Supply chain pros are laser focused on transparency and resiliency, but there are at least three mega trends that are amplifying their importance: climate change, friend shoring, and environmental, social and governance (ESG) practices.
“Procurement used to worry about a one-dimension problem: spend,” said Jag Lamba, CEO and Founder of Certa, which makes an automation platform for procurement and compliance. “A decade ago, a second dimension came into focus: compliance. Now, there’s a third dimension: impact. Fundamentally, everyone has a more complex supply chain.”
By understanding these trends, OEMs may be better able to achieve the visibility and flexibility they need in their supply chains by touting their benefits across business units. “We are seeing a shift in how we think about procurement. It was always focused on cost savings but now it has shifted to continuity of supply as number one objective,” said Bindiya Vakil, CEO of Resilinc, a supplier of supply chain risk management solutions.
For example, transparency is not limited to just the suppliers on your BOM. For the past few years, the pandemic has been blamed as a major contributor of supply chain disruption. Behind the scenes, though, the bigger culprit may be climate change. Extreme weather, including floods, freezes, storms, and wildfires, as well as climate realities including rising sea levels, are passing along climate-induced effects to ports, highways and factories all over the world.