1、INDEPENDEN T P U B L I C AT I O N BYRACONTEUR.NET01/05/2022#0802Going beyond ESG to create sustainable supply have a limited supply,”Food says.“Were stuck in a world that is struggling to catch up.Until we create the capacity to do that,further black-swan levels of supply chain disrup-tion are inevi

2、table.”He predicts that we are likely to see such problems for years to come,because of the interconnectedness of the world and its many moving parts.Are there any other factors causing the bottlenecks that were seeing in our day-to-day lives as consumers?Whats behind the increases in lead times for

3、 the deliv-ery of goods and the reductions in the range of products that shops are stocking?Its not only black-swan events that have restricted the flow of containers around the globe.Demand also interacts with supply in a way that can make a meaning-ful difference,as Mark Johnson,professor of opera

4、tions management at Warwick Business School,explains.“Disruption is a regular occurrence in supply chains,but the recent challenge has been that demand has increased sig-nificantly,”he says.“Normally,supply chains rebound from disruption when demand is relatively stable.That has not been the case re

5、cently.”Although inflationary pressures could change that,demand hasnt slowed for the past two years at least.Rather,it has shif-ted:the same money wed have spent in the high street we are now spending online.Fixing the situation will be difficult.There is a fundamental imbalance and A bevy of black

6、 swans:how to endure the epochof disruptionHas building resilience into supply chains ever been more challenging?lack-swan events are meant to come about rarely.We often talk of them as once-in-a-generation occurrences that batter the global econ-omy and alter how the world works.But theyre often mo

7、re common than that.Over the past two years supply chains worldwide have been disrupted signifi-cantly by factors including the Covid-19 pandemic;the unintended ramifications of Brexit;the week-long blockage of a vital trade route caused by the grounding of a container ship in the Suez Canal;and,mos

8、t recently,the war in Ukraine.Any one of these factors could prove sufficient to blow even the best-planned supply chain off course.As China,the worlds factory,struggles with pandemic-enforced port closures,supply chains that were already under stress are reaching breaking point.The world is redrawi

9、ng its economic activity to cut out Russia after its invasion of Ukraine an action that is affecting supplies of grain and cooking oil,as well as the oil we use to power our factories and vehicles.Catastrophe is being piled on top of catastrophe.“The expanded global nature and con-tracting diversity

10、 of supply chains have together exacerbated this effect,”notes Tim Morley,regional director at Inform-ation Services Group,a global research and advisory firm.Dave Food,head of supply chain at software developer Board International,agrees.“Most supply chains have some element of protection built in

11、to combat disruption for instance,extra capacity,extra inventory,alternative suppliers or different routes to market,”he says.“The problem is that disruptions are occurring in multiple locations on the supply chain,from source to consumption point,which highlights that the existing protections arent

12、 enough.This is not one big event;its multiple micro black swans.”Such events have a meaningful impact on everyones lives because of their chao-tic effect on supply chains.For instance,a few months into the pandemic in the summer of 2020,all food and consumer goods firms operating in the UK reported

13、 production and distribution problems resulting from the Covid restrictions that many nations had imposed.“The issue is how organisations can pro-duce further capacity when they already Oliver BalchA British journalist with 20 years experience of writing about all aspects of the sustainability agend

14、a.Tim CooperAn award-winning freelance journalist with 20 years experience.He has written forpublications including TheGuardian,The Telegraph,and The Spectator.Mark HillsdonA freelance writer specialising in environmental matters,sustainability and the great outdoors.He is a regular contributor to T

15、he Guardian,Ethical Corporation and the BBCsCountryfile magazine.Georgia LewisA journalist who has written internationally about a wide range of sectors,with a specialinterest in Africa and the Middle East.Chris Stokel-WalkerA technology and culture journalist and author,with bylines in The New York

16、 Times,The Guardian and Wired.Sally WhittleAn experienced business and technology writer for national newspapers and B2B magazines in the UK and US.problems keep piling on top of problems,notes Johnson,who adds:“Ships arent running all routes,there isnt enough port capacity and there arent enough dr

17、ivers,trucks,trailers and containers for this situation to be resolved any time soon.”Johnson believes that there is little to no chance of a swift resolution.“Well continue to see disruptions unless coun-tries and businesses get serious about building resilience by holding more inventory and excess

18、 capacity as well as restoring industrial capabilities that have been offshored,”he predicts.“I dont see this happening,owing to the primacy of finance and accountancy in determining firms investment decisions.”The big questions that consumers,business owners and analysts will all ask are simple:are

19、 we stuck in supply-chain disarray for years to come?And,if such turmoil has indeed become the new normal,how should businesses respond?There are several schools of thought on how best to respond to the current circumstances.One is to try to achieve the best view of your supply chains not only your

20、own,but those of key partners,suppliers and customers.“The further up the supply chain you can see,the better decisions you can make,”Food says.“Enlarging your businesss peripheral vision to be able to make a data-and insight-driven decision could save you tens of thousands of pounds.Apply that acro

21、ss the tens and hundreds of decisions taken in organisa-tions every day,and suddenly your profit margins have increased.”Once you have such information,its much easier to solve problems,especially for larger businesses with more reserves.You can build capacity that will help you to overcome some of

22、the most pressing challenges.In the first year of the Covid crisis,61%of companies said that they had increased their inventory of critical products,while 55%were dual-sourcing raw materials to manage the risk of dis-ruption to one supply line.Thats not possible for every firm,of course,but“business

23、es with less capital can advance by being more collaborative,using intelligent contracting and sharing resources with partners”,Food says.Regardless of your approach,its vital to act quickly to deal with problems before they are compounded by other problems.Time is of the essence and,with disrup-tio

24、ns likely long into the future,simply ignoring the issue isnt the answer.“The pandemic remains the biggest threat some countries are still badly affected,causing a substantial impact on international trade,”Morley says.“Other threats continue to loom,while new and different factors are waiting to su

25、rface.”Distributed inPublished in association with/supply-chain-2022raconteur/raconteur_londonI N T E RV I E WR I S K M A N AG E M E N TS O U RC I N GNestls head of confectionery outlines the companys latest plan to combat child labourIs the Wests overreliance on Chinahampering its recovery from the

26、 Covid crisis?With war disrupting their supply chains,businesses are looking elsewhere for Chris Stokel-WalkerBContributorsDISRUPTIONS ARE BECOMING MORE FREQUENTNumber of supply chain disruptions worldwideWHICH MARKETS ARE MOST AFFECTED?Share of supply chain disruptions worldwide in 2021,by region N

27、ormally,supply chains rebound when demand is relatively stable.That has not been the case recentlyR E S I L I E N C EFUTURE OF SUPPLY CHAIN&PROCUREMENT24.3bnThe projected value of the global supply chain management market by 2026Statista,ReportLinker,2021Campaign director Emma LuddittDeputy editorFr

28、ancesca CassidyHead of productionJustyna OConnellDesign/production assistantLouis NassManaging editorSarah VizardReports editorIan DeeringAlthough this publication is funded through advertising and sponsorship,all editorial is without bias and sponsored features are clearly labelled.For an upcoming

29、schedule,partnership inquiries or feedback,please call+44(0)20 8616 7400 or e-mail .Raconteur is a leading publisher of special-interest content and research.Its pub-lications and articles cover a wide range of topics,including business,finance,sustainability,healthcare,lifestyle and technology.Raco

30、nteur special reports are published exclu-sively in The Times and The Sunday Times as well as online at .The information contained in this publication has been obtained from sources the Proprietors believe to be correct.However,no legal liability can be accepted for any errors.No part of this public

31、ation may be reproduced with-out the prior consent of the Publisher.Raconteur MediaSub-editorsNeil ColeGerrard CowanChris RyderCommercial content editorsLaura BithellBrittany GolobDesignCelina LuceyColm McDermottSamuele MottaSean Wyatt-LivesleyDesign directorTim WhitlockIllustrationKellie JerrardRes

32、ilinc,2022Resilinc,202218%Asia24%Europe47%North America11%Rest of the world201920203,7006,19211,6422021F U T U R E O F S U P P LY C H A I N&P R O C U R E M E N T02Constant problems in the supply chain have proved a real headache for many businesses over the past two years.As firms struggle to deal w

33、ith a succession of disruptions,the role of the chief procurement officer(CPO)is becoming ever more important.How is the procurement leaders work changing?And how are the best CPOs ensuring continuity?SPOTLIGHT ON THE CPOHOW THE BEST CPOs MEASURED UP AGAINST THEIR KEY PERFORMANCE INDICATORS LAST YEA

34、RHow high-performing CPOs procurement functions fared in 2021 in the following areasPROCUREMENT AND SOURCING STRATEGYShare of CPOS citing the following activities as areas of focusHOW WELL DO CPOs SYNC UP WITH THE EXECUTIVE AGENDA?Procurement chiefs responses when asked the extent to which they were

35、 aligned with the overall business strategy of their organisation DESPITE DIGITALISATION,THE PEOPLE MAKE THE BIGGEST DIFFERENCEHow various factors in the procurement function correlate with a firms financial performanceDeloitte,2021Vendor/supplier relationship management42%Automation and digitisatio

36、n29%Procure-to-pay27%Analytics25%Talent acquisition and retention24%Purchasing24%Sustainable sourcing16%Contracting8%PROCUREMENT CHIEFS RESPONSIBILITIES ARE EVOLVING AND EXPANDINGShare of CPOs citing the following activities as top prioritiesImproving operational efficiencyReducing costsDigital tran

37、sformationInnovationIntroducing new products/servicesEnhancing risk managementEnhancing corporate social responsibilityExpanding organicallyExpanding by acquisitionN/A78%78%76%63%76%N/A73%62%69%68%68%55%68%59%61%38%38%20192021Cost savingsCost avoidance(or performance to market)Cash improvements(work

38、ing capital,for instance)Internal stakeholder satisfactionLabour efficiency(headcount reduction,for instance)Risk managementSupplier performance(delivery,flexibility,innovation,quality)Sustainability/diversityRevenue uplift/enhancing speed to marketInnovation enablementNo formal performance tracking

39、Exceeded aimsMet aimsDid not meet aims9%3%88%8%44%39%9%44%10%32%14%12%55%17%15%14%10%63%13%20%3%69%8%17%8%56%19%25%63%12%28%44%7%21%49%37%1%13%Employee capabilities and cultureCategory management and executionBusiness-unit structure and systemsPoorlyPartiallyTightlyStrategic alignment21%17%25%37%2%2

40、0%26%Generally52%McKinsey,2021Deloitte,2021Ardent Partners,2021American Productivity&Quality Center,2022R A C O N T E U R.N E T03The unintended ramifications of the UKs departure from the EU are just one set of problems that both business and government are struggling to mitigateisruption in the sup

41、ply chain has become the norm for UK plc,with consumers on the receiving end of the delays and shortages.Can it smooth out the bumps?A recent survey of logistics industry lead-ers in the UK by project44,a specialist in supply chain management,indicates that this situation is unlikely to change any t

42、ime soon.The respondents cited Brexit and the UKs reliance on China as the two main problems,although these were far from the only ones they identified.There is a broad consensus across the sector that the effects of Brexit are real.James Hookham,director at international shipping trade body the Glo

43、bal Shippers Forum,reports that trade between the EU and the UK has declined dramatically and Covid has frustrated progress in establish-ing new trade agreements.Hookham says that Brexit has led to a significant redu ction in the number of lorrydrivers in the country,while the extra bureaucracy it h

44、as imposed has caused delays,especially when full UK border con-trols came into force at the end of January.Further import controls on foods and animal products are to come,he adds.Before the pandemic,Chinas glo bal role in supply chains was logical and conven-ient.But Beijings zero-Covid strategy a

45、nd trade disputes with the US have since had knock-on effects for moving goods.The disputes encouraged manufacturers to stockpile materials in anticipation of trade embargoes,says Laurence Dellicott,director of supplier management and fulfil-ment services at logistics technology firm Avnet Silica.Sh

46、ortages of electrical compo-nents such as semiconductors have been exacerbated by shipping delays.“Draconian measures”to prevent Covid from spreading have squeezed Chinese exports to the UK,according to Thanos Papadopoulos,professor of management at Kent Business School.These have included lockdowns

47、 in the ports of Dalian,Shanghai,Ningbo,Tianjin and Shenzhen.Consumer demand is on the increase,Papadopoulos adds,which is putting manu-facturers under more to produce and trans-port more raw materials to meet orders.But,for many companies,especially electronics manufacturers,this pressure has been

48、at odds with component shortages,leading to supply chain snarls and increased costs.“Components became scarce,shipping containers became scarce,finished prod-ucts piled up in storage and transport costs skyrocketed,”he says.More local problems are also affecting UKfirms supply chains,whether they re

49、ly on international routes or not.These in-clude higher demand than anticipated as the UK emerges from the Covid crisis and the indirect effects of energy price inflation.Hookham thinks that a fundamental problem is that“too many boxes are chasing too few ships,resulting in the congestion of ports a

50、nd inland distribution networks”.This has fuelled significant shipping cost inflation since 2019(see graph).How can suppliers overcome these chal-lenges?Some companies have absorbed the costs rather than increase prices for their customers.Some have moved from just-in-time to just-in-case strategies

51、 typically byover-ordering and stockpiling materials and/or finished goods.Lay-Z-Spa UK,for instance,makes its hot tubs in China,but has largely absorbed the increased freight costs rather than passing these on to its cus-tomers.Similarly,trade supplies firm Timco has a buffer of five to seven month

52、s of stock and 34m of orders from the Far East,while clothing manufacturer Hawthorn Interna-tional has bulk-purchased cotton to ensure that it can continue to meet demand.But such solutions will not be practical for all companies,of course.Firms should“avoid overselling and overpromising to customer

53、s”,Dellicott warns,as diversifying supply chains wont solve every problem.He advises businesses to perform robust-ness and agility tests on their supply chains.Len Pannett,managing partner at the Visagio consultancy,is a believer in the abil-ity of a digital transformation to improve the visibility

54、of activities in the supply chain.Healso recommends identifying alternative local suppliers and using methods such as 3D printing to“alleviate long lead times and save costs on spare and tooling parts”.Empowering junior decision-makers to respond quickly to problems and obtaining demand data from su

55、ppliers and customers to plan accordingly should ease the move-ment of goods too,Pannett adds.Long-term shipping contracts are another solution.But Hookham cautions that,while“Digital tools can bring scalability,versa-tility and cost reduction if deployed cor-rectly,”Pannett says.“Solutions such as

56、robotic process automation are proven to give fast returns on investment and can lend supply chains speed and accuracy.”The lorry driver shortage could be add-ressed by a new law to ease the process of hiring foreign workers.But,in the longer term,pay,benefits and training opportuni-ties will need t

57、o be improved to make the job more appealing.Yeovil-based company Bradfords Building Supplies supports its apprentices to obtain HGV licences,but Jon Rendall,the firms logistics director,says that more will need to be done to ensure that the UK has enough drivers.Better communication between busines

58、s-es and the government and between busi-nesses and suppliers will help to alleviate some problems,particularly within the UK.But others,including Brexit-imposed obsta-cles,will be harder to overcome.Pannett agrees that communication be-tween government and business is impor-tant,while advocating fo

59、r a better Brexit deal,ideally with access to the customs union and the single market.But he out-lines the challenge of realigning UK-EU relations:“Rejoining the customs union and the single market would be helpful,but bring further political implications.”As long as the appetite to make such bold m

60、oves remains weak in Westminster,it looks as though UK plc will have to look clo-ser to home to ease its supply problems.such deals might buy delivery certainty,a business could“pay over the odds”if the spot market collapses later in the year and container demand falls.Westminster has been urged to

61、increase investment to ease supply chain delays,including more money for port and rail infrastructure to improve links within the country,as well as technology and research capabilities.Investment in supply chain innovation can be a shared responsibility between the public and private sectors.Georgi

62、a Lewis Too many boxes are chasing too few shipsCommercial featureWhy you should care about end-to-end supply chain visibilityAfter years of intense supply chain volatility,companies are determined to overcome internal bottlenecks.End-to-end visibility is a core advantage in the competitive ecommerc

63、e landscapeupply chain management,for a long time,was primarily focused on one key goal:efficiency.The best logistics operations globally were those that could get goods to customers at the fastest speed but the lowest cost,which often meant keeping inventory low and just in time.This model was able

64、 to thrive in the first couple of decades of ecommerces ascent,amidst a stable and reasonably predicta-ble environment.But the Covid pandemic changed everything.Lockdown mandates rocked the business world to the core,fuelling an unprecedented level of unpre-dictability in supply and demand.A new bus

65、iness environment defined by volatility has presented enormous chal-lenges for companies to maintain availabil-ity of their products and keep a handle on escalating supply costs.Suddenly the goal of supply chain management was no longer simply efficiency,and just-in-time invento-ries were a hindranc

66、e rather than a com-petitive advantage.Single truthInternal bottlenecks exacerbate supply chain disruptions,causing delayed orders,missing information,and unaccounted-for shipments,damaging a brands relationship with customers.Though the reasons for bottlenecks can vary,the common theme is a lack of

67、 data in each supply chain link.Without a single version of the truth,supply chains lack visibility,central communica-tion and robust processes,slowing down routing and decision-making.“The pandemic exposed fragilities in supply chain models,”says Christos Chamberlain,UK general manager at Flexport,

68、a platform for global logistics.“Previously,with stable,consistent flows and consumer demand,companies could run at very low inventory levels.But when you get shocks in the system,its extremely challenging for your inventory position.So businesses have naturally been thinking about how they can appr

69、oach their supply chains in a better way.”The focus of supply chain management has shifted from pure efficiency plan-ning to attempting to embed two powerful attributes:responsiveness and resilience.Organisations require greater end-to-end visibility,underpinned by real-time data,to help shorten dec

70、ision-making and commu-nication cycles between the different par-ties in the supply chain.This visibility doesnt only enable supply chains to operate more effec-tively but also more sustainably,which is vital as ESG continues to rise up the pro-curement agenda.In the second half of 2021,Flexport saw

71、 a 40%increase in the number of clients involved in its social and environmental programmes,and the com-pany also did twice as many carbon offsets throughout the year.Connecting the supply chainTo improve the speed and quality of deci-sion-making,organisations need accu-rate data on whats going on i

72、n their supply chain,as well as the expertise to know what their options are.When 20 or more compa-nies are involved in the flow of a shipment,they must all be acting from the same infor-mation and be able to communicate quickly.Flexport acts as a control tower for supply chains.Its platform empower

73、s buyers,sellers and their logistics partners with the technology and services to grow and innovate,powering end-to-end visibil-ity across the supply chain.The technology connects the different parties in supply chains,increasing access to and transparency of critical data.This ultimately means ever

74、ybody is not only on the same page but can communicate more efficiently and make faster decisions.The visibility powers supply chains that are operationally resilient and sustainable.“If you look at how goods flow in a global supply chain now,it has historically been very fragmented and much of it h

75、as oper-ated in a black box,”says Chamberlain.“The future of global logistics is about making the flow of goods seamless.Our goal is to simplify,which were doing by connecting everyone in the supply chain,getting them on the same page around whats going on with the data and uniting them with both te

76、chnology and infrastructure to make more informed decisions.”For more information,visit S The future of global logistics is about making the flow of goods seamlessB R E X I TDhe importance of good supply chain management is much clearer to everyone after the shock and turmoil of the past two years.T

77、he basics of obtaining great value from suppliers,developing initiatives to address sustainability challenges and finding innovative solutions to better serve the business and its customers remain the same.But what has changed is a greater focus on resilience and not just cost savings.A built-in con

78、tingency that can flex quickly to handle fluctuations in demand,including switching to local supply or building up additional stock,has now become the strategy for many organisations.Developing the right resilient ap-proach will depend on individual business objectives.For some,it can mean a clear o

79、nshoring/offshoring strategy and not relying on only one supplier or one market for an essential component.The automotive sector was caught out last year,as Toyota,Volkswagen and Fiat Chrysler all struggled to get hold of essential sem-iconductor parts during a worldwide shortage.The chip shortage w

80、as ini-tially caused by Covid-related factory closures in China.Buyers could still get hold of chips from other suppliers such as Dutch and German compo-nent makers,but the prices soared as availability decreased.Balancing your strategic priorities depends on the business,the goods being sourced and

81、,of course,the sup-ply market.But it also depends on the knowledge and skills of the procure-ment teams.A buyer can make a snap decision to find a new supplier,but a trained procurement professional will see the implications from all sides and get a long-term view of whats best for the business.Trai

82、ned professionals know how to detect unethical behav-iour such as bribery or where to find cost efficiencies.Employing trained,skilled and knowledgeable profes-sionals is essential for a companys reputation and bottom line.The cur-rent shortage of this expertise is limit-ing our ability to establish

83、 and manage global supply chains.But there are also more subtle issues to be aware of.Businesses should consider how they pay their suppliers,especially SMEs reliant on speedy cash flow to remain solvent and grow in line with increased demand.Too many big companies have imposed unfair payment terms

84、on suppliers grateful for the business,or they have taken many months to pay,which can result in bankruptcy for their smaller suppliers.Another essential step is building transparency into the supply chain and digitalisation can play an integral role.Technology solutions that scan and monitor can so

85、und the alarm if there are transportation difficulties on the horizon,or even identify whether suppliers suppliers are in financial difficulty.What about relationships?Procure-ment and supply management has long been seen as all about statistics and contracts,but strong relation-ships with suppliers

86、 can get you out of trouble if your company needs extra support in difficult times.Businesses can even collaborate with their rivals to produce industry-wide solutions.Joint ventures in research and devel-opment bring rewards and save costs on finding new markets for instance.General Motors and Toyo

87、ta are work-ing jointly on building vehicles,while Siemens and Philips are cooperating on semiconductor development.Achieving value from a resilient supply chain is about so much more than saving costs,which firms have focused on excessively in recent years.When the lack of a vital component stops p

88、roduction in the factory,it costs money and you can lose custom-ers as a result.That will cost you far more than youd gain through the non-existent cost savings.Through collaboration,ethical sourcing,rela-tionship building and sustainability initiatives,your supply chain can be-come stronger than ev

89、er as the world of trade becomes ever more volatile.Balancing your strategic priorities depends on the business,the goods being sourced and,of course,thesupply marketMalcolm HarrisonGroup CEO,the Chartered Institute of Procurement&SupplyO P I N I O NTBumpy times beckon for Brexit Britains supply cha

90、insFREIGHT COSTS HAVE GONE THROUGH THE ROOFThe Freightos global container freight rate index from July 2019 to January 2022$12k$10k$8k$6k$4k$2k0Jul 2019Jan 2020Jul 2020Jan 2021Jan 2022Jul 2021Freightos,2022F U T U R E O F S U P P LY C H A I N&P R O C U R E M E N T04Chocolates dark secretFor decades,

91、the confectionery industry has facedaccusations of turning a blind eye to the useof childlabour in the cocoa supply chain.NestlsAlexander von Maillot says its time to address the real root of the problem:povertyhocolate,as we all know,is one of lifes guilty pleasures.A nibble here,a cheeky bar there

92、 nothing excessive;just a morsel or two of sugary joy to brighten our days.Yet the delights of chocolate are not universal.In recent years,the multibillion-dollar industry has been rocked by reports of child labour deep within its supply chain.For once,leading players have fully ack-knowledged its e

93、xistence.In 2001,many of the worlds best-known confectionery com-panies jointly committed to eliminating the worst forms of exploit ation.Yet,more than two decades on,the problem persists.A recent authoritative study has estimated that well over 1.5 million minors are still working in the cocoa fiel

94、ds of west Africa,the centre of the worlds supply.Alexander von Maillot,global head of Nestls confectionery and ice cream busi-ness,insists that the industry has not been standing still.He says that action taken by the Swiss food giant has protected almost 150,000 vulnerable children over the past d

95、ecade,but concedes that“it doesnt del-iver on the vision that children get access to agood education and a future”.Nestl,which owns well-known brands including KitKat,Milkybar and Smarties,has decided that the time is right for a change of tack.In the most ambitious move of its kind,the company is e

96、mbarking on a multi-pronged eight-year strategy for end-ing the scourge of child labour.Under the plan,announced in Ivory Coast in January,the business will invest CHF1.35bn(1.1bn)between now and 2030.Not everything will be overhauled.For in-stance,measures to monitor smallholdings will continue unc

97、hanged,as will remedia-tion policies when the use of child labour is detected.But,as von Maillot argues,such steps deal with the symptoms of the prob-lem rather than the reasons behind it.“To tackle this holistically,we looked for the root causes of child labour,”he says.“We found that the biggest o

98、f these is wide-spread rural poverty.”The logic is straightforward:cocoa farm-ers earn too little,which means that they cannot employ paid workers.This in turn leads them to pull their children out of school(assuming that there is one)and oblige them to help out on the farm.“It isnt that Ivorian or

99、Ghanaian parents are bad parents,”von Maillot says.“If you cannot afford paid labour,unfortunately your family might have to help.”The solution seems no less straightfor-ward:why not just pay farmers more?While higher gate prices seem a simple solution,he explains that the reality is more com-plex.H

100、iking the price could lead to over-supply,causing a deflationary effect.Also,cocoa bean buyers in west Africa do not typically buy direct,purchasing instead through wholesale markets where prices are controlled by the state.And what of premiums?Its true that a living-income differential of about 315

101、 per tonne was introduced in both Ivory Coast and Ghana.Yet critics argue that the price is still too low and,in any case,some buyers seek to avoid paying the top-up(Nestl insists that it pays this in full).Chocolate brands also pay farmers extra if they are certified as sustainable(by the Rainfores

102、t Alliance in Nestls case).Yet von Maillot accepts that the benefit here goes mostly to large,well-organised farms,with smaller suppliers missing out.In an attempt to leave no one behind,the company is proposing to make direct cash transfers to individual farmers of up to CHF500.This novel approach

103、is designed to ensure that cocoa-growing households are remunerated for completing any one of a series of prescribed activities designed to increase their incomes.On the list are the implementation of good agricultural prac-tices(such as pruning);the promotion of agroforestry;and steps to diversify(

104、by planting other crops or raising livestock,Oliver Balch To tackle this holistically,we looked for the root causes of child labour The main root cause of child labour is widespread rural povertyCHILD LABOUR AROUND THE WORLDDistribution of children in child labour in 2020,by age and regionI N T E R

105、V I E WCfor example).As a direct nod to reducing child labour,the list includes a commit-ment by parents to enrol any child aged between six and 16 in school.“Theres an extra CHF100 if a farming family applies changes to all four areas,so that makes up the CHF500,”explains von Maillot,who says that

106、half of the money will be paid to the farmer and half to the matriarch of the family.The scheme,which follows a successful pilot involving 1,000 farmers,will cover 10,000 cocoa-producing households in Ivory Coast initially before expanding into Ghana in 2024.Will the initiative succeed?Von Maillot d

107、oesnt underestimate the“super-complex”nature of underage working.Nor is he will-ing to give a definitive date on when,or if,Nestls cocoa supply chain might be said to be free of child labour.Where he does express confidence is in the connection be-tween better farming practices and higher household

108、incomes.He points to Nestls past efforts to train farmers in efficient agricultural methods.On average,parti-cipating producers have seen their yields increase from about 325kg per hectare a decade ago to about 600kg today.For all its good intent,Nestls theory that higher incomes will translate to l

109、ess child labour remains just that:a theory.Success is just as likely to hinge on shifting cultural attitudes as it will on boosting farmers productivity and thereby their profits.Here,Nestls focus on paying farmers to change their habits,rather than on better harvests,makes sense in the long term.M

110、uch will also depend on whether other key players follow its lead.The govern-ments of Ivory Coast and Ghana are both“fully aligned”,according to von Maillot.As for other cocoa buyers,Nestl is pledg-ing to be transparent with any insights arising from its new approach.While its initiative has been br

111、oadly wel-comed,the companys critics are reserving judgement.After such a long wait and many false dawns,such caution is under-standable.They are not the only ones who are anxious to see how things pan out.By his own admission,von Maillot didnt sleep so well once he realised the“enormous amount of m

112、oney”the scheme would cost.By the same token,he says that there is noturning back.Child labour is“absolutely not acceptable”.As for the need to fix it once and for all:“We have no choice.”International Labour Organization,Unicef,20215-11 years12-14 years15-17 yearsNestl60%24%16%54%20%26%54%24%22%51%

113、20%29%51%19%30%38%24%38%Sub-Saharan AfricaEast and south-east AsiaNorthern and western AsiaEurope and North AmericaCentral and southern AsiaLatin America and the CaribbeanCommercial featureof sustainability globally and across indus-tries,organisations can have the opportu-nity to perform better on

114、all metrics.“One of the assumptions of competitive economic markets is the free flow of infor-mation;choosing between two suppliers with full information about them and their products,”says Tamblin.“But as organi-sations traditionally have not actually had full information about suppliers,when under

115、 cost pressure theyve chosen the one cheapest option.If all of a sudden they do have the full information and find the cheaper supplier is socially irresponsible,they will think differently.“Without that information,its very hard to make the right decision,either finan-cially or in light of ESG metr

116、ics.We provide that information,enabling purchasers to make transparent decisions.”The need for transparency will increase further amidst new regulations in Europe and the US requiring organisations to carry out due diligence in their entire supply chain.Considering many companies still dont even kn

117、ow whos in their supply chain,and therefore are unable to know if there are,for instance,human rights infringements among their suppliers,soon they will be facing regulatory fines while failing to meet the ESG expectations of their clients and investors.“Its about raising standards,”Tamblin adds.“At

118、 Achilles,we can map out their supply chains with them.We do that through applied data technology and highly accurate processes,supported by our 30 years of experience in working with supply chains.The future of supply chains is being able to identify that transparency across all tiers,which then in

119、sulates you from the shock of ending up on the front page due to a tier-four supplier you had no idea you even bought from.”For more information,visit Truly sustainable supply chains go beyond ESGAchieving sustainability in the supply chain is not just about ticking environmental,social and governan

120、ce boxes.Financial sustainability is intrinsically linked and key to raising standardshe procurement mindset within businesses has shifted signifi-cantly over the last decade.For a long time the agenda was dominated by cost savings,as organisations looked to their supply chain for the efficiencies r

121、equired to lift their bottom line.But this mindset was increasingly at odds with the growing sustainability agenda,inadvert-ently incentivising irresponsible practices.Initially an investor-led movement,the rapid ascent of ESG goals has also been driven by a realisation that sustainable companies ar

122、e able to command a higher price for their products.While some first sought to expedite ESG progress by sub-contracting the less-sustainable parts of their business,supply chains have increas-ingly fallen under the spotlight,fuelling a growing need to demonstrate not only that your own business is s

123、ustainable,but your supply base too.“Opaque supply chains,far removed from your core business,can see your brand implicated in the bad practices of upstream or sub-tier suppliers you know little about,”says Katie Tamblin,chief product officer at Achilles,a leader in supply chain risk and performance

124、 man-agement.“If something is in the papers about modern slavery or human traffick-ing associated with a supplier,it doesnt matter if youre three tiers down the supply chain,youll be held responsible.”ESG is still a nascent concept and many companies are struggling to meet their ambitious objectives

125、,typically because they exclude financial sustainability from their interpretation of a sustainable supply chain.This is a common omission,despite ESG and financial sustainability being closely linked.Truly sustainable supply chains go beyond a basic understanding of ESG.A supplier that will be bank

126、rupt next week is clearly not a sustainable sup-plier,regardless of their environmen-tal and social commitments,and poverty remains one of the biggest killers globally.The considerable overlap is also evident in the current cost-of-living crisis,which was largely caused by supply chain disrup-tions

127、through the Covid pandemic.Unless a supply chain is financially robust and operationally resilient,it will often cause social issues of its own doing.A resilient supply chain is one which is able to turn to alternative sources of supply during spikes in demand.Yet the well-pub-licised global shortag

128、e and subsequent price hikes of lithium,which is relied on by governments and the automotive sector to electrify vehicle fleets,has clearly demon-strated how a supply chain lacking financial sustainability can infringe on ESG objectives.“From an economic policy point of view,its a classic case where

129、 the environmen-tal benefits of electrifying the vehicle fleet are considered in policy making by,for instance,subsidising investments in green energy,”says Tamblin.“However,govern-ment intervention can only go so far.It underlines the importance of a holistic view across the supply chain,with viabl

130、e alternative sources of supply.“If you cant be profitable and pay a living wage,youre not a sustainable business and youre not aligning to ESG goals.You have to be tracking financial metrics and social metrics at the same time.It has to be a bal-ance because if you cant be economically viable and s

131、ustainable,youre not going to be around very long as a business.Thats why we include financial in our sustainability definition,alongside health and safety,envi-ronmental,social and governance factors.”Achilles collects,validates,monitors and analyses supplier data to help reduce cost and risk in th

132、e supply chain and increase sustainability.Using smart,data-driven insights,Achilles helps businesses create truly sustainable supply chains,connect-ing suppliers with leading buyer organisa-tions globally to create efficient networks of highly qualified businesses.Through a combination of online da

133、ta col-lection,validation from its team of experts,desktop assessment and on-site audits,Achilles provides holistic assessments of suppliers.By assessing and scoring sup-pliers on their sustainability across all five pillars,as well as each one individually,pur-chases can make their decisions with m

134、ore knowledge as well as transparency.Beyond its assessment scores,Achilles also works with suppliers to improve,such as through corrective action plans,partner-ing with sustainability schools to increase knowledge,and running consultancy and training seminars.By raising the standards TAchilles,2021

135、EVOLVING ESG PRIORITIESPercentage of companies that list the following as their top areas of ESG focuse over the next 12 to 18 monthsHAVING A SOCIAL CONSCIENCEPercentage of companies that say the following are the biggest reasons why they implement ESG initiatives in their organisation One of the as

136、sumptions of competitive economic markets is the free flow of information;choosing between two suppliers with full information about themGovernment legislation15.1%Reputational risk12.2%Directive from the board9.9%Pressure from customers11.3%2.5%Social conscience21.6%Cost Savings10.9%Product and ser

137、vice innovation16.4%13.3%Climate change5.8%Labour practice/modern slavery6.1%Human rights12.6%Equality,diversity and inclusion13.1%Community and customers13.1%Management systems and governance18.3%Waste management8.2%Water usage and management5.7%Local contentTHE DISCONNECT IN CARBON-REDUCTION STRAT

138、EGIESPercentage of companiesrate carbon reduction strategies as important to their business strategy77%do not have a carbon-reduction strategy in place52%52%of companies do not have a sustainable procurement strategy in place3.4%TaxationPressure from employeesR A C O N T E U R.N E T05Invest in effic

139、iency improvements rriving back in the office after the Christmas break,Rachel Watkyn opened an email from one of hercompanys suppliers announcing that it was increasing its prices by 40%with immediate effect.Her business,the Tiny Box Company,supplies cardboard boxes to businesses and consumers.The

140、cost of its raw materi-als has increased by 80%in 18 months.“Supply costs used to account for 10%of our product costs,but that has risen to 40%,”Watkyn reports.“We cant pass all of that increase on to our customers.”Her companys problem is typical of that facing many UK firms.Over the past two years

141、,supply chains have been rocked by the pandemic,poor weather,labour short-ages,energy crises and a huge mismatch between supply and demand,according to Simon Geale,executive vice-president at supply chain consultancy Proxima.“We are in an inflationary market,”he notes.“As a business owner,you cant p

142、ut Commercial featureOrganised data powers disruption-resistant supply chainsRapid,intelligent insights are the key to end-to-end supply chain visibility,shielding companies from a fast-changing risk landscape.But vast disparities in data sources present a major barrierglobal supply chain crisis has

143、 rocked the business world.The hangover from Covid-19 which saw vast supply disruptions due to govern-ment-mandated lockdowns continues,exacerbated by geopolitical trade wars and the most significant conflict in Europe since World War II.Disruption from the pandemic stemmed not only from supply shut

144、downs,but also significant shifts in consumer spend-ing patterns.Years of ecommerce growth occurred in just a few months,and over-all the pandemic has contributed an addi-tional$218.5bn to the bottom line of US ecommerce in the past two years,accord-ing to research by Digital Commerce 360.Supply cha

145、in congestion is another issue,fuelled by slow circulation of cargo,all of which is compounded by a lack of end-to-end visibility from production to shipping to consumption.If supply chains are not sufficiently robust,organisations will strug-gle to meet consumer demand and extra costs are passed on

146、to customers,evident in the current escalating rates of inflation.Supply chain resilience is multifaceted,ranging from robust sourcing plans to mul-ti-tiered contracts with logistics providers and thorough ESG monitoring.The common thread is data and technology,both of which have proliferated beyond

147、 measure in recent years.But it can be extremely chal-lenging for any organisation to map dispa-rate data,separating signal from noise.“The range of risks facing supply chains are in a constant state of evolution,meaning companies require strong,fluid intelligence to achieve readiness and resilience

148、,”says Tim McLaughlin,vice-president of trade analytics and industry solutions at data and analytics company S&P Global Market Intelligence.“Robust,strategic planning enables stream-lined tactical execution when theres a shock to supply chains.“Without effective planning,facilitated through data-dri

149、ven decision making,supply chain disruptions will be more pro-longed and intense,inflicting greater costs on the business.But because data tends to be very disparate,it can be difficult to use and manage.As companies look to re-engineer their supply chains,or in some cases completely rebuild them,th

150、ey cant rely on decisions made by gut instinct,but equally they cant rely on unclean,inaccu-rate data.”S&P Global,which recently merged with IHS Markit to form a data and information powerhouse,supports organisations with the high-quality data,flexible technology and in-depth expertise required to a

151、chieve real end-to-end supply chain visibility and respond to an ever-evolving risk landscape.The companys market intelligence divi-sion utilises sophisticated data and analyt-ics tools to help companies diversify their supply chain or monitor the events which can impact their existing supply chain.

152、Strategic planning teams are powered with in-depth intelligence on the markets they can source from and the level of risk and available vendors within each of those markets,as well as insights into the supply chains of their competitors.S&P Global Market Intelligence also lev-erages live vessel trac

153、king,shipping data and port congestion to provide real-time insights into the physical flow of goods so that procurement teams can make sound tactical decisions when rerouting cargo.Its technology can help with data manage-ment and mastering,and all of its data is available via a central data lake w

154、ith stand-ardised API access.“Our intelligence enables companies to make smarter supply chain decisions,”says McLaughlin.“If youre trying to get a com-prehensive picture,you not only need to source from multiple sources,which may be cost prohibitive,but you need to consol-idate those sources,use the

155、m in conjunction with one another and weigh them to make an informed business decision.“Weve done all of the consolidation,indexing and standardising,and we deliver the insights directly to our customers.If a client has minimal insight and transparency on their supply chain,we provide clarity.If a s

156、hipper is too dependent on a particular location for sourcing,we help them diver-sify.If a company wants to monitor com-petitors or track events that could impact production,we do that for them.This is how data will power robust supply chains in the future.”For more information,visit Without effecti

157、ve planning,facilitated through data-driven decision making,supply chain disruptions will be more prolonged and intenseAFive strategies for managing supplier price increasesIn an inflationary market where constant disruption has become the norm,businesses need to wield all thetools at their disposal

158、 to keep costs under controlSally WhittleC O S T C O N T R O LMany suppliers are at capacity,so theyre looking for simple orders that they can execute quickly,according to Geale.“If you can reduce range or increase vol-ume,youll be a more attractive customer and may be able to negotiate,”he says.A b

159、usiness should also think about what else it could offer that would make it more attractive.Geale suggests asking suppliers if you can serve as a case study or introduce them to other potential customers.“Its about finding what makes you valu-able on top of the value of your order,”he says.“If nothi

160、ng else,consider whether you can afford to offer more favourable pay-ment terms,because everyone is feeling the pressure on working capital.”Just because a supplier intends to hike its prices,it doesnt mean that you cant negotiate to minimise that increase.Surrey firm Silent Pool Distillers buys tin

161、 strips in bulk to seal the bottles of gin it produces.When the price of tin shot up by 400%,the companys supplier duly announced that it would be increasing its prices.The distillery responded by opening neg o tiations,recalls Ian McCulloch,its founder and managing director.He asked the supplier to

162、 break down the cost of its seals to understand how much of the pro-ducts price was based on the cost of tin.Itturned out that“half was tin,while half was things such as printing,labour,over-heads and profit”,McCulloch says.“So we offered to pay the higher price on 50%of the cost if the other 50%sta

163、yed the same.”Negotiate with your suppliers on pricing This meant that the supplier was able to maintain its product margin while Silent Pool Distillers was able to keep a lid on the price increase.“We have an agreement that we will bear the cost of the raw material increase,so oursupplier is on a f

164、ixed profit per unit,”McCulloch says.“If it was making 5p per unit before,its still making 5p per unit.”Perhaps the most important thing that any business leader can do in an inflationary environment is conduct a rigorous review of their firms costs and revenues.“This is about understanding every co

165、m-ponent of every cost,”Geale says.“What is the challenge youre facing in each area of your business?How might you do things more efficiently?”The Tiny Box Company needed to im-prove its efficiency to absorb rising supply chain costs but it didnt want to increase itsexpenditure on labour,which remai

166、ns the companys biggest outlay.Instead,it hasinvested in a number of new IT sys-tems,including a customer relationship management platform,barcode readers and software for automated picking sys-tems in warehouses.“It means we can be more efficient in areas such as packing,shipping and cus-tomer serv

167、ice and,ultimately,sell more products at a greater economy of scale,”Watkyn says.“We generally work to a ratio of 100,000 turnover for every employee.If we can push that to 110,000 by using technology,well see huge benefits as a business within a year or two.”Last year,the Tiny Box Companys bestsell

168、-ing product was a luxury white magnetic box.This year,its most popular item is a basic brown flat-pack box.“Our customers are reducing the quality of packaging they buy to make savings,so we need to mirror that,”Watkyn says.your head in the sand.You need to do something different.”Many firms cant s

169、imply respond to each cost increase with an equal price increase.Watkyn tried adjusting her prices last year.“We made small increases and saw that our turnover stayed the same,indi-cating that weve reached the top limit of what our market will accept,”she says.Here are five ways to mitigate supply c

170、hain cost inflation without inc reasing your prices and deterring customers.The company has altered the material it uses to produce its coloured cardboard packaging,switching from dyed board to printed board.“Rather than the board being white all the way through,its now printed white on the edges.Ma

171、king that change has allowed us to absorb the 80%increase in cardboard costs,”she explains.Another change has been to switch the way in which one of the firms most popular Re-engineer your product line products is structured.By modifying how the box opens and closes,the business was able to slightly

172、 reduce the amount and shape of cardboard needed.“That has enabled us to get 11 boxes out of each sheet of board,rather than 10,”Watkyn says.“This means that weve had to pay for new tooling up front,but in the long run its more cost-effective.”Lastly,the company has changed some of its products alto

173、gether.“The most popular jewellery box we sell is a black one for ear-rings,but its impossible for us to find them for a decent price at the moment,”she says.“We know that theres a global shortage,so we buy whats available and work with our customers to find compromises.Its about saying:We dont have

174、 black boxes,but we do have grey or brown.”This sort of trade-off could be accepted by customers more readily than you might think,Geale suggests.“You arent operating in a vacuum.Peo-ple will accept some changes because they do understand the situation that were all in,”he argues.Companies could con

175、sider switching things like colours or materials,or look at alternative packing options,he adds.“If a large part of your costs relates to packag-ing,could you look at reduced packaging,recycled packaging or even local pick-up services that dont require packaging?”When youre sitting in the middle of

176、a fire,its easy to forget that not everyone is sitting in the same fire.Silent Pool Distillers has had to cope with one price increase after another over the past 18 months.The Russian inva-sion of Ukraine has sent the cost of neutral alcohol sky high,while lab els that are print-ed in the region ca

177、nt leave port,McCulloch reports.To keep its turnover steady,the company has had to adjust its marketing strategy,spe-cifically by identifying territories where enough people have sufficient disposable in-come to spend on premium gin.“In the UK,families are spending thou-sands to heat their homes and

178、 are paying more tax on top of that.The escape valve isthat,if you can grow the business more quickly elsewhere and push the top line,you can get to the same profit.Were pushing hard to grow,to try to soften the impact of the increases,”McCulloch says.The firm has recently started exporting to Brazi

179、l,where gin is experiencing a boom.“Brazilians love gin because it doesnt make you fat like beer does,”he says.“Theyre so body conscious that sales there Explore new markets have gone berserk.And where Brazil goes the rest of the continent tends to follow.”The distillery has also been marketing prod

180、ucts in Peru,Mexico and India.Next on McCullochs list is a small-scale launch in China and,potentially,Taiwan.These re-gions were always part of the companys strategy,but all the problems affecting supply chains have prompted it to execute them more quickly.“Weve had to pull things forward to keep a

181、float and do them as well as we can,given the circumstances.We must remember there are many countries that arent under the same pressures as we are,”he says.In recent years,the Tiny Box Company has sourced much of its cardboard from China and the US,but the combined impact of rising material prices

182、and increasingly costly shipping containers prompted the firm to consider other options.For several years,the company had owned a disused production site in Corn-wall.In 2021,it revived this facility and relocated 20%of its manufacturing from overseas to the UK.By doubling the output of its Cornish

183、plant since then,the company has man-aged to offset the increased price of sour-cing materials abroad.But the rising cost of energy,labour and materials in the UK since the start of this year has eroded some of the cost savings achieved in production,according to Watkyn.“Those costs have risen by 80

184、%in 18 months,but we have at least reduced our logistics and shipping costs,”she says.Move your production onshore or nearshore 14253F U T U R E O F S U P P LY C H A I N&P R O C U R E M E N T06Repatriation gamesSpiralling transport costs have prompted procurement chiefs to backtrack on their offshor

185、ing policies.But,while it promises several benefits,finding affordable suppliersnearer to home is no easy taskhe widespread move to reverse offshoring as a consequence of Covid-related disruptions to glo-bal supply chains is testing the skills of many procurement professionals to their limits and be

186、yond.Yet,if they can manage the onshoring process successfully,they have a golden opportunity to make their chains more sustainable and resilient.In the decades preceding the Covid crisis,western retail brands had routinely out-sourced elements of production to suppliers in lower-cost economies arou

187、nd the world.But research by McKinsey in late 2021 found that,with pandemic-related problems continuing to disrupt global supply chains,90%of them were planning to pull at least some of these processes back closer to where the resulting goods were being sold.The chief cause of this trend is clear:fr

188、eight costs are more than four times higher than they were before Covid and analysts expect them to remain elevated for some time yet.Onshoring can reduce the costs of transporting the items in ques-tion while also drastically reducing their carbon footprints.Malcolm Harrison,group CEO of the Charte

189、red Institute of Procurement&Supply,believes that onshoring can offer even more benefits.“People tend to think that this is all about transit costs,which are important.But on-shoring probably wont give you the lowest overall cost,because it will often entail a large investment to shift your producti

190、on base,plus higher labour costs,”he says.“Instead,a balance that involves more localised production gives the best value by adding proximity and local skills,which increase flexibility.If your supplier is closer to where you sell your products,you can respond much more quickly to changes in your ma

191、rkets.”French multinational Schneider Electric has shortened its supply chain as part of itssustainability strategy.The change has entailed localising production in a multi-hub system covering Europe,the US,China and India.Each hub is responsible for its research and development operations,product s

192、pecifications and suppliers.The result is that about two-thirds of the prod-ucts that the company sells in India are designed in India and 90%of them are manufactured there.“You cant have a small carbon footprint with a long supply chain,”says Schneider Electrics chief procurement officer,Dan Bartel

193、.“Climate change is an existential crisis.Most of the damage comes from supply chains,so supply chain leaders have a responsibility to act.”Its a common misconception that large companies such as Schneider Electric can lose economies of scale by making a global to local shift,according to Bartel.But

194、,while economies of scale can be important in some markets,“economies of skill”are more valuable,he says,as localised supply chains can contribute to a central pool of ideas and best practices.Adopting a localised supply model isnt feasible for everyone,of course.Take semi-conductor chips,for instan

195、ce.These vital computer components,most of which are made in Asia,are too difficult for most western firms to onshore.The pressure on supplies,resulting largely from the trade war between Washington and Beijing,has become so severe that US chip giant Intel is planning to spend up to$100bn on buildin

196、g what could become the worlds largest chip plant in Ohio,but few other companies could match that level of investment.Josh Brazil,vice-president,supply chain insights,at the project44 consultancy,believes that only a small number of indus-tries can make a compelling economic case for onshoring to h

197、igher-wage territories.The manufacture of many goods is already highly automated and relies on low-cost labour,he argues.Onshoring per se isnt necessarily the most effective way to mitigate risk,either.While it will reduce a firms exposure to supply shocks overseas,the business could be left without

198、 alternative suppliers if serious disruption should strike at home.With these factors in mind,procurement chiefs would be well advised to strike a its supply of medicines by mitigating prob-lems such as unexpected border closures.Despite this,the strategy has its limita-tions in this sector.Nastik e

199、xplains:“Near-shoring is impossible for some products,because customers stipulate the use of one supplier for intellectual property reasons.And,for some materials,only one supplier can meet the required quality specifica-tions.Some government policies also dis-criminate against foreign-made products

200、.”Another disadvantage of onshoring is that it can divert resources from offshore suppliers you may still need,threatening their survival,he adds.For all these reasons,Novartis will continue balancing offshoring,nearshoring and onshoring to diversify its supply chain.Harrison contends that not enoug

201、h pro-curement professionals are sufficiently skilled to perform such a task effectively.“Before the pandemic,were accustomed to stable supply and demand,”he says.“Now we need more flexible supply chains to manage greater demand variability and more people with the skills to judge how to structure a

202、 resilient supply chain.They need to work out how many suppliers to use,which of them should be onshore and how long the commitment to these should be.Setting up production is usually more intensive than operating an estab-lished site.It often involves a long-term in-vestment decision,but what will

203、happen in five years?You must therefore build in agil-ity,which requires strong skills in areas such as scenario planning.”This may entail moving to a bigger supply base featuring a mix of onshore,nearshore and offshore sites.So procurement chiefs may need extra resources and the skills to manage a

204、more complex structure too.But,as Bartel says:“Sure,redesigning your supply chain can be difficult,but its worth doing for the long-term benefits.While the current situation wont last for-ever,suppliers will continue to face crises.Supply leaders therefore need to design their chains to be more agil

205、e and resilient.”Despite the benefits,onshoring presents so many tough challenges that the process could be likened to turning around an oil tanker.Indeed,it might actually involve turning around a tanker.The question is:does your procurement team have the ability to do it quickly enough?balance,Bar

206、tel notes.Schneider Electric,for instance,maintains global standards for quality to ensure that,if supplies are disrupted in one place,the firm has enough flexibility to use other sources with confi-dence that theyll follow its specifications.Swiss pharma giant Novartis serves 155 nations from 50-pl

207、us production sites.Amit Nastik is its global head of strategy,operations and local markets manufactur-ing.He says that onshoring and nearshor-ing(relocating production to a territory near the home market)have been vital for his firm.They have ensured continuity in Tim Cooper Climate change is an ex

208、istential crisis.Most of the damage comes from supply chains,so supply chain leaders have a responsibility to actCommercial featureCommercial featureCrafting a more transparent supply chainTo tackle disruption and improve profitability,supply chain management tools are offering manufacturers and dis

209、tributors a chance to improve visibility over the supply chains businesses respond to the dis-ruption of the past two years,information sharing will be key to generating long-term relationships between manufacturers and distributors based on transparency and trust.For manufacturers and distributors,

210、transparency is essential,particularly in the event of major supply chain dis-ruptions caused by events such as the Suez Canal blockage and Covid-19 pan-demic.“You need to know why theres been this disruption and be able to communicate that with your custom-ers,”says Andy Reid,the head of inter-nati

211、onal product marketing and global competitive intelligence at cloud-based ERP provider Epicor.Customers are also demanding more visibility about where products are sourced from.That means manufac-turers and distributors need to know exactly where and how products are being made,particularly if their

212、 supply chains are complex and multinational.If companies dont do this,they could lose out.“Competition is really hot in this area,”says Reid.“If you cant supply a product or give your customers enough information about how its made,some-one else will.”But supply chain transparency can be easily imp

213、roved with the support of cloud-based software.Epicors supply chain management software can track even the smallest of individual prod-uct parts back to source.Reid says:“If youre a hardware distributor thats also doing some assembly as a value-added service,you need to be able to track where the in

214、dividual parts have come from,so if one keeps failing you can go back to the supplier,resolve the issue and maintain quality.Our systems can capture serial numbers and informa-tion about individual product parts and store them securely.”But tracking the performance of suppliers,maintaining communica

215、tion and keeping costs down can be a major challenge as you grow your business.“Distributors operate in a highly compet-itive environment,”says Reid.“They tend to be high volume,low margin businesses and are always looking for ways to keep costs down,increase margins and profit-ability.To do that,yo

216、u need to prioritise information management.”For companies that approach supply chain management with the right stable of tools,they can minimise inventory risks and costs while conforming to industry standards.Visibility into cost-ing,tracking,country of origin and managing the flow of raw material

217、s is essential to achieving transparency throughout the supply chain.Epicors cloud-based software supports this,while helping to reduce annual audit costs with regular inventory counting,enabling profitability at scale.Improving communication with sup-pliers is also key.Epicor does this through its

218、supplier portal,which ena-bles customers and business partners to interact online using a self-service tool.It provides either an integration solu-tion(for suppliers who can connect to companies)or a web portal(for suppli-ers who cant)through which businesses and their suppliers can communicate.It e

219、nables documents to be viewed,status information about sourcing requests shared and graphical charts with insights into EDI data provided.These web-based analytics present supply chain activity and alert manufactur-ers to unexpected or non-compliant supplier actions.It allows for real-time visibilit

220、y into orders,carriers and ware-houses so teams can respond to supply chain breaks immediately.Andy Coussins,SVP and head of inter-national at Epicor says:“There is a tre-mendous opportunity at hand for man-ufacturers and distributors.This will only be realised by using emerging informa-tional techn

221、ologies like mobile,ana-lytics,and cloud alongside operational technologies like sensors,machine-to-machine communication,and robotics.Tomorrows manufacturers and distrib-utors need to be leaders when it comes to adopting technology.Those who want to run the supply chain of the future will need to s

222、hed the old mindset of wait-ing for a new technology to become the norm before embracing it.”Supply chain transparency means knowing exactly what is happening at every stage of the supply chain,enabling swift communication with stakeholders based on reliable data.It enables com-panies to minimise de

223、livery disruption,identify operational improvements,uphold standards and boost trust with suppliers and customers.Partner with Epicor today to build a transparent,resilient and profitable supply A Those who want to run the supply chain of the future will need to shed the old mindset of waiting for a

224、 new technology to become the norm before embracing itR E S H O R I N GT A balance that involves more localised production gives the best valueDO CONSUMERS PREFER DOMESTICALLY PRODUCED FARE?Global preferences for local food and drink brands,by categoryNielsenIQ,202054%32%31%30%30%Dairy productsIce c

225、reamBottled waterCerealsBiscuits/crisps/snacks zorazhuang via iStockPrint media cant generate leads.Wrong.Wrong.Some of the advertisers in this report will generate over 200 leads thanks to Raconteurs integrated print and digital campaigns.Email to find out more.R A C O N T E U R.N E T07 Chinas econ

226、omy is continuing to grow,but lockdowns are still being applied,with some people viewing its zero-Covid policy as too aggressiveChinese puzzle:time for western firms to diversify their risks?eijings zero-Covid policy has been creating serious problems for global supply chains and trade ever since Ch

227、inas first lockdowns in 2020.The nations efforts to contain infection have been among the most stringent in the world.It did not take long for their effects to be felt beyond its borders.The ensuing pandemic-induced obstruction to global trade brought into sharp relief the rest of the worlds heavy r

228、eliance on Chinese raw materials,components and products.After two difficult years for logistics and trade,President Xi Jinping announced in mid-March that the government would be continuing with its“dynamic zero”policy in response to the latest outbreak of Covids omicron variant.The policy includes

229、 wide-spread PCR testing in the worst-affected regions,state-built quarantine facilities for anyone who tests positive and targeted local lockdowns.This time,the north-eastern industrial province of Jilin has been most heavily affected,while a significant number of Covid cases have been reported in

230、pro-vinces along Chinas east coast and further inland.Researchers at Lanzhou University have told the media they are confident that this latest outbreak will be under control well before the end of spring.Arnold Ma,founder and CEO of Qumin,adigital agency that connects China and Europe,warns that th

231、ese outbreaks sug-gest that“the countrys battle against the virus is far from the end”.But what do these latest pockets of Covid mean for global trade?Have there been improvements in how business with China is being done?And have lessons been learnt about our overreliance on China?There are“definite

232、 signs that China is emerging from the pandemic,particularly because of the countrys successful vac-cination programme”.So says Laurence Dellicott,dir ector of fulfilment sales and supplier management in EMEA for logis-tics technology firm Avnet Silica.“Its economy is continuing to grow,but lockdown

233、s are still being app lied,with some people viewing its zero-Covid policy as too aggressive,”he adds.Dellicott notes that the Chinese supply chain problems are not only Covid-related:“Trade disputes between the US and China were happening long before the most recent variants started spreading.Gener-

234、ally,costs have continued to rise across the board,with many manufacturers strug-gling to keep up with the scale of demand in China and elsewhere.”Kevin Gaskell,business growth expert and author of Inspired Leadership:how you can achieve extraordinary results in business,observes that Chinas logisti

235、cs “simply froze”at the start of the pandemic because trucks,aircraft,ships and con-tainers were either locked down or una-vailable in the right place at the right time.“Modern inventory management works on the basis of efficient supply chains minimising their required stock holding,”he says.“When s

236、upply lines were disrup-ted,buffer stocks were consumed quickly.Owing to the manufacturing lockdown,replenishment was difficult,if not impos-sible,for an extended period.”Dellicott says that businesses are“seri-ously reviewing putting all of their eggs in The pandemic has exposed the worlds overreli

237、ance on China as a manufacturing base.Learning from this bruising experience will prepare businesses better for future challengesone basket and spreading their manu-facturing more than they usually would,in case of another international crisis.”Many businesses are considering alter-natives to treati

238、ng China as a one-stop manufacturing shop,with reports of a deltacron Covid variant potentially accel-erating such decisions,he reports.For manufacturers,the pandemic has highlighted the importance of either having manufacturing hubs outside China or maintaining a presence in China while planning wi

239、th neighbouring nations.“Some companies have been playing on the so-called China plus one strategy,which means that they have expanded their operations to surrounding countries,such as Vietnam and India,as a way to reduce their reliance on China as a produc-tion base,”Ma says.“This enables compa-nie

240、s to maintain a presence in China so that they wont miss out on any opportuni-ties offered by this lucrative market.”The China plus one strategy offers busi-nesses flexibility without abandoning what they have established in China,as he explains:“Operations in neighbouring countries can function as

241、a back-up in a situation such as a pandemic when operat-ing restrictions in those regions might not be as tough as those in China.”In some markets,governments have stepped in to make it easier for businesses to manufacture at or near home.For in-stance,the White House has invested$52bn(38bn)in the s

242、emiconductor sector under the Creating Helpful Incentives to Produce Semiconductors for America Act 2021.Meanwhile,the government of India has approved a$19bn proposal to incentiv-ise global companies to move factories to the country,including manufacturers in the automotive,electronics,pharmaceuti-

243、cal and textiles sectors.In China itself,the economic impact of pandemic-related pressures on manufac-turing and supply chains has improved the sophistication of logistics in the country,according to a recent research report by McKinsey.Advances include the increased adoption of digital tech and use

244、 of air freight in response to shipping delays.Gaskell stresses that the challenges fac-ing manufacturing and logistics have not been specific to China because most inter-actions with international suppliers have been affected by lockdowns.But he adds that many firms in the UK and EU have started re

245、considering the price benefits of sourcing from China.“In my companies,were actively review-ing alternative local suppliers,”he reports.“The transition will not be simple or quick,but alternative sources need to be con-sidered,because the pandemic has high-lighted the existential problem of relying

246、on long-distance supply chains.”The perfect storm of Beijings zero-Covid policy and the Wests reliance on China for cheap manufacturing and smooth supply chains has created two years of serious disruption.But Kayla McEwan,a strategic analyst at customs compliance specialist TecEx,warns that other ri

247、sk factors are at play too.Many of these have contributed tothe problems during the pandemic and are also likely to remain after the Covid crisis ends.She says that,for the UK and EU,Brexit is the first issue that comes to mind because of the“trade barriers and other complexi-ties”that have arisen s

248、ince the UK voted in 2016 to leave the bloc.More broadly,she cites“other adverse factors”,such as labour shortages and panic-buying,as causes of global problems affecting production and logistics.The overriding lesson for western firms goes beyond simply reducing their reliance on China,then.Agile b

249、usinesses will be better equipped to overcome disrup-tions if they adopt strategies that spread their risks and their responsibilities.HOW SHIPPING TIMES FROM CHINA HAVE INCREASEDproject44,2021Georgia Lewis QWhat have you learned from managing your supply chains in the last two years?DDCRecent event

250、s confirmed that we live in a world of change and that crises can come from anywhere.We have the never-ending semicon-ductor problem in the automotive industry,and now there is a war in Ukraine.How we operate has had to change,and we have to work with very low stock levels.Having that agility and fl

251、exibility is critical,as is managing the supplier ecosystem rather than indi-vidual suppliers.ASInfor partners with several lead-ing global brands in the automo-tive industry,and the challenges have been extreme in the last two years.It has become clear to all businesses that cloud computing is key.

252、Infor has bene-fitted from its strategic partnership with AWS in maintaining to deliver mul-timillion dollar projects globally;using remote working and collaboration tools to ensure projects are delivered on time and to budget,despite the travel restrictions and lack of face-to-face meetings which w

253、ould be the norm.The provision of robust,scalable and agile industry specific cloud solutions has enabled Infor to maintain its ser-vice levels in this challenging time for businesses,globally.DRAt Prodrive,we have learned to be more adaptable and flexible and apply our innovative approach to differ

254、-ent uses.For example,we produced a low-cost ventilator during the pandemic in a project with the University of Cambridge.Also,we collaborated again to create rapid-flow coronavirus test kits in just eight months.JRAt JLR,we have learned there needs to be greater transparency across the supply chain

255、 and coverage of our suppliers.To ensure we have the best outcomes,we need to understand whats going on in real time,where essential parts are and where the gaps might be.Our transformation project,which Im leading,focuses on transpar-ency and collaboration.RHWe have put digital at the heart of the

256、supply chain at JLR.Weve created a digital organisation that supports the broader business with data science,automation,ana-lytics and predictive modelling.Of course,there is still more to do,so we can bend and flex the requirements of our customers,but we are being much more responsive.OTBusiness a

257、gility,and greater end-to-end visibility of the supply chain,are enabled by cloud computing.Servers can be spun-up in minutes,it provides scale across continents and has been a game-changer for AWSs customers and partners.There is a big trend of collaboration,too,where orig-inal equipment manufactur

258、ers,logis-tics service providers,and even dealers are sharing data that used to be siloed.QHow are todays supply chain challenges accelerating the pace of change?OTFirst,the pandemic and the geopolitical crisis sparked by Russia have exposed supply chain vul-nerabilities.Automation can help,but we a

259、lso need to make supply chains more sustainable and supportive of circular economies.ASThere is now more collaboration and co-ompetition in the auto-motive industry.Most organisations realise that 80%of the data they need sits outside their existing business,so there is an excellent opportunity to e

260、xpand the ecosystem and choose expert partners who can help gather that data.With the right partners,and by utilising artificial intelligence and machine learning,organisations can move from a reactive to a more proac-tive to,ultimately,a more predictive business model over time.RHThe pace of change

261、 in powering digital transformation requires top-level support,and we are lucky to have a digitally literate CEO.We know the direction of travel,and we know we can get there with that leadership.For instance,in response to the semicon-ductor issue,and thanks to the cloud,we have created tools to rev

262、italise smart business layer solutions.JRCybersecurity is a massive focal point for us.Its front and centre of what were doing in the supply chain digital transformation.JLR needs to take a leading role to ensure we are robust in our cybersecurity require-ments.Likewise,our suppliers must understand

263、 the importance of cyber-security.To echo others,the keyword here is collaboration.DDCThere is a strong request for safe and affordable mobility,and the industry has realised that we need to provide sustainable solutions,so that is a significant challenge we face.Producing electric cars remains expe

264、nsive compared to internal com-bustion engine cars.That has a huge impact on supply chains but reaching carbon neutrality is a must and some-thing we owe to all our communities.DRThank goodness I dont have the supply chain problems that many in the automotive industry have.It is an exciting time,tho

265、ugh,and peoples per-ceptions of,for instance,electric vehi-cles need updating.Prices are coming down while their battery range and per-formance are improving.Motorsport is responsible for many innovations we see on the roads.QTo what extent are automotive organisations technology businesses?OTVehicl

266、es are becoming soft-ware-based products.In some new car models,there are hundreds of millions of lines of code.Digital is clearly the direction of travel.But the main question has to be:how can we provide a superior customer experi-ence?The automotive industry must look to other industries for cues

267、.JRData is so important to inform that superior customer experi-ence,as that is where you will learn about customer behaviour.From a supply chain perspective,having greater visibility and transparency will improve resilience and mapping capa-bilities and show the provenance of the vehicle for the cu

268、stomer.Sharing that knowledge is increasingly crucial for the customer experience.RHClearly a sustainability agenda is paramount.Those who dont follow that will be left behind.Visibility of the supply chain ecosystem is vital.For example,in the future we would want customers of new vehicles to be re

269、assured that they know where their battery has been mined through to where it is assembled.Its tough to map everything out,but technology makes it easier.DDCThe sustainability agenda,which the automotive industry must accelerate,is definitely not straightforward as we operate in a cash-driven indust

270、ry.Sustainability cannot be done without the digitalisa-tion of the supply chain,though.We now have a tremendous and unique opportunity to connect with customers and the supplier ecosystem and improve visibility.DRMost motorsports companies have developed a technology group that works with a range o

271、f manu-facturers.Together they look at likely challenges and opportunities a decade into the future.Some projects we are working on today might not see the light of day for years,or indeed ever,but manufacturers have to hedge their bets by investing in several technolo-gies at the moment.ASMost of I

272、nfors automotive cus-tomers are now building technol-ogy campuses alongside their main production facilities,and innovation is at their core.It is becoming more apparent that the vehicle of the future will be an environmentally friendly,super-smart,connected device,whomever is driving it whether its

273、 a person or a machine.The need for innovation and investment is a con-stant and digital transformation has a clear role in bringing those products to market faster.To find out more,please visit Optimising supply chain resilience in the automotive industryThe direction of travel for the automotive i

274、ndustry is clear.Customers must remain a key part of the supply chain strategy,experts say Digital is clearly the direction of travel.But the main question has to be:how can we provide a superior customer experience?The automotive industry must look to other industries for cuesRoundtable attendeesDa

275、mien de Cacqueray,Vice-president,supply chain new projects,StellantisRichard Harding,InDigital domain director,global purchasing,supply chain and manufacturing,Jaguar Land RoverDavid Richards,Chairman and founder,ProdriveJudith Richardson,Global supply chain director,Jaguar Land RoverAndy Sutton,Vic

276、e-president strategic accounts,InforOzgur Tohumcu,Managing director,automotive(EMEA),AWSDDCASDRJRRHOTOliver PickupR I S K M A N A G E M E N TCommercial featureB20191634NingboQingdaoShanghaiYantian20202021To Europe(days)To North America(days)69631554739 Future Publish

277、ing via Getty ImagesCargo ships work at the Qianwan Container Terminal of Qingdao Port in East Chinas Shandong Province,April 13,2022F U T U R E O F S U P P LY C H A I N&P R O C U R E M E N T08clients are purchasing stock as and when they find it.Theyre dealing with one-off spot markets,rather than

278、signing two-or three-year supply agreements.Also look internally,assess the deals you already have in place with suppliers and work out how they can help,he recommends.Stop thinking about a supply chain as linear and“start thinking about it as an interconnected economy,because there are going to be

279、knock-on effects,”he warns.“Get transparency over your supply chain and the network that supplies it.”Companies should look to technology too.They should consider new systems that can perform smart risk assessments by analys-ing patterns along the supply chain rather than waiting for all the data to

280、 come in.“We have seen a lot of firms risk processes fall away during the pandemic as theyve started trying to make decisions based on best estimates,”Geale says.“Conventional tactics are just not going to apply.”Commodities markets absorb impacts of warlobal supply chains were already reeling from

281、the effects of the pan-demic,but Russias invasion of Ukraine has since added a whole new set of problems,with both the war and trade sanc-tions choking the flow of vital resources.The nation is ranked as the 16th-largest exporter by the World Trade Organization,although it has particular strengths,w

282、ith oil,gas and coal topping the list.But the scale of the global pull-back from Russian businesses has been vast,reports Brandon Daniels,president at supply chain manage-ment business Exiger.His firm has looked at 150 oligarchs and the 2,600 businesses in which they hold mater-ial stakes.It has fou

283、nd more than 200,000 supply links to US firms in the critical infra-structure and defence industrial base an“enormous amount of commerce”,he says.Its hard to reorganise any supply chain,Daniels adds.“But,with pervasive sanc-tions in critical sectors and individuals that own large swathes of global c

284、ompanies,the challenge of finding,analysing and stop-ping those transactions is Herculean.”Kate Tamblin is chief product officer at risk management specialist Achilles and author of the firms supply chain resilience index.Shocks to supply chains are increas-ing in frequency and intensity,she says,ad

285、ding:“Supply chains have not had time to recover and we now face a critical tipping point that could have both supply and cost ramifications rippling through industrial and consumer markets for years to come.”The fertiliser industry is one of the key sectors affected by sanctions.Jo Gilbertson,head

286、of the fertiliser sector at the Agri-cultural Industries Confederation(AIC),says:“What we are seeing across our whole supply chain is a huge amount of uncert-ainty and a lot of risk being carried.”Manufacturing fertilisers is a particularly energy-intensive process.According to the AIC,mainland Euro

287、pe supplies the UK with nearly 60%of its fertilisers.With 46%of the gas used by Continental fertiliser manufac-turers coming down Russian pipes,theres concern that it could be part of a new wave of sanctions.While much of the gas used in the UK comes from the North Sea,“we are part of the European m

288、arket for gas,so our prices are linked to European prices,which would soar if several Russian pipelines were to be turned off”,Gilbertson notes.A tonne of fertiliser cost about 245 a year ago;its now nearer to 815,he adds.“Man-ufacturers have switched off because they know that farmers cant buy at t

289、hat price.”There are indirect impacts too.A lack of fertiliser means less grass and winter silage,leading to a decline in dairy output.Ukraine and Russia together account for about a quarter of the global grain supply.The UK is largely self-sufficient with respect to wheat,but the lack of grain on t

290、he market With suppliers in Ukraineand Russia mostlyout of the picture,critical industries are urgently seeking out alternative optionsis pushing up prices,reports Alex Waugh,director-general of UK Flour Millers.An average flour mill processes about 100,000 tonnes of grain a year.Inflation means tha

291、t it will need to find more than 15m extra this year for its feedstock.“We can get the wheat we need to make flour;its just more expensive,”Waugh says.Much the same is true of maize,with more than a quarter of the UKs imports coming from Ukraine.Most is destined for animal feed,especially in the pig

292、 and poultry sec-tors.If it becomes more scarce,price hikes for pork,chicken and eggs are likely.Other affected commodities include neon(used to make semi conductors)and sun-flower oil from Ukraine;and palladium(used in catalytic converters)from Russia,which accounts for 40%of global supplies.Findin

293、g alternative sources is neither simple nor cheap,Gilbertson stresses.More commodities could be shipped from coun-tries such as Canada,but transporting them takes far longer than importing from one of the Baltic ports,say.Other important products,such as phosphates,could be sourced from north Africa

294、,he says,but their long-term quality is questionable,as is the sociopolitical stability of that region.With Russia out of the equation,“every-one is left scrambling for resources from other countries”,Gilbertson observes.That is not good news for the UK,which has only 1%of the global agricultural ma

295、rket and struggles to compete with agricultural powerhouses such as Argentina and Brazil.Chinas domestic market now uses more than a quarter of the worlds reserves.What can be done?The government has taken some positive steps,such as remov-ing tariffs on US imports including maize,according to Gilbe

296、rtson.Brussels has been more proactive,making 50m(42m)available to help fertiliser manu facturers get back online.More controversially,the EU also looking at dropping regulations re-stricting genetic modification and planting crops on fallow land,which could have a detrimental effect on sustainabili

297、ty initia-tives across the bloc.But businesses can still recover a measure of control,according to Simon Geale,exec-utive vice-president at supply chain consul-tancy Proxima.Firms have moved on from just in time and just in case,he says,add-ing:“Now the mantra is just go and get it.”Geale explains t

298、hat they should approach the market differently,broadening sources of supply.For instance,some of Proximas Mark Hillsdon What we are seeing across our whole supply chain is a huge amount ofuncertaintyS O U R C I N GGCommercial featureB2B procurement embraces the marketplace modelAmid a period of dra

299、stic logistical complexity and accelerated digitalisation,a network-based B2B marketplace model holds the key to more robust,transparent and flexible supply chainsnew generation of business profes-sionals have long been questioning why they can order and receive any item seamlessly in their home lif

300、e,but it can take weeks to get even the most basic items at work.Traditional B2B procurement is inefficient and time-consuming.Companies have seen two mega-trends collide.Digitalisation was transforming B2B buying experiences even before Covid-19,but the pandemic intensified the shift as the physica

301、l economy became a digital one overnight.Meanwhile,lockdown disrup-tions amplified the risk of relying on a single source of supply,with just-in-time supply chains particularly exposed.A network-based marketplace model addresses these issues by facilitating a dynamically connected ecosystem of buyer

302、s and sellers and digitising key pro-cesses to remove the low-value-added tasks in the supply chain.Cloud-based B2B marketplaces accelerate the sourcing of unplanned tactical supplies and empower employees while managing risks.Analysts expect the future of global trade to be driven through marketpla

303、ces,help-ing organisations build resilience through easier access and greater visibility across the supply chain.The need will grow fur-ther given cross-border B2B ecommerce transactions will reach$1.8tn by 2023,some 17%of all B2B sales in the US,accord-ing to Forrester Research.“Companies want to m

304、ove from a pure linear supply chain to a network supply chain with a large baseline of suppliers,”says Julien Lvque-Claudet,head of marketplace strategy and go-to-market at Tradeshift.“You cannot just do that by yourself.You need to tap into a B2B mar-ketplace,delegating the role of finding and vett

305、ing suppliers to a third party which applies the right control and curation.The more connections,the faster you react to the speed of business.”Procurement teams are under pressure to show more strategic value,moving from gatekeepers on spend to revenue genera-tors.B2B marketplaces help them do that

306、 through accelerated sourcing and greater efficiencies.As end-users can buy directly from a curated supplier base,procurement staff are able to shift their focus to more value-added activities.A dynamic marketplace model also eases the pressure on supply chains during peri-ods of volatility by intel

307、ligently match-ing areas of high demand with pockets of capacity.Its easy and cost-effective to build a diverse,pre-vetted supplier base in a controlled environment where smaller suppliers are put on a more level playing field with large vendors.The benefits are clear but not all market-places are c

308、reated equal,with many thinly veiled B2C marketplaces masquerading as B2B but lacking the backend infrastructure to support such transactions at scale with the right level of control and compliance required by small,medium and large enter-prises in a B2B environment.One marketplace solution thats as

309、 robust on the backend as it is intuitive on the frontend is Tradeshift.Its net-work-based B2B marketplace environment allows better transparency and compet-itive offers for buyers while opening up a broader prospecting base to suppliers at a limited customer acquisition cost.Tradeshift allows easy

310、integration of mul-tiple solutions on a single platform.Buyers are free to tap into different marketplaces according to their specific needs with cen-trally managed controls that enable them to set their own rules.“Its a marketplace of marketplaces,”says Lvque-Claudet.“If a buyer is in the auto-moti

311、ve sector,for example,they will bene-fit from group buying on a dedicated mar-ketplace for direct materials and they can also access other marketplaces for indirect spend such as office supplies.Crucially,this can all take place on a single platform.”The end-to-end digital process for man-aging trad

312、e also makes B2B marketplaces a springboard for sellers to access financial products.A rich seam of data underpinning each transaction means that banks and other third-party funders can start to offer financing options,such as early invoice set-tlement,directly through the marketplace.“When physical

313、 and financial supply chains are interlinked,theyre more resilient,effi-cient and flexible,”Lvque-Claudet adds.“Suppliers will sell their products but could also activate a financial product from a finan-cial institution,in one place,ultimately helping to unlock the$2tn global SME funding need.”To f

314、ind out more,please visit TA When physical and financial supply chains are interlinked,theyre more resilient,efficient and flexiblehelping to unlock the$2tn global SME funding needTHE TOP THREE PRODUCERS OF OIL,WHEAT AND SUNFLOWER OILUSSaudi ArabiaRussia01020319%13%12%Share of oil production volume

315、in 2020EU Russia Ukraine01020318%17%12%Share of wheat exports in 2021UkraineRussiaRest of world01020350%28%22%Share of sunflower oil exports in 2021Statista,2022 NurPhoto via Getty ImagesDetail of a rocket missile on the agricultural field near Kyiv area,Ukraine,06 April 2022 Commercial featureComme

316、rcial featureHow data can help reduce friction in the supply chainTime is short and mistakes are costly.Data can help with botht has been a difficult few years for manufacturers,suppliers and businesses that sell prod-ucts worldwide.Recent events high-lighted the weaknesses in supply chains.Raw mate

317、rials are in short supply,push-ing prices higher and making decisions more difficult.Yet customer demand for new products in a timely manner has not adapted to the new circumstances.This means there is little room for error in every decision made in sourcing,sup-plying and manufacturing.For years,th

318、e world ran on a just-in-time manufacturing methodology which worked in a time of plentiful,reli-able supply.“And there werent as many issues impacting the flow of goods,”says Julie Driscoll,executive advisor at aPri-ori.The company automatically gener-ates product manufacturing intelligence that he

319、lps manufacturers collaborate across the product development pro-cess to make better design,sourcing and manufacturing decisions that yield higher-value products in less time.Mistakes cost time and money,meaning companies must feel confi-dent in all product development deci-sions.“Theres a lot of bu

320、yer demand for personalised products with a broader range of features.Companies are trying to innovate faster and move from design to market as quickly as possible,”says Driscoll.aPriori recently surveyed 24 man-ufacturers about the pain points they have been experiencing in sourcing and buying prod

321、ucts.The key finding?“Current sourcing processes have inef-ficiencies due to incomplete informa-tion and manual steps,”says Driscoll.Using data and technology to be more transparent about the product design,price,method of manufacturing and potential manufacturing issues can help businesses collabor

322、ate between teams,reducing the time spent search-ing for information and haggling on the phone or via email.This is vital at a time when trusted manufacturers may be unable to pro-duce at the scale they once did due to staff or material shortages.Businesses are having to find,befriend and broker dea

323、ls with organisations they have not previously worked with,introducing friction into an already strained pro-cess.“Were talking about reducing fric-tion across your entire product devel-opment process,”says Driscoll.“From early design of new parts or new prod-ucts,we can help you speed up the proces

324、s to get you to market quicker.”aPriori was recently used for a deep dive manufacturing and cost analysis for assembly by agriculture and construc-tion equipment company CNH Industrial that evaluated 104 unique part numbers and fine-tuned the manufacturing pro-cess,saving the company$2.1m.aPrioris t

325、echnology helps reduce friction both while products and com-ponents are manufactured and before theyre delivered.More than 70%of a products cost is determined at the design stage,but once set up and in production,reworking products mid-manufacture can cause costly waste.aPrioris software helps ident

326、ify any manufacturability issues early in the process,suggesting how an item can be made,how long it will take to make,how much material its going to use,and what the carbon footprint of the product will be.“Automating the product analysis and making the data easy to access and share are crucial to

327、expediting the pro-cess,”says Driscoll.“Product life cycles are shrinking dramatically,and theres so much more global competition.”That puts pressure not just on the design process,but on the buying pro-cess too.“Previously,the push was that you had to go fast,”says Driscoll.“Now,fast isnt enough.Yo

328、u need to be able to respond,because things might not go exactly as you wanted.”Whether its a shortage of a key component or shift-ing the manufacturing to an alternative at short notice,hurdles exist every-where and having visibility for options can help you to avoid them.“Digital transformation al

329、lows manufacturers to move quickly and to be responsive to disruption,”says Driscoll.“You dont know when the next black-swan event is going to happen.”Of course,the supply chain will not remain stalled forever but the impor-tance of remaining nimble will continue for years to come.“Even if the disru

330、p-tion settles down,efficiency and time to market are going to remain impor-tant,”says Driscoll.“If you have ineffi-ciencies in your process,you are going to be a laggard.”To see how real time data can stream-line your product innovation lifecycle,visit aP or call+44(0)78517 91322I Fast isnt enough.You need to be able to respond,because things might not go exactly as you wanted