Transforming Today, Not Tomorrow

June 28, 2017

By Omera Khan

Increased turbulence and volatility are characteristics of the “new normal” operating environment for contracting, and will continue to be a struggle for many companies.OmeraKhan3 Those that do not embrace this will fail to adapt and will miss out on making the fundamental transformations required to succeed in this environment.

Conventional lean initiatives in the supply chain have focused on improving efficiencies and reducing cost through the elimination of waste. However, today’s supply chains have been left more vulnerable to events that previously may have only caused minor, local disruptions. They are also slower and less responsive to market changes, and fail to innovate at the pace demanded by their customers.

It is imperative for businesses to recognize that they have the opportunity today to invest in transforming their supply chain strategies, processes, competencies, and culture if they are to prepare for the uncertainty that lurks in the not-too-distant future. Supply chain resilience and adaptability to a changing world are as important as ever.

When creating a vision for the future, businesses need to embrace uncertainty and develop dynamic systems capable of adjusting quickly to volatility arising from factors such as:

  • Currency fluctuations,
  • Changes in sourcing,
  • The reassessment of distribution and inventory management,
  • The likelihood of more local-to-local sourcing or transport options,
  • New trade routes or barriers, and
  • The added costs and risks as a consequence of these factors.

Resilience and agility have been advocated for some time as ways to deal with unknown risks or difficult-to-detect risks—such as natural disasters and cyber risks. It can be argued that the long-term impacts of geopolitical issues (e.g., the pending Brexit) on our supply chains are also unknown, but we know for sure that it will be a different operating environment to the present.

Those companies that start to plan and invest in a business transformation strategy today will be better prepared for the unknowns and challenges they may face in two years. Waiting those two years to act may be too late. The biggest threat is ignoring the issues and not recognizing that change is inevitable.

On the Upside

Global disruptions could be seen as a shake-up or wake-up call for contracting; a catalyst for change requiring businesses to transform and plan for resilience and greater flexibility. Those companies that do will have a better chance of adapting to a changing landscape—such as how the E.U. landscape may look in the near future.

Greater collaboration is required within industry to work more cooperatively and support the network to thrive. With the prospect of more local sourcing and trading, we may see the emergence of business clusters operating as an almost vertically integrated enterprise, such as the textile manufacturing verticals in the 1970s and ’80s. The new business clusters would link businesses, training, and a wide spectrum of entities operating in the chain, thus creating new jobs and competencies that are better and more closely aligned to actual business needs.

However, the question is: “Can this vision become a reality?” Are businesses prepared to disrupt and transform the status quo? We currently have a skills shortage in logistics and supply chains, yet we have thousands of graduates in these fields. Is it time to retrain the trainers? Tomorrow’s leaders will need to have skills and abilities in areas we do not yet know. Is it time to implement the same dynamism in our teaching and training, creating adaptable and flexible people who operate optimally in an uncertain environment?

These are challenging but exciting times. There is no doubt that continued volatility and turbulence will disrupt—and they will create uncertainty, as well as opportunity. Businesses must use this time wisely to shake up their supply chains and transform their practices and areas where greater resilience, flexibility, and agility will help them adapt to the new scenarios of tomorrow.


Omera Khan is professor of operations and supply chain management at Aalborg University, Copenhagen. She has gained international recognition for her research in supply chain risk management, and her current research focus is on cyber risk in the supply chain and the rise of emerging technologies to impact the supply chains of the future. She will present the keynote on Monday, July 24, at NCMA’s World Congress 2017, in Chicago, IL. 


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