Supply Chains in a PostCOVID World
thank you for inviting me
to speak today about supply chains i
hope this is the beginning of a
conversation we can continue to have
about how to build supply chains
differently in a post-covered world
when i refer to supply chains i’m
talking about people
the farmers the producers the processors
the designers the manufacturers and
distributors
who get products to our homes and to our
shops
as we entered lockdown in march of this
year
i like many parents was faced with
trying to explain to my
five and two-year-old the implications
of the coronavirus on our way of life
i found my way to a book called the
world comes to my place today
it’s about a boy called george whose
sister has
chickenpox and george can’t leave the
house because
he might be infectious too you see the
similarities
in this joyous tale granddad helps
george
cope with boredom and his increasing
sense of
isolation by noticing his
interdependence
room by room item by item toothbrush
bread
chocolate coffee they explore where in
the world it has come from
and the book reminded me of the new
economics foundation’s
interdependence reports in the mid to
late 2000s
through mapping where the things we buy
in the uk come from
it showed we are hyper connected to the
world
and in fact reliant on it to sustain our
way of life
we sort of know this we occasionally
check labels to see where things are
made
but the details of supply chain who does
what when
are largely mysterious to us and perhaps
intentionally so but in 2020 covid
happened
and our interdependence and the inequity
in it was
totally laid bare changing consumption
patterns in countries like the uk
caused supply chains to collapse when
people stopped consuming
lead firms and supply chains cancelled
their orders
news outlets started reporting things
like 50 uh 40 million garment
workers 40 million in the fashion
industry were plunged into immediate
destitution when contracts were
cancelled
and jobs were lost put simply cancelled
contracts
means no work which means no income
which means no food to eat
research has found that there’s been a
70 drop in income
among the urban poor and people living
in urban slums
ids is action research programme on the
worst forms of child labour
i think it’s called clarissa found the
leather sector in dakar
in bangladesh closed most of its leather
processing factories
and this left around 25 000 tannery
workers
at the bottom of the supply chain in
great despair
about their lives the emerging evidence
is directly implicating decisions that
are made in supply chains
to sustainable development goal 1 for no
poverty
sdg2 for zero anger sdg
10 for in reduced inequalities and sdg 3
for health and well-being and at this
point i’m wondering
how the world came to my place today
might be written for a child at the
other end of the supply chain to george
say the child of a bangladeshi textile
worker who just lost their job
and who hasn’t had enough food to eat
today
i wonder if the tale would be more
cautionary
in tone than a joyous celebration of
human connectivity
so i think covid as i think of covid as
a reckoning
for global supply chains a stress test
and they
failed millions of people but they
didn’t have to
so consumer goods company unilever
placed 500 million euros
on the balance sheet to make early
repayments to suppliers
particularly small suppliers so that
they could stay in business
another uk company the coffee and tea
company betties and taylors
committed to honoring all their
long-time long-term contracts
accelerating the flow of money to
suppliers where needed
and they opened up credit lines to
growers
and social lenders the action unilever
and betters and tailors took
to anchor their supply chains for
greater resiliency
and sustainability reminded me of the
role of anchor institutions
in local economies traditionally
anchor institutions have been
not-for-profit organizations
they’re place-based institutions like
universities
healthcare trusts housing associations
with large purchasing power they are
able to pull their
commissioning and their procurement
budgets to irrigate investment
in to local communities and keep it
circulating
and so it doesn’t trickle out
now how do we get more
companies like bettis and taylors and
unilever use
acting like anchor institutions in their
supply chains
well i thought we could mandate that
they do but free market
economics might have something to say
about that
now the reason corporates haven’t
historically acted as anchor
institutions
is that they don’t have what we call
sticky capital
a connection to a place which means they
cannot easily
move operations to another location
which seems more financially viable
so airports and football clubs are
famous exceptions so what can we learn
from betis and taylor’s and unilever
which other organizations
can adopt well when you read about why
betis and taylor’s
used their leadership role within their
supply chain
to provide security to stakeholders they
refer
back to their family business
constitution
and this constitution recognizes their
business does not stand
alone and when you hear alan joe
the current ceo of unilever speaking
he explains the company’s focus on an
integrated approach to sustainability
echoes the girl the goals of its
founders who in 1870
wanted to be a force for good and to
lessen the load of women who bore the
brunt of household chores
in 1870 but when workers went off to
fight in the first world war they kept
people’s jobs open and they continued
paying wages to their families while
they were away from home
so when you look at these two at first
glance we notice they are both
purpose-driven organizations they sort
of have purpose in their soul
which is both heartening and
disappointing at the same time
because it takes a long time to shift
mindsets in less purpose-driven
purpose-driven businesses and we know
that two examples does not a pattern
make
they are outliers but when you look
and listen again you can see what they
know to be true
that their own companies are part of an
interconnected whole
the company revenue benefits from that
interconnectivity
and the decisions key companies make in
supply chains
impact millions of people’s lives deeply
and it’s this acknowledgement and this
disclosure of
impact to their shareholders to their
customers
to each other across the table in the
boardroom
which is what created the need for
active leadership in their supply chains
so once we realize this the question or
the challenge then becomes
how do we get more investors more
customers
more senior executives aware of the
human impact
of their decisions in supply chains and
my suggestion is that we make the
invisible
visible in my current role friday pulse
i’ve been working with a very innovative
statistician nick marks to radically
change the ways
organizations monitor well-being week to
week
quarter to quarter here is an example
of a heat map that one of our clients
might see
across the top at the left hand side
they can see how
happy people are which is our ultimate
measure of
impact and all the other columns to the
right
measure key drivers of a positive
employee experience
so the balance of time people spend at
work versus other aspects of their lives
the extent to which they feel they can
influence decisions in their work
and the quality of their relationships
at work
down the side we have every team every
division every team
every sub team listed and we ask people
about their subjective experiences about
how they feel
and we convert answers on a 100 scale
and this scale is color coded from red
to green
so at a glance a senior leader or a hr
business partner
can see where things are going well and
where things aren’t
they can see the diversity of experience
that exists within their workforce
and they can see where to focus their
energies and efforts to improve things
by bringing people’s experiences to the
foreground
we are shifting the nature of
conversations in businesses
we are changing the focus and we’re
changing the concerns
of companies all over the world we are
making workplaces
even globally distributed workforces of
10 000 people
more human and it’s not hard to imagine
that we can use digital
platforms to account for diversity of
experiences in supply chains
we can organize impact data according to
key actors
in the supply chain like women even
children
we can use sampling methods to capture
the experiences about
actors in the informal sector the
informal economy that sits around supply
chains so they
their experiences can also be included
fundamentally i believe getting supply
chains to acknowledge and disclose their
human impact is a sweet intervention
point
because it creates amplifying feedbacks
across our financial and our legal
sectors
where impact reporting is strengthening
around climate change for example
we see the creation of league tables and
scorecards
that highlight the best and the worst
performing companies
these legal tables work as a behavioral
intervention
because no one wants to be at the bottom
just as no
ceo wants to see red scores on the
friday platform
in the businesses they lead where we
have
impact reporting we organize pension
packages
which invest in those companies that are
promoting and
positively contribute towards the
sustainable development goals
where we have impact reporting we
amplify how the rule of law can be used
to protect worker rights and human
rights
all these ripple effects celebrate and
reinforce the actions of companies
like unilever and betis and taylor to
anchor their supply chains
and they provide the impetus for other
companies to follow suit
just to conclude i have been working in
and around supply chains now for
10 years and this feels like the first
time
that the existence of supply chains as
discrete socioeconomic entities has
truly lodged itself
in our collective consciousness which is
why the time is now
supply chains have become super
structures that affect all our lives
and the future that we want in the
intervening years while waiting for this
to happen
i’ve learned a lot from the way
indigenous people organize their food
systems
they have invested in their relational
systems to form a social safety net
for agriculturalists in northeast india
this looks like exchanges of time
exchanges of seeds and the proceeds of
harvest so that if one family’s crop
fails they’re not left destitute
for a nomadic pastoralist in kenya their
animals
are their family they treat them like
that they are extensions of them
and their way of life true
sustainability and resilience they have
taught me
is not about organizing the world so we
can go on living as we currently do
in countries like the uk it’s about
equal and reciprocal relationships
between people between people and
institutions
and between people and the natural
environment
it’s about providing economic and social
security like betis and taylor’s
and unilever have done it’s about me
looking after you
and you looking after me it’s about what
we invest in each other
as well as what we enjoy from each other
at the end of the world came to my place
today
george goes to bed clutching his globe
and happy
and reassured by his new sense of
connectedness
i’d like to go to bed tonight thinking
that george will wake up tomorrow
or maybe the next day but hopefully one
day before his
sister’s virus clears up
and he says grandad that’s all well and
good but how should i go
to the world today