Kimmel & Associates had the honor of presenting at University of San Diego’s 10th Annual Supply Chain Management Institute Spring Symposium (virtual event). Lynn Failing, Executive Vice President presented The Future Supply Chain Workforce. Lynn heads up our Logistics & Supply Chain Division here at Kimmel & Associates and has been with the company for over 20 years. He is an expert in his field.

In this recording, Lynn Failing shares his unique perspective on the following:

Supply Chain Career Management in a World of Change

• A Planet in Change: Some Snapshots of “The Big Picture”
• Designing Change into Supply Chain Business Practices
• Using “Change” in Personal Career Management

Video Transcript

Intro

Hi everyone, Kimmel & Associates had the honor of presenting at the University of San Diego's 10th Annual Supply Chain Management Institute Spring Symposium. Lynn Failing, Executive Vice President of Kimmel & Associates, presented The Future Supply Chain Workforce. Lynn heads up our Supply Chain Division here at Kimmel and has been with the company for over 20 years; he is an expert in his field. Thank you, Lynn, for sharing your unique perspective.

Everchanging Supply Chain Management (0:29)

Today we are looking at the future of the supply chain workforce and the changes that are happening globally that affect how that workforce is going to have to change in the coming few years, and I started with a slide of the world, the picture of the planet Earth taken by the astronauts in space when they were in the Apollo mission. And the reason I love this slide as an illustration of supply chain is that the planet itself, our planet, Earth, is a supply chain with both limited and unlimited resources in terms of fuel and energy, and that it’s an organism that everything is connected. So, my interest in supply chain actually begins with the planet.

Supply Chain Career Management in a World of Change (1:25)

So how do we begin to look at supply chain career management in this world of change? I want to look at it from three simple perspectives. First of all, some snapshots from what I call “The Big Picture.” How changes are happening overall on the planet and how we need to react to that. And then how we design change into supply chain business practices. And then how we use “change” in our own personal career management.

A Planet in Change: Some Snapshots of “The Big Picture” (1:55)

So in terms of this world of change and this big picture. There are some of what I call long waves, big global cycles, which are important for us to address. Before we get into the details of that, let me tell you a little story about what I call the long waves. In 1971 when the Nixon administration was in the process of what we call here in the states “opening China,” Henry Kissinger went on a secret trip to meet Zhou Enlai, Mao Zedong's number two deputy in China. Both Kissinger and Zhou Enlai were and are phenomenal students of political history and at one point during their exchange, Henry Kissinger turned to Zhou Enlai and asked him, “Zhou do you think the French Revolution (remember, that’s 1798) was a success?” And Zhou Enlai thought for a moment and returned with a response to Kissinger: “It’s too early to say.” So those long waves of cycles take a while to work out, frequently half a lifetime. Let's look at some of those components.

So let's begin to look at some of the issues that I believe we are already facing and will continue to face over the next 20 to 30 years in supply chain.

The first thing is what I call climate change and whether you think it's credible or not, things are happening. Every Fortune 100 company is finding a way to react intelligently to the differences that are happening on the planet. Every automotive company has announced plans to go electric at various dates. Many companies, including oil companies, are announcing movements toward what they call “carbon neutrality.” So things are happening. The interesting thing on that, assuming it continues, is what are the changes for us in logistics and the thought of the Arctic Ocean, which is being most affected by climate change, could become the biggest ceiling. Think about that for Asia/U.S. trade and beachfront property on the Hudson Bay in northern Canada. Fascinating prospects for how things might happen over the next years in terms of how climate change affects supply chain.

Secondly, the big category is what I call 9/11 and Governance. That the intersection between state actors and non-state actors is becoming much more complex. That we have nationalism, sectarianism, and globalism all happening at the same time. And so the whole exercise of political and economic power and the levers that exist in there are changing. And the nature of power is changing simply because, just to give you an example, the Colonial Pipeline shutdown: these are non-state actors which are acting to profoundly affect the supply chain.

Now the thing that is happening in parallel is that we have an increasingly multi-polar world. If we look at the world GDP share of advanced vs. developing countries, in 1980 the mix between the relatively small number of advanced countries was 75% versus 25% for developing countries. That in 2021 is down to 60/40. To give you two other examples: The United States post-World War 2 has averaged in the low 20s in terms of its percentage of global GDP. One factor there is that China, which in 1995 had 2.5% of global GDP, is now over 15% and projected to overtake the United States by 2030. So increasingly we do not have a unipolar, we have a multi-polar world both economically and politically. That changes how we act in supply chain.

Finally, the piece that affects all of these other three and accelerates them is technology. That is the whole AI, artificial intelligence, machine learning, all of that sort of stuff that is changing how we communicate and how we live and will continue to revolutionize over the next decades. The interesting thing about technology is that while it allows centralization of power, at the same time, it also allows simultaneously the atomization or outbound forces. For example, pre-social media and the internet it would have been difficult for many of the groups such as Al Qaeda and ISIS to communicate globally without that technology. So those forces, while they allow state actors to accumulate power, they also allow non-state actors to accumulate members and leadership in different ways, both of which are pulling in opposite directions. And what that means is that in this environment in which we live, that those who are destitute, and poor are really living alongside, visually, via technology, the superabundant.

How has your company pivoted? (7:49)

In response to these global changes that are happening, how has your company, how has your industry pivoted and reacted in a proactive way to these sorts of changes?

Designing Change into Supply Chain Business Practices (8:04)

The question now is, how do your organization and other organizations begin to build designing change into your current and future supply chain business practices?

We have to bring in a new paradigm of how we manage risk in today's increasingly complex environment. And what we need is in fact a new vision of supply chain management. In other words, “a new you for a new world...”

If we look at the old paradigm of risk management in supply chain, it was the usual actors and you’ve seen them here: raw materials, customer satisfaction, inventory costs, interest rates, business efficiency, economic growth, our position in the marketplace, and how much it costs to actually bring the stuff in and bring it out. That is the old paradigm.

So while each of us and all of us deal with these traditional struggles in terms of corporate risk management, there are in fact new monsters out there. The old monsters may be there, but it is not just the magnitude of risk which is changed it is also the character and type of risks, and there are new monsters which we have already identified.

So let's just go through those new monsters and add one more: The whole dynamics of changing global governance and how that works. The issue of technology and artificial intelligence, machine learning, block chain, all of those complications in the technology space. The increasingly diverse multi-polar world, in which both companies and nations are struggling to find ways forward. And then the impact of climate change for good or for bad throughout our planet and how that will affect business operations again, as well as nation-states. And finally, one more: black swans. Now what are black swans?

Black swan events are unpredictable events which change how companies, nation-states, and indeed the world moves forward. The most recent example of course is Covid 19. For those of us who were doing supply chain, we all remember Fukushima and the nuclear disaster and the impact that had on Toyota’s single-sourced supply chain, which meant that they couldn’t provide cars for over six months because of a single part which had been taken off their inbound supply chain for their vehicles. A most recent one earlier this year was when the Suez Canal was blocked for two weeks and caused 10 billion dollars of GDP damage to the globe every day that that ship was sideways in the Suez Canal. And finally, one other interesting one is that Yellowstone is a horizontal volcano which blows every 500-700 thousand years; its 700,000 years since its last eruption. We are past due; it would certainly change the supply chain and a bit more if Yellowstone blew.

While we have these inside defense variables of our traditional impacts of how we cope with the supply chain, we are only beginning to learn how to manage these new variables. One possibility might be, is this the obituary of lean? I know that’s provocative, and it is deliberately so but “Whatever your opinion, lean did its best and achieved great success in what it set out to do. For a while I think that it was the king of what it surveyed; but times change, and, in today's lightning pace of today’s world, it simply couldn’t keep up. Its time has been and gone.” I would not say maybe the time has been and gone but certainly we have a new co-king and that’s called flex. The ability to adapt is as important as the ability to respond.

And so, for yourself and for your own company, let me just raise 4 questions for you.

1. How many listening to this today only purchase and sell products in the US market? I would venture to say probably zero.
2. Have any of you NOT been affected by the new monsters in your business? I would be fascinated to hear those stories.
3. And then in terms of your perspective, how are nations, companies, institutions, and individuals responding to these new variables? We can ignore them, fight against them, or find a way to work with them.
4. And then personally, how are you coping with the increasing velocity and the shifting vectors of change? It’s a complicated and turbulent world.

So in many cases, as I like to say, “it's not about the answer, it's about designing a flexible company because this is as important as an efficient one.” So, we actually design for change. Let me give you an example of how that’s happening in some companies. There's a new paradigm at work of where we are moving away from what I call business process outsourcing, the old BPO, to what I would describe as business process integration. For example, an aerospace giant and an innovative 3PL combined their procurement exercises to ensure on-time delivery of products instantaneously and at the right time for working on the aircraft. And so they linked with all of their tier 1, tier 2, tier 3, and even tier 4 suppliers to ensure this sort of, not a “hub and spokes” model, but a real business process cooperation model which affects all the businesses and every component of every business.

So in terms of this, we move away from simply internal integration to external integration. So, in moving from business process outsourcing to business process integration. The new paradigm at work means that rather than simply collecting profit in the center of the activity, that upstream and downstream organizations are also sharing in supply chain gain sharing. They become partners, not just vendors or customers. And it's actually more than integration, it's how we synchronize and interestingly enough, competing better actually happens when some organizations and some industries cooperate with each other as well.

Because if we don’t do this then I’d like to remind you of what I describe as the “Seven Last Words of Bankrupt Companies.” “But we've always done it that way.”

So how do we begin to reshape corporate governance before we begin to look at our own supply chain careers? How do we begin to reorientate the companies we work for in this global change environment? First of all, I think we have to begin to reshape board-level leadership. We need to include experts in global economics and geopolitics as part of a board perspective.

We probably need someone who understands AI/machine learning technology and how that’s going to impact logistics in supply chain and businesses models and practices. For example, in today's world we’re looking at a critical shortage of drivers on class A vehicles, but it is predicted that between 2030 and 2035, all of those vehicles will be driven autonomously. How will that affect labor? And then thirdly is what I say the business/climate intersection, as that changes how we move stuff, how we make stuff, and where we get stuff.

And maybe rather than simply having the traditional commonly referred to as the chief strategy officer, I’d like to change that title. It is not simply about strategy, it's actually about change so maybe we have a chief change officer. Like many Fortune 100 and 500 companies are doing, and then many even smaller companies are doing, they are deliberately building what I would call non-output related innovation time into their business plan dedicating creative times for crazy ideas, new ideas to percolate through other people to get insights into how they can better not simply manage change, but go along and lead it. And then finally it is not simply about hiring subject matter experts, it's how we companies begin to bring what I would describe as multi-lingual talent: people with a variety of skills. Because what we are going to be seeing over the next 5 years as we did in a recent survey of business professionals like those who are listening to this: The feedback we got is:

• “Increasing complexity due to increasing globalization.”
• “Continuing technology upgrades will provide integrated real-time data visibility both within companies and between corporate partners.” (After all, that is what blockchain is about.)
• “As government and global regulations and opportunities proliferate, supply chain solutions also need to be solved globally.”
• And interestingly, “Supply chain and logistics are taking a higher priority in companies which haven’t put them at the center of their business model in the past.”
• And then my favorite one, probably because it refers to a television commercial, is: “Stay thirsty, my friend. Change is everywhere.”

Using “Change” in Personal Career Management (19:20)

So how do we begin to respond as individuals using this paradigm of change in our own personal career management? How do we get to a “new you for a new world?”

My suggestion? Be more than another subject matter expert - whatever that expertise within supply chain is, and there are many. Become multi-lingual, not only in terms of supply chain disciplines such as planning, procurement, operations, and transportation, but also become multi-lingual in other areas, in finance, in IT.

Learn to “connect the dots.” And I like to say the problem is not simply the forest and the trees and being able to see the forest and the trees, it's being able to see trees that other people don’t even see. So cultivate your curiosity.

The new you is a more integrated leader. Whatever your management style, now is the time for you to be better.

Stay ahead. Be a consumer of ideas. Keep up with the trade magazines because otherwise, you will end up as a technocrat rather than as a true innovative leader. The crucial management decision is in hiring talent.

And in looking at yourself and your current career, compare your own personal career direction with your company’s current career direction. Is it time, as the book used to say, to “move your cheese?” Or are you a “whole new ball game” type of person in a “be very careful,” “but we’ve always done it that way” company? Make sure your lifestyle/business style coheres with your employer.

And let's look at some of the drivers which make us happy. This is from a 2019 logistics management salary survey. What makes us happy in our work? I've highlighted what I've described as the soft points in work in red, and what I called the hard issues in black. And what’s interesting is there’s a lot more red than there is black, and 3 of the top 4 are all soft issues. Feeling of accomplishment. A relationship with your colleagues. A relationship with your boss that’s meaningful. Certainly, salary and the company's financial health help secure that but at the same time, you'll see so many of these factors are actually soft factors which relate to how you work together in a group for a common goal. In other words, it's not just a job, it's also a home.

So let’s flip the coin and look at what makes us dissatisfied at work. Once again, a lot of soft issues. Company politics, high stress levels, lack of recognition, and heavy workload. Of course, you could almost describe “no room for advancement” as a failure of a company to create a soft plan toward valuing its employees. So moving forward, it's as many times soft issues as much as it is hard “dollar and cents” issues that make us dissatisfied and look for alternatives.

And certainly, in this post-Covid world, it's useful. I've been speaking with a lot of people about how their personal and professional priorities have shifted as a result of having gone through this experience. NPR recently communicated that 25% of employees in the United States are currently looking for a different company. So change is everywhere.

So my goal for you, as I've said before, “Don’t to look for a new job, look for a new home.” And there are 4 components of that in my view.

First of all, the company needs to have a vision for the future. The people you meet need to be people who are part of what I call a curious community. They need to have enough leaders and enough followers who can really deliver, who can make it happen. And finally, they need enough financial and technical resources also to make it happen. That’s a home, so look for homes, not for jobs.

And finally: I go back to a 4th century bishop who reminds us all that “Sin happens when you refuse to continue to grow.” - St. Gregory of Nyssa

So happy growing! Thanks, and take care.