Video transcript: Resilient Supply Chains

Transcript

Global supply chains are facing disruption and uncertainty, leading organisations to grapple with rising costs, resilience concerns, and net-zero priorities. PwC is encouraging its clients to adopt a new approach, advocating the integration of human-led and tech-powered solutions for improved and better outcomes.

Alex Iszatt, reporter: Historically, consumers and organisations have been able to access the materials, products and services they want, when and how they want them. But those things that have felt stable for some time are now increasingly disrupted or out of their control. In response, organisations are having to change how they think about their supply chains.

PwC is helping leading companies transform how they operate - combining technology, data and insight to help them make smarter decisions and overcome these challenges.

Alistair Kett - Lead Partner, Supply Chain and Operations, PwC UK: There are two very clear dynamics in place.

The first one is this concept of availability that has been historically driven by price.

We’ve seen a whole portfolio of events from Ukraine through to Brexit through to issues in the Suez canal. All of which has disrupted availability of core components.

The second point then is that within your own supply chain you need to have a far more detailed and forensic lens so that you have a level of transparency to inform those decisions.

We’re looking at organisational health from a financial perspective, from an ESG perspective, what are your emissions. We’re also looking at whether you’re sanctioned, are you likely to be sanctioned. But equally what is your operational health?

Most organisations I’ve talked to in the last two or three years have felt some sort of shock to the system that has been predicated by a supply chain event. That has changed the psychology of most organisations into realising that this is no longer a side show you might touch on as part of your organisational planning or broader enterprise strategy. It is a fundamental core component of your business. And organisations need to change the way they think about what supply chain means to them.

Alex: Data-driven insights and powerful new technologies will deliver results. But genuine transformation requires organisations to embrace new ways of working and thinking. Success depends on embracing new approaches, and encouraging collaboration across the supply chain.

Rachael Eve - Director, Procurement Operations Transformation, PwC UK: Availability is about how can you better work with your suppliers in partnership.

It’s about cross-functional business units coming together to solve the challenge. It’s not solely going to be the responsibility of procurement, no less supply chain, no less the finance function. It really is about everyone working together to ensure you have that business continuity and ultimately business resilience.

Technology is a huge part of business transformation at the moment. It enables our people to make better decisions and really the heart of that is data, good data, to enable you to make robust decisions, but also to have visibility, whether that's cost, whether that's your suppliers, your contract terms. A lot of that needs to be housed somewhere and it needs to be governed effectively in order to make those decisions.

It's not really about the technology itself. It's about what it's enabling you to do.

Alex: An accelerating move to digital solutions means organisations are increasingly reliant on third-party relationships for success. And nowhere is this more pronounced than in the Financial Services sector.

Penny Flint - Partner, Financial Services and Third Party Risk Management, PwC UK: For clients it’s become really important for them to understand the importance of third-parties for them achieving their organisational strategy.

If you don’t have a robust third-party risk management value you can’t create value for the organisation, you can’t meet the strategy, you can’t move toward your digital economy and the role you want to play in that.

It’s really for organisations to think about how they deliver services. You really need to understand the data, the technology, the people, the property and the third parties it takes to deliver that service.

Historically those have been considered in siloes. So for many organisations, in order to become more resilient, they’ve been trying to map this.

One of the key steps they have to do is to identify inherent risk, what is our appetite to outsource these services and what would happen if there was a defect or failure.

Alex: While such a multifaceted challenge may appear overwhelming at first, it’s important for businesses to take action. Even incremental changes can start to deliver results.

Fred Akuffo - Partner, Supply Chain Operations Transformation, PwC UK: When I advise clients I think of it as physical resilience versus the digital resilience. And when you bring the two together you get a powerful combination.

Something I’m very passionate about is which I refer to as the roadmap to an AI-driven supply chain. It’s not a journey and it’s not an instance either.

It’s a gradual, sort of intermittent approach of organisations looking at what they can actually systemise so they can start to make better decisions and start to process and accelerate faster. How can they become more digitised from a data perspective so they’re not going to pieces of paper and everyone is sharing into the same information domain to make decisions for the global organisation.

We're moving from the resilience phase of things into understanding availability a lot more and how therefore organisations need to position to work with it.