From the semiconductor crisis to a global pandemic and now the Russia-Ukraine war, the automotive industry has struggled with supply chain challenges because of global volatility. We speak to Christine Cheminay, Director of Global Purchasing Battery Systems at Webasto Group on the supply chain challenges facing the automotive industry, sustainability, and women in leadership.
Global developments, such as the COVID-19 pandemic in 2020 and the recent Russia-Ukraine war, have a ripple effect across industries. What are some supply chain challenges facing the automotive industry right now?
It is a very volatile situation and indeed, while we start from COVID-19, let’s also not forget about the semiconductor crisis. We have been facing a shortage of chips for almost two years and are chasing electronic components on a daily basis. with COVID-19, the effect was increased because, in that period, modern consumer products got a stronger focus while automotive volumes went down. As now both industries want to be on a high level, we face a shortage and price increase.
We see the same effect on energy and logistics for the past year. Plus, the raw material prices have increased and now there is war in Ukraine where we have partners and suppliers that we need in our chain.
What it led to is a need for us to be fast in creating a task force and implementing it in our daily business, to have daily check routines, resilient people, and reliable supply chain tools. This is a challenge.
It is putting a lot of pressure on people. COVID-19 brings a lot of mental challenges. Not for everyone, but there are people who are tired, lonely, and stressed – overall overwhelmed by this situation, and we should not forget this in the daily run of activities.
I think that tension must be in the daily focus of leaders in a company – to think about how we care about our people. Where can we support them and how can we create balance?
And it is not only about big steps. I think we need to watch the small steps and small support for our people. It is an attitude of how we approach our people to get into a positive mindset based on our values, our culture.
But of course, the longer these struggles last, the more exhausting it is for everybody. So that’s why we cannot just rely on being friendly to each other or doing an activity together. We must really think about how to implement an environment that is supporting the challenges of the market.
How can businesses ensure supply chain resilience amid disruptions due to global crises?
That’s interesting because we’ve talked about resilience for almost two years now. We started with COVID-19, and now companies who can be resilient have already implemented plans.
But in an individual business-related situation, we need to look at what resilience really means. For purchasing, it can mean different sourcing behavior (e.g. multiple-sourcing instead of single sourcing). Or can we change to a different material or technology?
For me, a one-size-fits-all solution doesn’t exist.
I really believe that sometimes we need to be creative or change the demand. And that cannot be implemented from just one function. It always has to be a cross-functional activity in a business environment.
For example, if I have a certain chip on a battery management system that I foreseeably cannot get on the market, the team of purchasing, R&D, validation, and sales need to find a solution together.
And what I also believe is that, to some extent, we need to accept that there are disruptions. I do not see an end for the moment. Rather than just accepting the situation, we prepare and support our people in the best way. We need to understand which people are not coping well with this pressure and guide them as leaders.
Keep up with the latest digital trends in our 90Minutes Insights webinar series. View the full schedule here.
What do you think are the main obstacles organizations in the supply chain and automotive industries face with improving their ESG initiatives?
It’s kind of an additional focus that we have seen for a while. I really trust, especially in automotive, that we are already good to some extent. But what I see is that we have to decide on the right tools and define the right measures for baselines and targets. If you have that, you can always define a strategy and ensure that it fits to the business.
Sustainability has a price tag, and I think as a society, we must be honest about that. I think sustainability won’t be possible by just doing things differently. I think we also need a change in our approach and how we measure our business, our sustainability.
Let us compare it to personal behavior. If you are truly convinced that it’s better to buy local products, you will change your behavior.
Coming back to business, the whole supply chain is responsible. For me, there is a big chance now to take a holistic approach to how we, as a society, want to treat the environment, the world, and what are the consequences. How do we ensure that what we intend to do is happening on every level of the chain?
In this matter, digitalization and data solutions are key aspects as well. I don’t think any of this is possible without that.
Though the number of women in leadership positions has increased overall, the automotive industry appears to be lagging in this respect. Why is this and how can organizations within the automotive industry attract more female talent into this field?
For me honestly, that’s still a big-ticket for the many industries, institutions, and governments. And for me it is not about gender only. The key is gender and diversity.
Sometimes I also do see some light. We see more women in leadership now; we see more diversity. I think this is the most valuable approach a company can take. If we have one cultural background and one dominant gender in a company, this cannot bring an organization to another level. Yes, I believe gender and diversity causes more friction and it is more exhausting, but I truly trust this brings businesses forward. Therefore, we have to incorporate this approach in how we set up teams and organizations.
To encourage more female or diverse team members, I think role modeling and mentoring are important. Plus different working models like shared leadership. It is not simple, but I trust it is possible.
I also think being flexible is important for example when it comes to mobile offices. Are we forcing people back to office? Are we going back to the Stone Age? I think there’s room for flexibility and improvement.
Also, social acceptance that women are working and having a family is important. . This is a mindset and I think it is something we can just continuously work on.
Still, I have to say, I do like the quota. At one point in time, hopefully we will not need it anymore. But for the time being, we don’t see enough success and quota is the lever to drive implementation.
There is room for changing minds, but we must have the courage to trust that change is healthy. Of course, that’s not to say we don’t have to work hard. We know this is a competitive market and we cannot be happy all the time. We have to be creative and innovative. We have to push and find new solutions, and work hard and smart. But we also have to balance it out with an environment that allows and ensures open mindedness, while driving a culture where diversity is a given.
*The answers have been edited for length and clarity.
At the core of every efficient supply chain is well-planned logistics and transportation. The future of transport is eclectic, and gas carries the most important role in this transition to achieve sustainability while maintaining competitiveness. But to make the transition smooth, I call for increased transparency, cross-industry partnerships, and for a more comprehensive view on the sustainability of value chains, says Sharareh Edström, Director of Traffic Sweden, Gasum.
As one of the leading producers of biogas and handler of biodegradable waste in the Nordics, Gasum has built a reliable gas infrastructure that secures the availability of gas in the Nordics. This infrastructure covers the full value chain from production of biogas to transport and distribution.
“Gasum has contributed tremendously to the development of the market and invested a lot to make sure it’s easier for transporters to convert to gas”, Edström says.
Today, sustainability is the driving force for many players, and many more are joining in. The regulatory environment is steering and supporting cleaner solutions. The customer demand for low emission solutions has increased rapidly. And as things evolve fast, this also leaves some conceptions outdated.
The key questions around biogas usually focus on availability and costs. Will there be enough gas to satisfy the demand, does it require additional investments in infrastructure?According toEdström, these questions were very topical in the transport sector just a few years ago. Conversion to gas was seen as complicated and expensive. As these fears have diminished with Gasum´s investment plans to continuously grow the filling station network, the question of continuity still lingers – will the gas run out?
“There is this misconception, that there wouldn’t be enough feedstock to produce sufficient amounts of biogas for traffic. There is a realistic feedstock potential in the Nordics to make 30 TWh worth of biogas. We’re aiming to supply 4 TWh of biogas to the market through our own and partners’ production in 2024 already. This amount would cover the yearly fuel need of around 10 000 heavy-duty vehicles. In addition, the gas infrastructure enables the utilization of synthetic methane and power-to-gas solutions in the future, which significantly expand the availability of renewable gas”.
In addition to Gasum’s own initiatives, there is also support from the Swedish government’s behalf to increase the production of biogas. As part of the Klimatklivet, a support initiative for local and regional investments, the Swedish government wants to introduce production support for biogas: 500 million kronor next year and then 700 million kronor annually until 2040.
Edström says that customers recognize gas as a smart and cost-efficient investment, knowing there will be continuous investments in the infrastructure, which also creates more stable prices than the fossil alternatives.
In Sweden, there are a total of 27 stations, of which Gasum has opened 17 liquefied natural gas filling stations for long haul gas trucks and many more are to be built in the nearest future.
In 2020, sales of liquefied gas increased by 230%. The trend continues, not only in Sweden but in the neighboring Nordic countries and the rest of Europe, as well.
A need for a transparent and holistic view – taking action where it matters
Edström says, that the sustainability discussion on supply chains occasionally tends to lack a holistic view, and thusly a certain part of the chain might get a proportionately larger focus than it should, referring to transport emissions.
“Today, we’re talking about the whole value chain, therefore it doesn’t make sense to focus on just one part of it – the tailpipe. We need to look at the whole value chain when it comes to the life cycle. From the fertilizer to the food being cropped, to the final product sitting on the table”.
Gasum offers expert services for heavy transport, maritime and industry, making the company active in the whole value chain. Renewable gas offers a new link between the industries.
“Gasum’s liquid biogas is produced from biodegradable waste such as manure, food waste, damaged crops and process water from the industry. During the production, we also get biofertilizers, that can be used to grow new crops in the Swedish fields. When you choose liquid biogas, you become part of the circular economy “, Edström says.
“I would like to have more transparency than what we have today. For example, cross-industry emission savings should be much higher appreciated than tailpipe emissions. We need to redirect our efforts much easier to see a product’s true lifecycle emission”, she adds.
Partnering up across industries
“I would like to see industries collaborating to integrate our value chains and visualize how circularity is bringing exponential effects not just in transport but in agriculture and waste management as well. Once we get these industries working seamlessly together, then we will see the sustainable benefits and reach our ambitious national goals”.
The key to a better understanding is to link between the different industries, fuel, industries with organic waste and agriculture, and make the benefits of circularity visible and understandable for the larger public.
In addition to aiming for better transparency, Edström advises companies to really study their value chain to identify where the most significant emission savings can be made and take action there to minimize the impact on our climate.
“Companies need to be very clear on where they’re emitting emissions. It very seldomly is the last mile that is the problem. There is a need to recognize where the emissions lie and take action on a global, and a national level.”
At the recent Nordic StrategyForum Supply Chain and Procurement virtual event by Management Events, supply chain decision makers gathered together for interactive discussions on rising trends and concerns.
Covering issues from business adaptation and remote working to management styles, in-depth insights were abound throughout the discussions.
TAKING ADVANTAGE OF CHANGES
As one of the largest disruptions that the supply chains have ever experienced, the COVID-19 pandemic took many companies by surprise with challenges such as the availability of materials, pricing, and delays in new vendor development.
A Chief Supply Chain Officer (CSCO) observed that every 5 to 7 years, there’s some kind of event that affects the global supply chain, like the 2010 Icelandic volcano eruption and the 2011 tsunami and Japanese nuclear reactor disaster.
But the disruptions caused by those events lasted for about a month, whereas with the coronavirus outbreak, the disruption has lasted more than 7 months so far with no near end in sight. Many supply chain leaders expressed that the ensuing supply chain upheavals were unexpected and unprecedented.
Management Events’ Nordic StrategyForum Supply Chain and Procurement
For instance, there was suddenly a drop in the availability of pallets, containers and packaging. As one attendee mentioned, “There were premiums on getting containers, leaving our goods stranded in production countries.”
“Then there was the increase in demand for toilet papers, consumer goods, home office equipment and medical goods while demand for cars and machinery suddenly halted. These were very volatile times.”
In regards to that, a participant shared that being closer to the end market is vital at the moment.
“We have to understand the demand picture and be more involved in how supply is working. We also have to understand the customers’ needs and be even more service-minded about fulfilling the needs.”
The disruptions that emerged from the pandemic were also concerning for supply chain executives as countries experienced waves of the virus and lockdowns at different times.
“The crises you are working on keep changing,” voiced a supply chain leader. “From March, you try to stay ahead and stock up on the right products in the right location. Spring was quite good, but then suppliers were forced to close down so even if you have the chain open, production has stopped.”
Others expressed the same sentiment:
“There are always new things coming up, always a new hurdle to go over.”
“There have always been hurdles in the supply chain, but now they are coming at a faster pace.”
However, some have taken the changes in stride, learning from the first COVID-19 wave and preparing for growth and agility opportunities:
“These changes have forced us to make faster decisions, but this is also better decision-making.”
“We have become more sustainable as a company, going from supply chain via air to sea.”
As commented by a top supply chain manager, “It is volatile now, but in the long term, this will stabilize,” and while the pandemic was a shock back in March, the shifts undertaken were “mostly minor permanent changes”.
“This is a ‘new normal’. Will this affect the way we think about risk?” one of the leaders questioned. “Will this lead us to be more resilient in the future?”
According to a participant, COVID-19 offered a chance to reconsider risk strategies and situations, such as the risk of no delivery from a cheaper, offshore delivery versus a more expensive but guaranteed, nearshore delivery.
Another risk assessment includes planning supply chains amid local lockdowns of regions, countries and hubs. As a decision maker probed, “If a hub is locked down, how do you ensure supply chain from other locations?”
This is a particular concern with the participants because the lockdowns affect various parts of the supply chain at different times and in different countries.
“There are lockdowns that stop delivery of raw materials, lockdowns of factories, and lockdowns that stop shipments, so it’s not a lockdown that happens all at the same time, but in random order.”
A supply chain manager commented the challenge was bigger for those who source products from European suppliers while another specified that, “Electronic products were the most difficult to obtain as they all come from Asia.”
Others related that Tier 2 suppliers were the actual challenge with the participants encouraging end-to-end talks to better connect the supply chains and searching for source alternatives to ensure sustainable supply chains for the future.
There were other topics brought up during the discussion on risks. One of which was the leverage and advantage of having a decentralized supply chain model, and the other was on the issue of Brexit, which a top-level executive stated is a big risk within the supply chain.
REMOTE WORKING
Many of the participants mentioned positive factors about their current work situation, citing efficiency, savings on time and costs, and faster decision-making as some of the upsides of remote working.
“Remote work is surprisingly good,” exclaimed a CSCO. “For global supply chain, you were already used to working remotely with global teams, but this change has intensified the investment in tools and processes for better remote working.”
“People working from home meant quicker implementation of digital solutions, and employees are more willing to use these new tools.”
Another reported that, “From the HR perspective, it turns out that remote work is a competitive advantage for white-collared workers. Alot of employees enjoy working from home due to the balance of work and family.”
“In Europe and the USA, there’s an issue with ergonomic working spaces at home,” an attendee shared. “While in other parts of the world, such as Africa and Asia, there’s an issue with local internet connections and connectivity.”
Others shared that it’s hard to conduct remote team building, and that some employees are still unused to virtual working. Furthermore, even with the benefits of remote communication, there is still the need to have real meetings and contact with colleagues and customers in the future.
Upcoming events: Network with decision makers and solution providers for more in-depth insights in our supply chain events in Germany, The Netherlands, Sweden, and Finland.
DIGITALIZATION IMPORTANCE
As can be seen in many industries, the implications of COVID-19 drove huge advances in digital progress, and decision makers in the supply chains agreed that digitalization is one of their most important projects and investments.
“The crisis led to rapid developments in virtual inspections through camera, with video meetings allowing us to record what is seen and said during the inspections,” a C-level executive revealed.
“It saves a lot of time compared to sending people around the world. Of course, we still need to go there, but first checks can be done virtually even if final checks are done in-person.”
Nevertheless, supply chain organizations have to step up with the digital processes and routines to ensure they are continuously updated with all the markets and functions in their company.
CHANGE IN MANAGEMENT STYLE
While many of the participants mentioned that their companies have taken the opportunity to develop their workforce and invest in educational and university courses for their staff, they have also made changes to their leadership style.
A senior executive commented that calm management is the key in handling this large and demanding crisis. Others agreed with the statement, claiming that leadership in general is vital – not just with the team but with suppliers as well.
Some explained that their management approach has changed into a more coaching style whereas others were focused on promoting better team spirit and culture by having daily meetings to produce more efficient employees.
As the world moves into 2021 with the coronavirus still affecting businesses around the world, supply chain leaders need to make preparations for multiple case scenarios coming in the future months.
From new waves of the virus and the facilitation of the COVID-19 vaccine to implications from loosening lockdowns and repeated changes in customer demands, sustainable and resilient supply chain solutions will undoubtedly be foremost in the minds of Chief Supply Chain Officers.
Supply chains have always been vulnerable to disruptions, from natural disasters to geopolitical issues. But supply chains of the modern era have never faced the level of upheaval as the one brought by the COVID-19 pandemic.
“Events like coronavirus are rare,”commented Samuel Mathew, Global Head of Documentary Trade at Standard Chartered, “but the impact of them are so much greater because the world is so interconnected.”
In these past months, the outbreak exposed the vulnerabilities of the decades-old globalization strategy of interdependent and multiple-tier sourcing, driving organizations to take a long hard look at their supply chain strategy for business continuity and growth.
RETHINKING SUPPLY CHAIN VISIBILITY
An often cited example of supply chain disruption is the shortages faced by automotive factories due to the devastating earthquake and tsunami that hit Japan in 2011.
The impact of the natural disasters was not only felt by local manufacturers. International assembly facilities and automotive brands were also forced to stop or slow production due to parts shortages by lower-tier suppliers located in the affected area.
The multi-tiering supply network combined with lack of data and information created a domino effect that spanned across the world. And 9 years later, organizations are facing the same issues brought by a new threat, COVID-19, prompting business leaders to emphasize further on end-to-end supply chain visibility.
Big Data and Analytics
Management Events’ recent Executive Trend Survey found that 64% of supply chain executives named data science and analytics as their top investment priority for 2021.
The finding corroborates with Oxford Economics’ research study, where 86% of executives believe that supply chain visibility and flexibility can be increased by the use of big data, which some organizations have been investing heavily in.
For example, Georgia-Pacific, a manufacturer of tissue, packaging, paper and other products, is working on a data consolidation project to merge all their data while using a data analytics logistics service to estimate delivery times.
Milind Balaji, Senior Supply Chain Manager at Georgia-Pacific, disclosed that the biggest problem is knowing where the products are, and that real-time insights could help with decision-making on rerouting or storing the shipments differently in the case of unexpected events.
“Supply chains are increasingly becoming data-driven, and businesses that lack visibility into core supply chain functions fall behind when it comes to making informed business decisions.”
Data analytics also play a key part in mapping and monitoring global suppliers, allowing firms to keep track of the locations and abilities of tier suppliers and preventing single-sourcing.
This analytics approach enables General Motors to determine, within hours, the impact of a disruption to their supply chain for the days and weeks to come, giving them “lead time to execute avoidance and mitigation strategies.”
McKinsey Global Institute seconded the strategy of mapping suppliers in their recent global supply chain report, mentioning that, “Creating a comprehensive view of the supply chain through detailed subtier mapping is a critical step to identifying hidden relationships that invite vulnerability.”
According to Fred Baumann, the Group Vice President of Global Industry Strategy at Blue Yonder, “[Big data and analytics within the supply chain] give the ability to navigate disruptions months in advance, rather than responding once they have happened. By identifying patterns in what can initially seem unrelated factors, businesses are in a better position to make immediate and effective decisions than ever before.”
Internet of Things (IoT)
The Internet of Things (IoT) is a game-changer in improving the visibility of every aspect of the supply chain, from shipment tracking to inventory management.
Although the primary use of IoT is still mainly on asset supervision, the emergence of the coronavirus has led business leaders to see the crucial role of IoT in real-time tracking and emergency planning.
Delivery optimization – While tracking of goods helps companies to determine the arrival and location of the products, the data collected by IoT sensors also enables businesses to identify delays and weak links in their supply chain and optimize their transportation routes for faster delivery.
Alternative routes – Additionally, IoT allows companies to make fast and data-driven route changes in case of unexpected circumstances, allowing flexible contingency planning and preventing lengthy delays.
Product monitoring – When faced with logistics disruptions, companies of old had no way to monitor the state of their products. But with IoT devices providing real-time data, companies are able to constantly monitor the conditions of their goods, especially perishable items, in their warehouses and transportation storages.
A prime example of IoT supply chain usage is DHL, which implemented IoT to predict market demand for cost saving and to track their trucks for increased visibility. Back in 2018, DHL launched DHL SmarTrucking in India, which leverages IoT technology for route optimization, predictive analyses, consignment tracking, and container temperature monitoring.
“Using a range of IoT sensor-equipped machinery throughout the supply chain means that potential problems or stumbling blocks can be flagged in real-time. Previously this would cause severe disruptive downtime. Instead, we’re seeing a systemic change in supply chain transparency and functionality.”
Based on the 2020 MHI Annual Industry Report, only 12% of supply chain executives currently employ AI in their organizations, with 60% expecting to implement the technology in the next five years.
Among the AI subsets, machine learning is often mentioned as a high-benefit technology for efficient supply chain management (SCM), and is also a top focus area for CIOs.
“Machine learning techniques, including a combination of deep analytics, IoT, and real-time monitoring, can be used to improve supply chain visibility substantially, thus helping businesses transform customer experience and achieve faster delivery commitments.”
Amazon, for instance, has been using machine learning for automated warehousing and drone delivery while giving its supply chain direct control over areas such as packaging, order processing, support and logistics.
Another giant with a massive product portfolio, Microsoft, employs machine learning techniques to develop a fully integrated supply chain system that captures and analyzes real-time data, and assists in risk mitigation and quick query resolutions.
During the pandemic, customers and businesses alike were faced with uncertainties on order shipments. But companies that modeled their operations with AI handled the disruption better than their counterparts.
“When you’re dealing with a situation like this, where information is changing constantly, machine learning models are very useful,” Bill Waid, the General Manager of Decision Management with FICO, explained in an interview on AI and supply chain. “It can very quickly crunch those numbers and make very informed estimates of what the forecast patterns are looking like.”
In fact, management consulting company, West Monroe, believes that machine learning tools “may eventually make better decisions than even the best supply chain managers.”
According to IBM, the concept has been around for more than a decade, but is getting increased attention from business leaders looking to effectively manage complex and siloed supply chain systems.
“In these volatile times, supply chain visibility and control have never been more important. Control tower concepts and data analytics capabilities must be upgraded to meet new demand patterns, support growth opportunities, and manage greater external risks.”
– Alexander Gunde, President of Global Technology Sector at DHL,
Hence, businesses seeking to implement control tower solutions need to have a clear purpose and defined function for the technology, whether it’s supply-chain visibility, scenario planning or alerting.
Supply chain management information resource, SupplyChainBrain, stated that, “Too often organizations aren’t clear on the scope of the control tower solution, the key functions that are included, and the span of control for the particular solution. That’s why control towers often fall short of expectations and benefits realization.”
The IBM Sterling Inventory Control Tower, for example, focuses on inventory management and provides a single almost real-time view of an organization’s inventory, including product availability, shortages, supply-demand imbalances, and supplier orders. The solution enables inventory visibility across the supply chain while identifying external impacts for faster response and better customer experience.
As control towers vary in definition and capability, supply chain leaders need to ascertain the right time for them to invest in the technology.
Christian Titze, the Research Vice President at Gartner, advises that, “A control tower only makes sense when the supply chain organization already has a certain degree of cross-functional integration in place — internally and with business partners. Otherwise, the tower won’t be able to observe enough signals to support accurate decision-making.”
ACHIEVING SUPPLY CHAIN GOALS
The development of data, IoT, machine learning and control tower in supply chain management substantially enhances an organization’s visibility into each stage of their product journey, enabling them to make adjustments to routes and inventories when necessary.
However, advanced technologies can only do so much. To achieve an effective and responsive supply chain, companies need to start with the problem statement.
“Ask yourself,” Anne Johnston Weaver, Global Supply Chain Intelligence Platform Leader at EY, said in an article on real-time supply chain visibility, “What problems are you trying to solve, and how does solving this problem help achieve your business goals?”
At the moment, there’s a significant gap between the need for visibility and the actual visibility of supply chains. But companies that take the effort to address and gain transparency will not just see cost savings, risk reductions and overall efficiency in their supply chain management – they will also be in an advantageous position to thrive in the markets of today and tomorrow.
The virus outbreak has pushed many companies to hasten the digitalization of their processes, especially with their back-office functions.
Facing challenges such as manual processes, paper-reliant procedures and limited operations visibility, C-suites are quickly realizing that their systems are in dire need of a digital overhaul.
Dany De Budt, Country Manager of the Benelux for Basware, shares how digitalization solutions help companies maintain continuous cash flow and business continuity even through the worst of times.
A SNIPPET OF BASWARE
A provider of cloud-based purchase-to-pay and e-invoicing software, Basware has helped to simplify invoicing and streamline procurement processes for clients in over 50 countries.
When it comes to digital transformation, many organizations tend to overlook the ‘back’ of their company, including finance and accounting.
With the emergence of the coronavirus and its effect on global trade, the digitalization of these essential operations are pushed even further down as companies shift their focus to business continuity tactics.
But why is digital acceleration so important? How does applied intelligence optimize business practices?
De Budt (picture left, from Computable) explains that digitalization helps firms to make strategic business decisions based on keen analytical insights from digital intelligence.
“Actionable intelligence has become a company’s most valuable asset. And while human intelligence is still important, it is not enough on its own.”
“A company needs to create a business intelligence framework that is based on human intelligence but paired with digital intelligence,” De Budt imparts. “Without digital intelligence, a company will be disrupted sooner or later.”
“With better availability and application of data and analytics, customers have been able to model and understand the ensuing impacts to their people and business faster and more accurately than before, resulting in reduced lead times from planning to execution to impact.”
He illustrates how digitalization, such as “transitioning from on-premise to cloud-based solutions”, helps reduce inefficiencies and costs, including physical overhead and human assets.
“It helps with an overall streamlining of systems, creating efficiencies that result in better visibility into your corporate operations.”
DEVELOPING DIGITAL TALENT
Although businesses across industries are adopting smart innovations and digitalization, a key issue most of them face is finding the right talents and training their existing workforce.
A trend survey by Management Events found that over 60% of business leaders named availability of key skills and talents as the biggest external impact to their business growth.
De Budt reinforces the finding, stating that digitalization has made the talent landscape more competitive.
“The skills needed for an evolving digital workforce – that has increasingly become remote – have become more critical.”
“Talent needs to adapt and embrace a flexible mindset and schedule,” he emphasizes, “They need to be self-disciplined, and much more organized, with excellent problem-solving capabilities. Digital transformation requires digital competence.”
De Budt names the Human Resources function as a critical part in an organization’s digital transformation.
“With each new digitization initiative, having highly-skilled, technology-savvy talent to deliver the best omnichannel customer experience will determine overall deliverable timeframes,” he remarks.
“It places HR in a crucial role since employee engagement, training and onboarding are its domain.”
TRANSPARENCY OF OPERATIONS
One of the prevalent issues that companies had during the lockdowns, and before the outbreak, was the visibility and accessibility of their finance and accounting processes.
“Many companies were caught off-guard by the COVID-19 pandemic,” De Budt relates. “While many firms have business continuity programs, most of those were templated, basic versions of how to handle temporary disruptions.”
In fact, a survey by Gartner discovered that only 12% of companies around the world are highly prepared for such crises. Other studies found that some organizations are ill-equipped with the right technology to remotely access and manage invoices, which are still heavily paper-reliant and locally stored.
“Transparency into operations is vital to a company so it can take a snapshot of its financial health at any time.”
De Budt points out that, “Investments into technology that improves processes, get a handle on spending, and create 360-degree visibility will be a significant factor in business continuity planning, allowing them to manage business risks and pivot during supply chain disruptions.”
“For Basware, we’re able to deliver those types of solutions because we’ve employed them ourselves.”
He further states that, “Using Artificial Intelligence, advanced data and predictive analytics, we provide automation with machine learning that results in increased transparency into a company’s finance, procurement, and supply chain operations.”
POST-COVID-19 SUPPLY CHAIN
The pandemic gave organizations a long, hard look into their progress of digital transformation, or lack thereof. While a majority of organizations were in the midst of digitalizing their business, most companies were not progressing far enough to face COVID-19 unscathed.
According to De Budt, one of the most impacted business aspects is the supply chain.
“Supply chain complexity has grown from simple domestic supply chains to more complex and global supply chains that are vulnerable to third party risks,” he reveals.
He also discloses that as firms address their business continuity issues, they realize there are supply chain blind spots that the outbreak exposed, particularly in the transparency of their supply chain.
“Suppliers from all over the globe are delivering to locations worldwide, exposing companies to risks created by an unmanaged supply chain and lack of visibility.”
“At Basware, we see Visible Commerce as the future.”
“Being able to have complete visibility across all the flows of money, goods, and services around the world is what we call Visible Commerce,” De Budt reveals. “It’s a state where transparency and data lead to more effective and ethical decision making – a better world economy for all.”
FINANCIAL IMPACTS OF THE SUPPLY CHAIN
The coronavirus impact on the supply chain consequently affects the financial flow of organizations.
De Budt comments that since companies lack visibility on their supply chain, they don’t have a full grasp on their finances.
“Companies that gain visibility into their supply chain are in a much better position to avoid or pivot when an issue comes up. Still, they won’t get there unless they invest in the advanced technology that’s available to them.”
“The challenge here, of course, is the risk of doing nothing.”
He proclaims, “For those that are unable or unwilling to adapt or change, they’ll suffer financially and increase their exposure to supply chain risk, with potentially catastrophic results. Inaction is not an option.”
To give companies a clear view on their financial operations, Basware offers a Financial Impact Analysis. Highlighting their current stand on finance, values and savings, the solution allows businesses to make informed decisions using actual real-time data.
USABILITY AT THE FOREFRONT
However, technology advancement is not the only focus of Basware’s services. From the accounts payable and accounts receivable solutions to their source-to-pay AP Automation and e-Procurement, usability remains one of their core focus.
“The role of digital capabilities is to make everything – everything – easier for our user clients,” De Budy stresses.
“Just like friction in a supply chain can wreak havoc, so can user friction when navigating an application. An intuitive user interface, coupled with automation and machine learning, makes for exceptional user experience, increasing user adoption and productivity.”
LEADING THE DIGITAL CHANGE
Digitalization, or any big corporate change, are usually expected to begin from the top management, but De Budt begs to differ.
“While it’s important for leaders to lead by examples,” he conveys, “expecting change from ‘the top’ is unlikely to occur in this current COVID-19 environment.”
“Change more likely needs to be driven from the bottom up.”
He continues to explain that the planning and vision for digital transformation start at the top, but the change itself begins from the bottom, to be built piece by piece, ensuring the strongest foundation possible.
Digital acceleration is indeed crucial to ensure continued business growth and competitive advantage, but it needs to be, as Forbes put it, “guided by the broader business strategy”.
“A leader’s decisions shouldn’t be made off instinct or gut feelings alone,” De Budt cautions. “A leader may have the final say, but their decision should be based on reliable insights from trend analyses using big data to reveal patterns to better future-proof their businesses.”
“Data and analytics gathered by intelligent technology can be used to inform business decisions and bring further efficiencies, transparency, and scalability to a company’s operations.”
De Budt deeply believes that digital advancement is a vital, and necessary, contributor to business development.
“Collaboration between customers, partners – and even with competitors to an extent – are key to success,” De Budt imparts. “But technology will lead the evolution to a better state of business. One that allows for increased transparency, automation, and remote working capabilities.”
Others expressed the same sentiment:
Many of the participants mentioned positive factors about their current work situation, citing efficiency, savings on time and costs, and faster decision-making as some of the upsides of remote working.
