his speaking session on 'Chief Procurement Officer’s 2022 Outlook' to Build a Thriving Enterprise that took place at the Supply Chain Planning Live Virtual Conference.
I am very, very excited about our next speaker.
He's coming in from Michigan today, joining us with a wealth of experience and knowledge on supply chain planning and execution. And I'm talking about the great wrong Crabtree who is here with us. He's the CEO of Meta Ops and matter experts. A company he founded 20 years ago that focused on providing top-level talent to solve the most difficult business problems are including supply chain planning and execution problems. He's an organizational transformation, architect, and thought leader in operational excellence, in supply chain, and Lean six Sigma best practices in a wide range of industry. He also serves as the executive advisor for the next level Purchasing Association. And Ron has a tremendous presentation for us today on the insights that the recent insights that he's been gathering from thought leaders and the industry leaders related to supply chain. Ron, it's a real pleasure to have with us.
Thank you for taking the time to share tremendous wisdom with our global audience today.
All right, that.
Well, it's a real honor to be with you here today, and, uh, I can't say, after more than 30 years, as a practitioner working, mainly in the automotive industry, and supply management over the last 20 years, you know, working with a huge variety of organizations around what it takes to be successful.
This last couple of years has been unprecedented, just way too nice job of highlighting that.
There's been a significant shift, know, back in 20 19, as we're working with the next level Purchasing Association folks.
You know, a big focus was supply chain efficiency, you know, driving our costs, and wringing out the last Penny, Total cost of ownership, and really getting better. And better at that.
But we've had black swans. Right?
The last couple of years, and the shift is now moving toward more effective supply chains.
And one of the things we tried to do, actual purchasing associations, make sure that what we're bringing out to our customers and sharing information to them, to the world is cutting edge. It's on their leading edge.
So we embarked on a mini-survey a little earlier this year in January. This is very much fresh off the press.
Well, we got into talking with a number of, very, very experts. You know, people are closer network that we could get spend some time with us, that are not practicing cheap purchasing officers and leaders in best practices and supply management.
And we did a little mini-survey pulled that together, and we'll be sharing the results of that here with you today.
Where we ask a couple of basic questions around, what are the three biggest challenges?
Going into 2022 and beyond.
For their team, try for the supply management change. What would be the most important skills that we need to get involved with.
We're going to ask the audience to weigh in on your views related to both of these things as we get into it, then we'll wrap up with a bit about RPA and what have you, the presentation.
Alright, so we conducted a survey with volunteer overseas or senior, supplying manage for the executives in a wide variety of industries. We have these two basic, open-ended questions. You can see them here on the screen.
..., many demographics, and should have a little feel for who participated in the survey, are these findings came from?
So wide wide variety of industries. Because you can see here we have banking. We've got pharmaceutical.
We have retail mining, airline services, lots of interesting industries participated, and that came from around the world.
The United States, in North America being the biggest part, but good representation across Europe, to Asia Pacific, Rim, Latin America, even into the Indian subcontinent, the representative with thought leadership feeding into the results of our survey.
So for the very first question, this was like, what are the top three things that kind of keep you awake at night, you say the biggest challenges we face in supply management going into 2022?
No big surprise, cost price inflationary issues are certainly very high in everybody's mind in terms of the things we need be concerned about.
But, it didn't end there and go back over there. It didn't end there, you'll notice like 23% around ... issues.
And then close follower want to pay attention here, because when we get question two, which is, what are the skills that we want people to master going forward, there wasn't a discipline that if there was a shift, right here, we're saying, cost is really what we're worried about. But the second bullet here, this very interesting around supplier supplier risk management, development of suppliers and management of suppliers.
They follow closely behind the logistics, logistical issues, costs of transportation, even getting sea containers, and a real nightmare.
If you've had the joy of trying to source from China into the United States, After that, we talked about staffing, You know, that never came up two years ago.
I never heard of it, You know, with the great resignation going on here in the United States. You know, we're point five million people changing jobs every month on average for the last several months. Just like.
Things have really shifted, it's really hard to come up with people covert pandemic, keeping people away from work, big, hassle.
After that, time delivery, lead time expansion, continuity of supply, sustainability of supplies, but a big issue, and then, technologies. And those way mentioned that earlier.
This is an important piece of the future, and you will see that, but we get down to what are the skills.
They're not going to match up perfectly, which was really interesting challenge Chet.
The other thing I found very interesting is an increased awareness around intra extra organizational collaboration as being crucial going forward, All being important mentions.
What we're going to do now is take a little bit deeper dive.
So, let's just take a look at this first category, Under cost Specifics, inside of that, there were five sub buckets, if you will, of how the survey responses came in, these five different things, you can see here on your screen.
I'd like to point out that the first two, on this list, all 70% of all the responses we got from this community, reporting inflation, rising prices, the mitigation of inflation, give them predictability.
In fact, 50% of all the comments under this category was specifically about that.
With a close follower of logistics costs, I have reports of five times increase in the cost of a sea container.
If you could even get one to get that product moved to United States from China, really good observations around, OK, what's supply chain? Issues start to go away.
How can we tie the future prices to interest so that we control that and get ahead of the spike in cost 500% increase costs for certain metals and the volatility for commodities and material price volatility.
So, if this is the back of your mind, because we're going to have a polling question coming up here in a few minutes.
Pithy comments, I'm gonna let you read this underground, but there was a lot of a, shall we say across this community, procurement, supply management professionals, and I really liked kind of here and let the global disruptions caused supply. sites shortage.
When you limit supply, your prices are going to increase.
So, limiting increases will be the forefront of the chief purchasing officers duty, and there will big increases. So that was pretty interesting.
Let's go to that next category of a kind of coined this little term here for SRF DMS.
Kinda take is higher risk development and management strategies.
There's a big bucket of all these things kinda revolving around this whole thing, you know. There wasn't any big stand out like we saw in the earlier one, but we had no inventory.
The risk assessment of suppliers actually doing something about audit findings, right? Getting into your contracts to try to mitigate those supply issues.
The I have one CPR particular to say, look, I can't find anybody to even take my bits. You know, I want to be able to find more suppliers.
Diversify, reduce my risk of interruptions, our suppliers to say, no. I mean, people say we don't want more sales. We have all we can do right now. So that's really a challenge.
You can see some of these other things here that came into play around specifically supplier risk development management strategy, sisters to close number two right behind costs on the master list.
Then we can continue with couple of pithy comments here, as well.
No container shortages, Pork delays, driver shortage is really driving increased need for inventory.
And then this whole notion of re-assure your shoring or localization of supply. That's a common theme.
There's lots of pain around what we've learned in the last couple of years about what we're going to do to try to mitigate supply issues in the future, to minimize our enterprise risk.
In addition to that, there was quite a bit of discussion around logistics, and as you see here, the identification of logistics, I was like, never before is now the weakest link and I've seen a lot of data lately.
Auto logistics, a three PL community suggesting that there were approaching 95% utilization of equipment for many, many months, over the last couple of years.
And that's like, really, where, you know, in the past, if you look back through history, anything approaching 80% utilization was considered a very, very healthy situation, because it got north of 80% started straining and breaking the logistics.
logistics chain across various carriers and purveyors of transportation's, So stressed the capability of the logistical part of supply chain dramatically, and, of course, has been driving the cost as well.
Then, we have countered the rest, right? Staffing, people, resources, the shortage of skilled workers for us, right in our own companies, but also within our suppliers.
So, what do we need to do to retrain, retain, and attract the talent? We need to run the business, right, capacity shortfalls at the supply side and also on our own competence?
Then the time delivery, lead time expansion, you know, assuring material availability.
The extended lead times, particularly, but stuff coming out of Asia and Europe towards the United States and then trying to achieve on time delivery at a fair price.
Then we had continuity of supply. There were a lot of mentions around continuity and sustainability of supply.
Fact, there'll be a topic around that later this year as part of the NLP Webinar series.
Then Technology Applied came up just when I mentioned that earlier in the session, that stabilizing our systems and technologies.
How do we really apply technologies, contract life cycle management, vendor management, vendor quality management, driving the use of artificial intelligence in digital transformation, in the practice of supply management.
Very high in the minds of our purchasing community of Chief Purchasing officers.
And then finally, this is really interesting that there's, I've never really heard this much before, but we're certainly hearing it now more than before us forever.
Communications, right between, you know, some organizations, supply chain management functions actually not connected to purchasing and procurement. That's pretty common in the automotive industry.
Well, first recognition that we've got to come together have much better collaboration between the planning, supply chain management site, inventory policies, all these other things that drive how we order or try to slow things through along with increased acuity and knowledge of finance, right?
Let's really take a longer view, right? Or of a risk and longer view to how are we going to mitigate and manage our financial rescue enterprise financial risk.
When it comes to the decisions that we make in our supply management strategies. So, very strong interests there as well.
So, that was quite a bit I ran through pretty quickly. But, you know, we're all smart people.
But, what we're gonna do now, is we're going to run a polling question, I'm gonna ask Joe Sway to fire that up here. And then, what are they interested in?
In this little list, because this is the, kinda the order that we talked about these, and then we're gonna run a polling question now, If you could pick, say, at least the top three in your mind, that appear to be significant, shift in priorities, perspective, of challenges that we need to address, coming here.
Just way, if we could run that polling question now, please.
Coming through, launching right now, and the reach of this areas are in the top three priorities for your organization, this year.
Pick as many as you like, but not less than three, so, please select all that apply here, and go ahead and make your selection by, bye.
Using what are the main priorities for your business, for your organization, what is that you are experiencing.
So, go ahead and make those choices, and please vote, I have 10% of votes so far coming through.
I'm going to give you a few seconds here to pick your top three.
Yeah, I don't know if it's possible to actually show those to everybody, FDR. Ron, you're the only one who cannot see right now because you're the presenter, but everybody else.
Yeah, I'd be interested in the statistics just way, because this was kind of a top-down list we got, from two different audiences. We've read your initial survey group, and then we had a big bunch of folks around this by last couple of weeks ago.
And we have pretty consistent, you know, common thinking.
But I'd be interested in statistically how this audience weighs in on, You know, what percentage we're thinking, number one, on this list, and so on.
Just to have a rough idea, how this community, that we're worth today, we view this challenge.
Outstanding, I think the most of everyone has voted very good participation, So, what we got here is, I'm going to share the results with everyone, so that you can see, and, Ron, you may not be able to see this. So I'm gonna read out loud for you that we have at 83%. Number one item was cost price and inflationary issues and that has 83%.
Then, 72% supply and supplier risk management, development and maintenance, as 72%.
And then, tie that third, We have the other two items, which is: logistic transport issues and continuity of supply, at 56%, on time delivery, and Lead Time expansion, and technology at 56%.
And finally, staffing at 22%.
OK, awesome, So, I find it pleasing, and basically you know, for an affirmation that what we were able to gather from our supply community, folks who started with this work, still lining it up pretty well. This is the set of the second group of interval run, these findings, but we could give us some feedback. The thing I find interesting is the continuity of supply came up the food chain.
The original work that we did, continuity, is a little bit further down, but also, the audience have taken another crack at this for this with opinions that put continuity and sustainability supply closer, closer to the top of the list. So that's a nice affirmation.
All right, so let's take breath.
And we're not going to transition to this thing, right, when I'm interested in.
Is if you could use the chat, or the question: To just take a moment is, there's an area of priority for your organization, that didn't come up here.
Is there an area of priority for your organization that's really important? Could you share that using the chat tool?
Chose way with the chat tool, the question to which you would have to go into the questions box.
So if you have any item that you'd like to add that is unique and is not on that list, go ahead and use the questions box to submit your entries, and we'll see on this side any answers that you submit.
Very good, so I'm gonna go over there and take a peek!
That way if you could share what people are putting in, that would be nice. Yeah.
I'll do it. I'll do it. Sometimes. There's a little bit of a delay.
Why don't you go ahead and keep going in the nothing's coming through so far, which I think your list is pretty comprehensive there is a Cage. Stewart has has has raised supply chain security, Kate. Thanks for that.
That's that's a very, very important topic that we didn't cover explicitly agree with that. In fact, cybersecurity came up, comes up in the next question for gets it to the next.
The last half of the survey, cybersecurity and security of supply chain did come up, so that's a great observation.
So, other than supply chain security, I think, that you capture pretty well on that on that list. Alright. Awesome.
Well, in that case, we're going to move on, take a deep breath, and now we're going to come to the second core question we had for this.
The final question is what are the top three?
What are the top three, building your team needs to approve on, going into 20 22?
And I found it very interesting that we had not really consistent with the first question, things shift, remember that.
And the first question was about cost really at the top of the list, but you know what cost doesn't even show up here and tilt towards the bottom.
So, when it comes down to the skills to purchasing officers, our community that we tap into, they felt like, know what, we've gotta manage the supply strategy. We gotta get in front of this risk thing, We've got to manage that change.
47%, everything that was mentioned around skill development, was specifically around that, followed by supplier development and supplier management, followed by technology.
So, that came up the list quite a bit, followed by sales inventory and operations planning, the management, logistics, management skills, cost management, and financial acumen, And finally, you know, supplier quality.
And I have heard reports, the supplier quality has gone down in the last couple of years, as we've put so much pressure on the supply chain.
So, it wasn't surprising to me to hear that one come up.
So, let's take a look now at the nitty gritty, right? So let's get in that very first category, and I found this pretty fascinating.
There were 11 different things that kinda came under this bucket of supply strategy, risk and change management.
Close first three things on this list where 50% of everything, I love these 11 basic categories, that people were responding accounts, a lot of these things.
Flexible strategy or real time decision making, improved skills to do that, to manage both demand and supply, pragmatic, risk assessment, and then the mitigation actions to make sure suppliers are capable modeling.
And then finally, how do we manage complexity?
How do we find efficiencies not cost efficiency, so let's talk about efficiencies for a second.
We're not talking about just price, we're talking about total cost of ownership, as a way of thinking about that, but efficiencies could be, just the fact that they can get it at all, allows my internal manufacturing operations that run like they should.
And we can make our sales numbers and get stuff out the door, even though the price is not what we want.
We're going to gain system efficiencies in terms of our performance as an organization end to end, maintain, or even grow. Market share of our competition is not being successful at dealing with these problems.
So that number three, there was a very, very insightful thing that came out of this.
Of course, Executive Management skills. No.
We're basically empowering our leaders to be more effective and all of this, and then number six on that list, the focus on sustainability.
So social responsibility hasn't gone away.
They certainly have had to take a bit of a backseat the last couple of years and the question of just getting the stuff in but it's still there. That's not going away. And then these other things here you can read on your own.
So I found that pretty interesting, and I'll mention this here a little bit later as we get into wrap up.
Category number two, This is specifically around supplier development and supplier management skills. And we had these eight different things that kind of came out of it, but interestingly enough, these top two, 50% of all the responses specifically revolved around these two things negotiation skills.
but you'll notice here pricing wasn't the big thing here.
Number one: surety of supply, right on time delivery, pricing and then quality and so on and so forth.
So, that was a big hitter with respect to gotta lift our skill sets around those areas in particular.
And then no surprise, we've got to identify new suppliers.
We have to get very creative about developing and acquiring different ways to feed materials, information.
The things we need in our supply chain to execute, We have to be better at that being able to manage that dual sourcing.
Better partnering skills and supplier relationship SRM, means supplier Relationship management skills.
And then, basically, the point about, wait a minute, what about supplier allowances? Alliances? You know, should we be doing that? And then, what can we do to mitigate or work with our suppliers too?
It would reduce the pain associated with the labor shortages in the trucking industry, and your cost and performance issues would fall out of that.
So, very good insights here, around what they need, terms of these kinds of skills.
Then we get into the rest of it, right?
So, we had technology, right? We have, what, 10% of everything wrapped around, you know, IT systems, implementation, upgrading skills, overall.
Much learning about how artificial intelligence can come into play, how automation and digital transformation can actually work.
And, surprise, surprise, you know, we gotta get back to using our ERP systems properly, and, yeah, Excel isn't going to go away.
So we'd better be Scaling up our folks to have better analytical skills to work through things. And then here's dimension here around cybersecurity, This would be supply chain, supply chain security.
There's a couple of pieces to this.
There's the disruptive side, all right?
The bad guys, you know, we're actually causing problems in supply, but then more importantly, How are we going to work with suppliers to to design into their products or services?
We provide to make it proof, right? Our ability to fight off cybersecurity issues and actually building that into our future products and services.
We need to be, have skills to really understand what that oh, as procurement supply professionals, getting upstream into our suppliers and assuring that they're thinking about these things.
If they're helping us figure out the best ways to assure the secure supply chain, not only for just getting us the stuff, but also all the hacking and, uh, and, uh, ransomware, and all the other horror stories we hear about when you know people are hacking into the systems.
Every single machine, a piece of equipment nowadays, needs to be interfaced. You know, we think about digital transformation and interoperability of equipment.
Well, there's all kinds all gaping holes where you only have really old technologies and controls, that gets connected to the Internet and that goes without the right kind of firewall. You just opened up the back door for the bad guys to come in through your machines into your network.
It wreak havoc your company.
So this is a big deal in end to end supply chain management.
Then we had inventory and operations planning, planning management, forecasting skills, being able to cope with the whipsaw, unpredictable, and variable demands, mean in the automotive industry, which I know well being at Michigan, chip shortages.
I won't go into the story about why all that happens, but that has driven all kinds of malaise across the automotive industry and in certain kinds of commodities also being scarce.
And that's cause really where things to happen to the supply chain.
For example, it's Friday, We're scrambling to get our last orders ready to go, and they call us at 459 PM on a Friday and say, Oh, by the way, we're shutting down our assembly plant.
Next week, don't ship.
So, that kind of stuff going on, as well as your ..., sales, inventory, and operations planning, if you're not familiar with jargon.
What are those best practices? What are some of the options we have to improve our capabilities from an inventory management perspective?
Have inventory of the right places in the supply chain, at the right level of completion.
So that we can actually be flexible and nimble to respond to changing the demand pattern.
Be able to repurpose different materials for different customers on the fly would be all pieces of that, in terms of strategy.
Then we had logistics, and all these other things here, right? The management of logistics is a skill set.
A very specific skill set, can't necessarily always outsource it. It is a skill set we need to get better at within your organizations.
Should cost development skills?
There's some pretty powerful stuff out there now, on the marketplace available around modeling and determining what you really should be paying for things, really getting good at understanding the correct indices, K pricing too, and things like that.
I've heard a lot about financial acumen that I hadn't been hearing a couple of years ago, so this stronger financial acumen we'll collaborate with with the finance group around longer term enterprise risk tradeoff decisions around supply because in the past, it was always about supply chain efficiency. Drive down the cost.
Less inventory just in time versus supply chain.
effectiveness, and I think there's, there's an awakening here around we're paying the price in some cases, albury large enterprise cost associated with becoming too efficient versus effective supply chains.
The quality came up, surprise, surprise, as a skill set that we need to get better at as well.
All right, so that brings us to polling question number two.
And, again, just as we did and polling question number one, I'm very interested in what this audience would say, from your perspective, what do you think are the most critical buckets for training?
If we can go ahead and run that polling question now, and I'd be interested in the statistics on that, very good run. Just to give you a time check, here, we're five minutes away from the Q&A portion. So I will run the quiet the poll as quickly as I can over here, So it's coming.
This is our top three priorities for your organization this year. Is that the ball?
Is that the right one or its core skills development right here for skills development this year for skills development this year?
Yeah, all right. So I did, the poll is not saying that explicitly so for the audience, you know, focus on skills development specific which one of these areas are most important to you for skills development? Is it cost price inflationary issues?
Supplier? Sounds like supplier management and development and maintenance, logistics, staffing, or on time delivery and lead time?
Yeah, that's a shame. Apparently, the polling question didn't get set up correctly.
Yeah, the second one has the pretty much the same warning, I think, that Brian needs to combine them. So, I'm just going to, I'm just gonna move on from this. Ron, if you don't mind, you only have an audience before we wrap up, so let's make the best use of your time here. So I'm gonna close, and, and not share this one. Just say if you can keep going.
All right, very good.
Get my camera out of the way here, so I can see the slide myself, just give me another split second, here we go.
So, we're not going to do this one, because we didn't even get a chance to do the poll, Right? What were the other supply management skills priorities for your organization? So we're gonna pass by that, and we'll get into the Q and A here in a moment.
So, if you've never heard of the next level Purchasing Association, they're the world's largest community members, nearly 200,000 people, in 160 countries, around the world.
And they offer it online, on demand certification programs, in supply management, though these two year, the ...
CPOE being new, been working with them over the last couple of years, to get those programs perfected and brought to market.
They're all about powering people to move forward to master the most.
The most important challenges, and then finally, this learn to do it model and graph Adams information here. If you want to learn more about that, but it's outcome based, Roy, based training.
We were picking specific objectives, organizational objective, like getting a lot better supply risk management, for example.
And having live training, right? And actually doing activities to drive toward outcomes within the business.
Then, my company, just briefly about us, I mentioned that earlier, are all about providing thought leadership and people who fill the gaps to make things happen.
I'll let you scan that for a few seconds.
Just the kinds of roles that we get involved with, help our, our customers, and our partners, get the skills and the abilities.
they need to move the needle quickly, and then, just without belaboring it, there's levels of talent. You know from architect, braid.
Expert can plugin to get things done within organizations at any level.
Be it jumping into purchasing, to help change the parts down, to meeting this major initiative, to rethink how we manage our supplier development, and risk management strategy, going forward at the architect level.
I'll just give you a flavor for that.
Could come out and visit us at the website, learn more about it, if you'd like.
So, with that, I think we can move into Q and A Now.
what we've covered here is a bit of the demographics: shared data, what we learned, and we've got some feedback from the audience around the big challenges, and what are the most important skills, And a bit about us. So with that, I think we can move into Q&A.
That's outstanding, Iran, Thank you. Thank you for sharing that. You know, that, those insights from what is a very recent survey and the on this, on this, on the topic of supply chain. So, a number of different questions here, and I, and I encourage you to continue to ask this questions. I'm, I have another monitor here that has, that captures all the questions that you're bringing in. I'm gonna get to as many of them as we have time for, so continue to post your questions. And I'll relate them to run in real time here. So the first question has to do with specific technologies. You talked about the transformation that's happening on supply chains for greater effectiveness, not so much efficiency effectiveness, which is an interesting shift. And and then you'd mention, I feel Technologists and Mohan Sreenivasan asked about blockchain.
And, and this is a very good question, I think, because there is the high, and there is the reality of blockchain.
So from a practitioner's standpoint, what are you seeing Ron out there in the marketplace right now? That's not just the concept of blockchain, and maybe it's worthwhile to talk a little bit on what that concept could be.
But then the follow up question is: are people using blockchain and their supply chains? Are you seeing that being deployed? Or a still largely technological concept that hasn't been implemented yet?
You're saying a lot, when you talk digital transformation, blockchain are just a piece of that, right? So, it's, by far, not not a major piece of digital transformation.
It's all about, a couple of years ago, we developed some awareness training, or one of our big customers, e-learning company around digital transformation.
There were 26 different forms of digital transformation. We just want to pause.
And we map that against supply chain as part of what we did.
So, blockchain is it depends on the industry you're in.
It depends on the quality of the data and the information and the willingness of the supply partners to participate in that immutable ledger, or what the transaction information as something moved through its life cycle right from the original supply point to the consumption of it.
And there's better adoption. It's not as broad as you might expect.
I don't know what the statistic is on that, that you're going to find. It depends a lot on the industry and the nature of the risk associated.
You know, when you get into counterfeiting risk of counterfeiting, you know, the risk of just, it.
Misstating was big ship. You know, those are pretty obvious things, kept going after.
But I'm going to say that arbitrary level and the adoption of blockchain, the way it's theoretically possible to really fully utilize it can't be more than 25% of maturity.
Are there any, when you mention certain industries there are implementing blockchain on a larger scale, what industry segments come to mind?
Well, the automotive sector has been a leader, in many respects with you know, zapping technologies.
They have the ability to communicate seamlessly, seamlessly with suppliers in terms of planning and then shipping, authorizations, even sequencing, heavy stuff, delivered into assembly plants, from the supplier an hour away, and only having you know, a couple of hours worth of inventory in the entire system, They've been mastering that.
Well now they began pushing that upstream into, we really want a master knowing where stuff is.
And that's been a huge headache, because even though we have blockchain, that containers are shipped out in the port, buried in there somewhere, what blockchain doing for it? Right. So it's not solving all of our problems. It's not a panacea.
It's, it's a piece of the puzzle.
Very, very good, run. Very good, following up on that, since let's stay on the automotive industry, a little bit as a great example of the supply chain disruptions that organizations are dealing with. So there are lots of questions related to semiconductor shortages and affecting the automotive industry. So, what do you see as a practitioner on, on those types of shortages?
And, and, you know, walk can planning, do, when you'll have a shortage of that magnitude, hit your, your, your supply chain.
Because, and then the preamble to that is that supply chains have been focusing for quite some time on becoming very efficient.
And they became very efficient. And then, you know, just in time and wonderful things are going on and you have a disruption like that.
And then people start saying, you know, are just in time systems are not working? Because of this disruption now. So we'll talk a little bit about this, this tradeoff between efficiency and effectiveness. But, But it's bet. and some commentary may be about what's going on a semiconductor shortages.
Yeah. That's a great point. I think there's a couple of aspects that are important.
one is, you know, the way we always did business, came back to bite us, right? So, without, you know, vilifying, anybody, there was no careful thought about, you know, We just turn off all of our orders for chips.
Stop, because, you know, we're not going to be building cars without stopping to think about what's the risk to this organization once we come back up, battery, having chips.
So, this whole notion of really thinking carefully about, how do we protect the enterprise risk?
You know, there are certain parts of the automotive industry that don't have ..., why?
They kept the orders in place right there, that they recognize, that was a significant risk.
There's other automotive OEMs that are struggling to this day, right of dealing with that.
So, there's an important lesson learned there around really understanding what are the sources of supply risk, better, longer term, what do we do to mitigate that in terms of our policies or procedures when things happen.
Second piece is around, you know, thinking about development of near shore ... of the capability and inventory. There's huge initiative are out there.
I'm sure somebody will talk about it during the conference with Government, It has been working on managing supply chain risks for the country, right, The United States, for example, Then there's been a lot of discussion about the effective versus the efficient supply chain. You'll, you'll, you'll find very quickly that when it comes to events.
you're the aerospace industry and government defense. There are way up front when it comes to making sure that we're mitigating and preventing serious disruptions to supply the back, or ability to defend our country and repeat or people.
There's some leadership there.
The third piece there is what can we do to accelerate standing up capacity in the United States or near shore so that we're not totally dependent on Chinese sources, for example.
So, there's a big move to very quickly put in a new chip manufacturing facilities Problem is, it takes two years, stand up a new chip manufacturer.
Once you decide you're going to do it, actually beginning to make chips.
It's almost a two year cycles.
We're going to see here, in the next next 2 or 3 months, some of that capacity should start coming online.
I'm guessing, by the end of 2022, the chip shortage will be fine, memory and hoping for the automotive industry, in particular.
Yeah, those are very important perspectives on that, on that note, for the audience on Day three, we're going to have Rosemary coach talking to us about this topic of re-assuring. She is actually the Founder and Executive Director and chairman of the board of the re shoring Institute in the United States. And it's in the, so there's, she's going to be going deep into this specific item.
You just, your perspective cure is wrong. Because you work across so many different industries, re-assuring. Takes some time to, to, to to know to make it happen. What is the pace that you see on that is that people, is, people talking about restoring people are actually doing the re-assuring at this point, what are you observing across industries right now?
Well above a lot of people talking about re-assuring and there's a lot of action to do the re-assuring.
So you heard the term ..., which would be different parts of Mexico, specialize in supporting different kinds of industries. You know, that's been with us for a long time.
But there's some development of, you know, capabilities within Mexico, where there's, there's, um, facilities that have been stood up for recycling purposes, where they have a factory space, They've got the labor.
They've got all the legal stuff handle.
All you need to do is bring your equipment and the know-how and they handle everything else for you, And that's kind of a kiosk thing.
That can literally be done in 30 to 90 days, right? And that's a huge undertaking, but something that organizations are really are looking at.
There's definitely a move to, you know, what can we bring back and ours to make ourselves again.
We've made a decision to move offshore.
And I find that an interesting dichotomy there, which are, even within the automotive industry, I've talked to executives that are like, we're getting out of turn.
All right, I've talked to executive to say, we're gonna get bigger.
The ladders, because they figured out how to work with the Chinese within the constraints of what they're all about and coming up with the right level of partnership and, you know, basically a mutual benefit are actually increasing their stake, surprisingly or not.
So you definitely have polarization there but I think, Bob, by the large, by and large, there's definitely a heavier swing toward effectiveness, side of supply chain and the re-assuring or the near shore of crucial component tree that we can't produce without.
Very good. Lots of comments and questions here. Really, First of all, thank you for the fantastic presentation, Karen Corby mentioned that Mohan Srinivasan appreciates your answer related to blockchain as well. We have time for one more question here before we wrap up, wrap up this session, and set up the next ones.
And my question is a bit future looking, what do you see the rest of 20 22, shaping up to be and maybe special of the focus area for supply chain planning and development?
For the rest of 2022, what, where do you see the main focus of the industry, when it comes to supply chain?
It's going to be a little bit dependent on the industry itself, right?
And the degree of exposure, they have to, I'll call it sourcing from overseas to support there, their ability to perform, so it's really going to be industry specific in terms of what they're going to favor one strategy versus another.
I think, generally speaking, you're going to be looking at, What are we going to do to get a ticket, controllable cost, right?
And this comes back to better rotation skills, having developing better suppliers, have the ability to partner with us and help us share the rescue, if you will, and begin to mitigate that and move it in the right direction. There's a ton of effort underway of picking a really hard look at what can be done in Mexico versus overseas here in the United States.
I think that, you know, certain industries like the automotive industry, there's not going to be a huge change.
Terms of what they're sourcing is, chips aside, right, maybe a few other things are crucial.
Other industries, you're gonna see a lot of pulling it back toward, you know, the home country, that's going to be a big push because it's just been too painful.
With respect to code and even ship to customers, being put on the allocations, that was, you know, in the furniture industry of all things, you know, RV industry is going crazy, right?
Well, look out, everybody's on phone mail applications.
What you can't even make seats and couches and get them into those are ways to get them out the door and time.
Customers are having to go this is not just automotive. mean that's pretty interesting US related vehicles, but I found that to be kind of a fascinating. How could it?
If an allocation is on file, but you have feedstocks chemicals. Some of those chemicals come from overseas.
And it's a ripple effect.
So it's much bigger question that we can answer here at this time.
That's for sure, Ron, thank you so much. What is the best way?
I know what you and your team of experts are working across all industries in the United States and abroad, Accelerating supply chains, you know, improving supply chains. What is the best way for the audience to get to know what you up to, and maybe contact you directly when they need some support?
Well, I'm all over on LinkedIn so you can learn about me there, Ron Crabtree and there's Google, Ron Crabtree and supply chain or Lean six Sigma. You get a million hits, are Crabtree ... dot com, if you want to e-mail, that's great.
And matter experts dot com would be our main company website company and just learn more about what we're up to.
There's quite a bit going on there in terms of information about what's going on, and then, of course, continue to be very involved with thought leadership.
So if you're looking for sources of information, like, where can I go to get more information about procurement? For example, you know, I can connect you with NLP and other organizations.
Or if your digital transformation is on your mind, who can talk to me about the best, you know, cloud based asynchronous planning across the entire supply chain, so we can optimize for flow inventory.
There are people that can help with that, so I'm happy to share.
Very good run, so I have a request for you. Please go on to the LinkedIn posts that I have on there, my name on LinkedIn, and put a comment in there, because I didn't have you on the original listing for this conference. And I want to make sure that people have a way of connecting directly with you. So, make a comment in there. Great presenting to you this morning. This is going to be an easy way for the audience to go in there, and then see your name and click on it. Connect with him a LinkedIn. Find out more about what's going on. I want to thank you on behalf of our global audience today, for taking the time to share your tremendous wisdom, and expertise with all of us.
Awesome. Thank you, sir.
Thank you, Ladies and gentlemen, That's wrong, Crabtree its CEO of matter, experts with us, sharing his wisdom about supply chain. And there is a whole lot more to come. We have three outstanding presentations is still today. Lots of questions about, am I going to have access to this presentations?
Yes, you will. You, these presentations are being recorded and for several of you who will be watching, them, on demand, link and password will be sent to you next week or two after the conference is completed. Now, what's coming up today, still? We are going to be heading to California next, where we're going to have a world expert on supply chain sharing his expertise with us specifically, about how to achieve supply chain control for end to end visibility.
And I'm talking about gender, race, the measurement partner of Enhanced international Group. After that, we're going to shift into supply chain, disruptive technologies, and we're going to have a global technology leader, And the senior director, for you, I pass with us. And she buys you das is going to talk to us about how automation brings value to supply chain management today. It's going to be talking about the latest in terms of intelligent automation, being applied to supply chains.
And then, we're going to wrap up today, with me where I am going to cover with you over the benchmark of more than one thousand great, enduring organizations of our time, what they look like when it comes to digital transformation. But we're gonna get to the point that there is no digital transformation without business transformation, without cultural transformation, And my session will be focused on supply chain and transformation. There has been a tremendous acceleration on cultural, business, and digital transformation across all industries. So, I'm gonna share with you the latest off the best of the best organizations on how they are doing right, and what it looks like. So, I hope to see you in the next three sessions.
We're gonna wrap up now, so, I, I finish this session and that I re-open at the top of the hour, so take a break now, I will launch it back at the top of the hour, with Jim ..., and, and Joanne Supply chain control.
Ron Crabtree, MLSSBB, SCOR-P, CSCTA, CPOE® is CEO of MetaOps, Inc. Ron has more than 20,000 hours of hands-on experience in facilitating and leading change and process improvement. He is a co-author or author of 5 books on operational excellence, including Driving Operational Excellence available on Amazon.com. Reach out to connect with Ron via LinkedIn at https://www.linkedin.com/in/roncrabtree/ or contact him directly at firstname.lastname@example.org or by phone: 734-424-1455.
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