Insights on People, Process, and Technology
Sikko Zoer, an advisor to Boston Consulting Group’s supply chain practice, shares his insights on the impact of COVID-19 on supply chains and the importance of embracing agility in an ever-changing climate.
Supply Chain Agility is Key for Success
Zoer emphasizes the need for agility in the supply chain industry, especially in the wake of the COVID-19 pandemic. He notes that the pandemic highlighted the importance of resilience and the need to ensure that products are available to customers under all circumstances. To achieve this, Zoer stresses the importance of end-to-end visibility and transparency in the supply chain network, from suppliers to distribution channels.
Zoer also points out that digitalization and scenario planning are crucial for making supply chains more agile and predictable. He emphasizes the need for a holistic approach that includes people, processes, and technology, as well as data and data quality.
“To be agile, you need also to understand what the status of your supply chain is, and really have that end to end visibility, that transparency of what’s happening in your supply chain, both upstream when you think about suppliers and how your supply network is performing, but also downstream how your own distribution channels for example, are performing.”
Sikko Zoer –
Supply Chain Consultant and Thought Leader
Prioritizing Planning for Transformative Success
According to Zoer, one of the biggest pitfalls for companies is struggling to define the expected outcome and purpose of supply chain transformation. He suggests that companies prioritize planning, specifically demand planning, supply chain planning, and inventory management, to establish the foundation for successful supply chain transformation. Zoer also emphasizes the importance of data and data quality.
“Start with the fundamental foundations and start with what is the core of supply chain…most companies should start about the demand planning side, because really sensing what’s going on in your markets is key for the success and the performance of your overall end to end supply chain.”
Embracing Change and Managing Ambiguity
As a leader in the supply chain industry, Zoer suggests that leaders must accept the fact that uncertainty is inevitable and embrace change management. He stresses the importance of defining the purpose and communicating the Northstar to engage the organization and stay the course. Zoer also advises leaders to recognize and leverage the capabilities and expertise of their team, and work together to make decisions.
“Accept the fact that you will make mistakes…make sure that you make the decision. And again, you know, always with that end goal in mind.”
Investing in Supply Chain Transformation
Supply chain transformation has become a top priority for companies, especially after the COVID-19 pandemic highlighted the importance of the supply chain industry. Zoer notes that supply chain is critical for the success of most companies, and that companies are investing heavily in supply chain transformation. He emphasizes the need for Supply Chain Leaders to go out there and work together with the rest of the organization to achieve success.
“And that makes also that there is now this attention for supply chain, by the way, but that’s that’s really good news. And that’s good news for Supply Chain Leaders, it’s good news for supply chain professionals.”
Exciting Innovations in Artificial Intelligence and Robotics
Zoer is excited about the potential applications of artificial intelligence (AI) and robotics in the supply chain industry. He notes that AI is data-driven and has the potential to revolutionize the industry, especially in planning, and that robotics could help alleviate labor market pressures and improve logistics. Zoer emphasizes the need for companies to stay informed and up-to-date on these innovations.
1.Supply chain agility is crucial for success in the ever-changing business climate, especially in the wake of the COVID-19 pandemic.
2.Prioritizing planning, specifically demand planning, supply chain planning, and inventory management, is essential for successful supply chain transformation.
3.End-to-end visibility and transparency in the supply chain network, from suppliers to distribution channels, is necessary for supply chain agility.
4.Change management is essential for successful supply chain transformation. Leaders must define the purpose and communicate the Northstar to engage the organization and stay the course.
5.Investing in supply chain transformation is critical for the success of most companies. Leaders must work together with the rest of the organization to achieve success.
6.Artificial intelligence (AI) and robotics have the potential to revolutionize the supply chain industry, especially in planning and logistics. Companies must stay informed and up-to-date on these innovations.
Hi Sikko, thank you so much for taking time out of your day to be part of the aim10x Knowledge Interviews. How are you today? I'm really good, thank you. Awesome.
For our community, Can you please introduce yourself and what you do and a bit about your career path? Yeah. So my
name is Sikko Zoer. I have a long time career in supply chain actually started my career in supply chain started even supply chain went into military service, was in supply chain, started my career as I mentioned before in supply chain, worked for most of the time big multinational companies.
I worked for a Finnish company building diesel engines. They allowed me also to give me the opportunity to move into two ERP. Then SAP implementation over that, which allowed me to go to an IT consultancy. So I spent a few years in IP consultancy, business consultancy.
Then started working for a French company called Lafarge, making building materials. Worked initially as an IT leader in the Benelux countries and then moved into everything around e commerce, etc. Which essentially allowed me to go into marketing and spend a few years in marketing. And then my last company I worked was for Medtronic.
I spent 15 years in Medtronic. Started also in supply chain as a Senior Manager in the planning department. And over time, my responsibility grew. Eventually, I became the Customer Care and Supply Chain Leader for the EMEA region.
And my last position, I was the Global Leader for supply chain with Medtronic and earlier this year and when we recorded is I think is the end of 2022. But early in 2022, I started a new career opportunity or a new career challenge and became an independent consultant. I'm helping clients with all aspects of supply chain, especially in the crossroad of supply chain marketing and I.T. More generally speaking, technology. So as someone who's worked extensively on the intersection of medical technology and supply chain, have you seen any major changes in this sector since COVID 19?
And how has that maybe changed the way that you worked? Yeah, well, for sure,
COVID 19 had a profound impact on supply chain in general. And also I work a lot in health care and specifically also in health care. And I think it came with I think an awareness or indication that availability isn't always that obvious.
Before COVID 19, basically there was this expectation and it was basically also the case that materials were available. And then this this black swan COVID 19 came in and suddenly that was not the case anymore. And that meant also that there was a much more attention now for resilience. Resilience in the sense, first of all, to make sure that products, materials are always available at all times, but also that requires a level of agility.
And so that supply chain really can respond to any disruption that that pops up. But with that, there's need for resilience with this need for agility and also the need for having visibility and sense of dependency across the end supply chain from upstream. You know, how are my suppliers, how my supply network performing, but also downstream, how is my logistics organization performing? How are my distribution channels performing and to really drive that resilience.
You see also that that companies really start digitizing their supply chains because it was this need to do more scenario planning. If you want to be more agile you also need also to understand, okay, what are the options that I have? So scenario planning becomes really critical. As I mentioned before, visibility and transparency means also that digital you can become that much more, more transparent and in the end to become much more predictable.
And also that's where digital starts playing a role. So COVID 19 had this profound impact. I think it showed also how critical supply chains are. But next to COVID 19, you see and this need to become more resilient and see now also continued trend towards sustainability and making supply chain end to end much more sustainable.
And on top of that, we have the Ukraine war and the next black swan that came. And you see there's a lot of inflation and pressure on supply chains to become much more efficient. Sikko, you also mentioned the war in Ukraine and other recessionary factors that we're seeing in terms of inflation. So, as a consultant, you see several organizations that are really struggling in this ever changing climate of recession, inflation and other changes in buying patterns.
What do you think are the biggest pitfalls or development areas for companies and within the supply chain sector? And how can they work more to better those areas? Yeah, So I
think, a lot of a lot of companies are starting or are in the midst of a sort of supply chain transformation. And what I see often is that companies struggle to really define, what is the expected outcome?,
what's the purpose?, why I'm doing this?, why am I transforming? And you need to be really, really clear about that.
And secondly, when are you starting to do this transformation, and especially people most of the time talk about the digital transformation of the supply chain. You should not forget that it's not only about the technology. You need to have this holistic approach. We talk about people and process and technology.
But next to that, you should also not forget about data and all the data aspects. And also how do you basically secure or embed, those changes sustainably, into your organization. Then we talk about policies, etc. . So basically, five aspects that you need to consider when you go through that transformation.
But, I think most important is it's a change. It's a change for the organization. It's a change for the people in the organization. The way of working will change and will change dramatically, especially when you digitalize your supply chain.
Your interactions between departments is changing, which means also that you need to put in place new processes and you need to look at the structure of your organization. Last and not least, it means also that your organization needs new capabilities. And as an example, the way you maybe did Demand Planning in the past will be different from the way you will do that going forward. Where you have an Excel based planning environment, suddenly you're going to introduce more advanced planning systems, etc.
It's just a different way of working and the capabilities in your organization needs to change. All of that is quite impactful and be almost disruptive. And you should not forget about, why I'm doing this? Have this holistic approach and absolutely don't underestimate the aspect of change management.
Definitely. And as you mentioned, I think we're in a phase of ambiguity. So, you know, data and all these other factors are definitely helping. In a previous interview, you mentioned that one of the key attribute for supply chain leaders is knowing how to manage ambiguity.
And I think for now that's actually one of the biggest skills to have. Can you mention some strategies that maybe you have taken personally in your career to manage uncertainty just within your career? Yeah, first
of all, accepted the fact there is uncertainty and you never know how things will turn out in the end. So that's where it starts.
But you know, to manage uncertainty, you need to define again, what is the purpose? What's basically the Northstar? What are you working to and keep that in mind and consider that with every decision that you are taking, but also communicate about as a leader, communicate about that Northstar. So that you can start engaging the organization and engaging the people in your organization.
Also make sure that you always stay the course. You have this Northstar and you stay the course because in times of uncertainty there might be a tendency to go maybe left and right but just stay the course. Sometimes you need to do a little bit of sidestep but make sure that that sidestep is always in function of that end goal that you have. I think also as a leader, accept the fact that you will make mistakes and you will make decisions.
And in hindsight you might say, okay, maybe that was not the best decision, but at least you take a decision. The one thing that I regret the most, probably when I look back on my career, I also had a decision that I didn't think, because maybe, i was too painful or whatever. I didn't take the decision. And that's the worst thing to do.
You know, make sure that you make the decision. And again, you know, always with that end goal in mind. And last but not least, as a leader, it can be lonely at the top. And make sure that you do it together and do it together with your peers, but especially do it together with your team.
And see and recognize the capabilities, the expertise and knowledge in the team and embrace that and leverage that to come to good decision. I think that that would be my advice when you talk about ambiguity. Awesome. And I think this kind of delves very nicely into our next question that one of the top priorities for companies now has become supply chain.
And I think, you know, since COVID, we've heard supply chain as one of the biggest buzzwords. But a lot of organizations waited for this crisis to really evolve their supply chain. Why do you think that's the case? Why have companies been more reactive than proactive?
And why do you think that happened? Or do you think the thought process has changed? Are you seeing more companies being proactive in scenario planning and investing in that change than before? Well,
definitely many companies are now investing in supply chain.
And it started all with COVID and now you have Ukraine crisis, etc. There is now an understanding and a recognition of the fact that supply chain is much more than maybe, I would almost say a hygiene sector. I think in many companies supply chain was this department that did their job where basically the expectation was to make sure that the products are there in the right quantity at the right time, the right cost, etc. , etc. . And that's it.
Almost a sort of a hygeine factor. And those crises have showed that what supply chain is and what supply chain is doing is not that obvious. I started that with that before by saying, it's it's not that obvious that the material products are available. And I think that that showed that supply chain is critical for success at most companies.
That makes also that there is nowadays this attention for supply chain. By the way that's really good news and it's good news for supply chain leaders. It's good news for supply chain professionals. But it's also, in that sense, a challenge because now you need to live up to the expectation and now you need to make sure that the attention that you get, that you translated are transferred into investments that are needed to bring your supply chain up to the next level.
But also make sure in the end you are successful. And that means also that supply chain leaders need to go out there. And traditionally in supply chain, many leaders have this inside out type of way of working. And now we need to become really outside in and do it together with the rest of the organization.
With have the commercial organization. With the finance organization. With other functions. With always a customer in mind and to a certain extent, make sure also that they move to a more integrated way of doing supply chain and integrated business planning, etc.
and make also sure that you have the tools and the technology in place to be successful. Definitely. And as you said, you know, having the tools and the priorities in mind. But we see a lot of organizations now upgrading their supply chains from existing advanced systems to even more advanced systems and more data and more planning.
What is your advice to companies to prioritize? Maybe, you know, because companies want to transform the entire organization, but it is a transformative process that may take several years. How do they prioritize where to start and set them up for success from the beginning? Yeah,
because supply chain and the definition of supply chain can be very broad.
And as you mentioned before, you can't conquered the whole supply chain in one big leap, basically. So I always say, you know, start with the foundations and start with what is the core of supply chain. And what I see also in my day to day practice now working with companies that most of the time when you look at challenges that they have in the supply chain, if that's a logistics or it's at the sourcing side, it all boils back to planning and make sure start with your planning and then what I call always the core planning elements, you know, Demand Planning, Supply Planning and Inventory Management.
Make sure that these three key planning elements, you have the foundations in place. And again this is about, to make sure that you have the right processes in place, that you have the right organization, the people with technology, and really important. don't forget about data, Because everything that we do to uplift our supply chain is based on data; data quality, data visibility and data accuracy, etc. , etc. . So coming back to your question, I think start with the core planning elements and depending on where you are in terms of maturity and where your key challenges are, I think most companies should start at the Demand Planning side because really sensing what's going on in your markets is key for the for the success and the performance of your overall and end-to-end Supply Chain.
Definitely. And I think you started with your answer with saying that supply chain is such a broad field. And that really goes into my next question. You know, you said in an interview that you chose supply chain because it's such a broad application in all fields.
Was there a moment you felt that you wanted to pursue another career? And after pursuing it, did you feel that it was the right choice or do you think supply chain is the place where you'd like to be? Yeah, well, in hindsight, you all think maybe
I should have done things differently. But I must say in the end, I'm very, satisfied and and good with where I ended.
That's still in supply chain. But, you know, in my introduction, I mentioned also when I went for a couple of years in I.T as an IP leader, I did some I.T consultancy.
I was also in marketing, spent some time in marketing. And for myself. These were really good steps outside of our supply chain. I learned a lot.
It gave me a lot of insights that now allows me to work at that intersection between supply chain and, let's call it the hand of business, commercial and IT or the technology side of things. So for me, it was really enriching. And I would always advise people, to look at those opportunities and don't stick with where they are today and don't say, oh, you know, I started when I started supply chain. I should stick with supply chain.
Just take the opportunity as they come and jump on that train. And I mean, to me it meant that one time I went in supply chain so I could basically say I started in supply chain and still in supply chain. So probably my home base is supply chain and I'm good with that. Well said.
That's all the questions I have from my side. Thank you so much for taking time out of your day, your week, and also your holidays that are upcoming to be part of these interviews. It was really valuable for me and I hope it's going to be valuable for all our viewers as well. Thank you so much and have a good day.
Thank you. Bye bye.
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