The pandemic sharpens focus on the essentials
What are we sick of them…. The pandemic is wearing on the nerves of the population and, above all, on the nerves of those who bear corporate responsibility. A permanent state of emergency. For a year now. There is no clear end in sight. „Fair weather management“ is not currently on the agenda of most industries. However, inactivity, unless forced to do so, is not a given in the companies we know. On the contrary. Since the summer of 2020 at the latest, many entrepreneurs have been using the exceptional situation to reposition themselves. While changes in corporate structures and processes were often put off during the boom phase, they are now being pushed forward with vigor (perhaps out of necessity).
In the survey „Top Trending Topics for Procurement & Supply Chain“ conducted by ADCONIA twice a year, the focus is sharpened on two topics in particular:
- acceleration of digitalization
- sustainability of supply chains
These topics are not really new. What is new, however, is the emphasis we are now observing and experiencing, starting at the C-level and extending into the operational area, with regard to realignment and implementation. These two aspects play a decisive role for competitiveness during and certainly also after the pandemic. At the same time, they are linked like Siamese twins.
At this point, at the latest, end-to-end digitization of procurement and supply chain processes pays off. Regardless of the home office situation, all levels can access the same information, decision-making tools and status reports and take active action. It was exciting to observe how this enabled, for example, active risk management in crisis-ridden supply chains at the structures. This was particularly true where supply processes had already been streamlined in previous years and quarters, supplier management had been optimized, and this had been digitally linked across divisions with the key stages of internal value creation.
Insofar as the processes in the value creation stages are cleanly set up and digitization has been or is being carried out based on this, the question of the sustainability of one’s own supply chain can be asked and addressed in parallel. The commitment to sustainable management alone is no longer sufficient in view of the upcoming Supply Chain Act. After the upcoming German parliamentary elections at the latest, a legal obligation will be implemented in Germany, and at the same time in most of the neighboring European countries, which will specify to companies the form in which their entrepreneurial actions must be ethically, ecologically and legally transparent, even in the cross-border supply chain. And the supply chain does not end with the company’s own supplier, but continues along the entire value chain. The threshold of economic reasonableness for the entrepreneur to design his supply chains sustainably and, above all, to document, prove and monitor/manage this permanently, will in all probability become challenging.
My opinion: Woe betide anyone who approaches this in the same way as many managers did a few years ago with the bureaucratic monster of the EU Data Protection Regulation, which had been known for a long time but was consistently ignored. It will overrun the company. Hectic, time-strapped action will lead to poor and expensive implementation. This is exactly what supplier management can avoid if it is carried out consistently according to these criteria. Fortunately, many managers have recognized this in time, according to their statements in the survey we conducted. And they act or have put it on the agenda of their strategic homework, as we are increasingly noticing in current projects with our customers.
My recommendation: Take a look at our current survey results of the „Top Trending Topics for Procurement & Supply Chain“. In doing so, critically mirror your own area of responsibility for a moment. Even if the pandemic limits us in many ways – being forward-looking for your own company in the mentioned areas is not one of the limitations!
ADCONIA thanks all participants of the renewed survey and is looking forward again to the queries, comments, conversations and discussions as we perceived them after the last publications.
Oberhausen, February 2021
Gregor van Ackeren
Managing Partner, ADCONIA