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A star role for supply chain? Maria Villablanca on antifragility, ecosystem thinking, and a CEO role for SC leaders
Stuck ships, geopolitical turmoil, pandemic shutdowns, and climate disruptions: It’s no wonder supply chain insights have risen to the top of enterprises’ must-have lists as industry accelerates efforts to secure total visibility over the processes that drive supply chains.
“For the last few years, this cocktail of crises has had the effect of making supply chains go mainstream. Suddenly, the supply chain is not obscure,” says Maria Villablanca, one of the world’s leading supply chain experts and co-founder and CEO of Future Insights Network. Known for her unfiltered opinions on industry transformation, Villablanca spotlights the experiences of the global supply chain community as the host of Transform Talks Podcast and the owner of Supply Chain TV+. She recently joined Celonis chief evangelist Lars Reinkemeyer for an exclusive webinar, where she shared her strategies for supply chain planning, building resilience, and more.
Watch the recording: Mind the Gap: Strategies to bridge supply chain planning and execution
Per Villablanca, traditional methods for transforming supply chains have now proven too piecemeal to keep costs, cash, and the service levels in balance with pre-2020s methods.
So what’s the roadmap to supply chain’s future? From Villablanca’s webinar, six themes emerge:
1. The gap between planning and execution has widened significantly.
“Supply chainers, as I like to say, kept the world moving during a time of great uncertainty. We rose to the occasion,” says Villablanca.
And compared to 2021, she saysthe global supply chain pressure index is looking more positive, but it’s far from clear sailing.
"There’s still a lot of pressure all at once," she explains, "The gap between planning and execution has widened significantly."
For Villablanca—whose supply chain experience dates back to the 1990s when the field was known as sourcing, procurement, and logistics—accurate planning and forecasting mean more today than ever.
"The supply chain of the past happened in the back office," said Villablanca. “Back then, the gap between supply chain planning and execution was actually quite small…Do you remember what it was like to be able to plan your supply chain by just looking at your processes, data, and systems, from five years ago, or even last year? That’s no longer the case, we are not living in that kind of world now…normal is not coming back."
2. Your supply chain is an ecosystem, tied together by processes.
As challenges to the supply chain continue to surface overlooked vulnerabilities, Villablanca says leaders need to embrace ecosystem thinking and evaluate interconnected processes. That means the emerging transformation of the supply chain is built on multiple relationships, built on suppliers, built on purpose-driven collaboration.
She cautioned that we need to update how we picture and describe supply chains.
"The supply chain is no longer linear. It’s a living, breathing ecosystem of people, of disparate technologies and in some cases of outdated processes that are all linked together by layers and layers of messy data,” said Villablanca. "Supply chain leaders need to look at their environment in a very different way than how they did in the past."
That means efforts to transform, adapt, and build resiliency can falter when they fail to look at the very thing supply chains are made of: processes. In other words, we’re missing a shared understanding of how our supply chain actually runs end-to-end.
“I was talking to people at Celonis who said the supply chain is one mega-process made up of lots of connected micro-processes that don't play well together across departments that all speak their own language,” said Villablanca. “That resonated with me, that resonated with a lot of conversations I’m having in my work. You need to find a way to work that syncs transformation across multiple areas of the enterprise to drive business value.”
“Strong processes help people make better decisions. Yet that’s very different from how most businesses now operate. There’s a huge disconnect between departments, an approach that operates in silos and pockets,” says Villablanca. “When we look at keys to effective execution – it’s to gain real time visibility of all systems and processes to help people make better decisions.”
3. Resiliency is no longer enough. Your supply chain needs anti-fragility.
Supply chains could also yet become antifragile, made stronger even against disorder, says Villablanca—but only if we take big picture steps now to address the growing, cross-industry gap between planning and execution.
“Let’s call it synchronized transformation,” says Villablanca, “I am talking about the wonky way that businesses will be able to become agile or ‘antifragile.’”
“Antifragility” is a word Villablanca uses to describe the highest functioning supply chains. “Antifragility is moving beyond resilience. A resilient supply chain resists shocks and stays the same. An antifragile supply chain actually gets better as it performs against shocks,” says Villablanca. “In a world of disruption, it’s no longer enough to build resilient supply chains.”
Instead, the antifragile supply chain Villablanca envisions uses each crisis to learn and adapt, bolstering itself against similar issues in the future (and gaining a competitive advantage in doing so). For example, if you work with a supplier who’s struggling to get you a material you need, a resilient approach would just involve a one-time solution, then back to business as usual.
An antifragile approach, on the other hand, would have your enterprise vetting a portfolio of alternate suppliers, reviewing and revising your planning strategies, figuring out how to better share materials between your locations, and investigating ways to use the material in question as economically as possible — improving your supply chain as you problem-solve.
4. More scope, more strategy: Supply chain leaders could reshape the CEO seat.
The global supply disruptions of the 2020s have also shifted the demands and roles placed on the Chief Supply Chain Officer (CSCO).
“Today’s CSCO executive office has to keep an eye on the future, on the current landscape, and also how the supply chain affects the overall business in real time,” says Villablanca.
“Right now, many supply chain leaders lack the established processes and ability to make upstream changes,” says Villablanca. “We saw the supply chain get a seat at the table during the pandemic. Now we need to keep it. To me, we need to think bigger. We need to see more supply chain leaders pursuing the CEO position.”
That’s why the CSCO is well-positioned to make the leap to CEO, adds Villabalanca.
"No one is better positioned for future CEO than supply chain leaders because they so thoroughly understand the relationships and processes that make the business work,” says Villablanca. “When I talk about a Chief Supply Chain Officer of the future, this could be a CEO who has one eye on geopolitics, economics; is a technologist; a collaborative people person; an operational thinker; and is financially driven.”
As supply chain leaders continue to adapt their roles — running what-if scenarios across end-to-end operations, taking up strategic leadership, etc. — Villablanca emphasizes that during this moment of global shocks, the supply chain can realize its strategic advantage.
"It’s not just about holding inventory, saving costs, or freeing up working capital. I think supply chain is the business."
5. Center supply chain operations to achieve both business and ESG goals.
As supply chains are reimagined into ecosystems, some companies are centering supply chains to succeed in business operations and advance sustainability goals.
Villablanca cites Unilever as a business strategy lesson in centering supply chain functions.
"Look at how Unilever decided to take the word ‘supply chain’ out of how they run their business. Instead, they have created a business operations group that is central to running the enterprise. They have placed business operations at the center of everything they do. Through the chief business operations officer, there is a path for the supply chain to be at the front and center of every organization,” says Villablanca.
Plus, integrating supply chain processes into core business strategy pays off across crucial ESG outcomes.
"We also know that supply chains are some of the world’s biggest polluters through Scope 3 emissions,” says Villablanca. “We know we need to focus on sustainability and ESG. We are going to be seeing a reinvention of supply chains from a linear model to a focus on the multiple processes of the ecosystem model, a mindset shift that values ecosystem thinking.”
6. The AI-powered supply chain builds resilience and attracts talent.
An antifragile supply chain with ecosystem thinking can also win the war for talent. “Let’s not forget we are facing huge skills gaps for digitally strategic talent. If you don't have the right tech, the right processes, you are not going to attract this type of talent,” says Villablanca. “I think we need to attract critically diverse thinkers from multiple backgrounds to be able to solve problems we don’t even see coming today.”
As enterprises deploy AI across initial use cases in demand planning, procurement, logistics, and process standardization, supply chain functions that embrace technology and change can attract the high-level digital talent companies need to operationalize AI.
"In the supply chain, you may already be using AI without realizing it,” says Villablanca. “A lot of systems that people use in planning are already using AI as well as in data, supply chain execution solutions, shipping, transportation, they are also underpinned by AI."
AI is also proving itself to be a powerful agent in assessing ESG goals and spotting regulatory compliance gaps across the supply chain. “There are abundant opportunities for AI in supply chain today for tracking carbon footprints and looking at source materials,” says Villablanca. Across her work with other supply chain experts and technologists, she’s also seen, “ . . . uses of AI being able to detect forced labor in supply chains.”
AI is well-suited for spotting overlooked risks that lie deep within supply chains, too. “For example, AI can help you see if your supplier’s supplier, deep within the fourth tier, is having some issues that will impact you within six months’ time,” says Villablanca. “I have also seen AI assess the impact of regulations coming to place right now and assist with financial records used in sustainability trackers. This is something AI is brilliant at.”
Connect your processes. Balance your supply chain, finally.
“We live in an exciting time,” she adds. “The volatility of the past few years, alongside the visibility of the supply chain profession to rise above the challenges, poses a unique opportunity for supply chain leaders to also emerge as leaders of the business,” adds Villablanca.
“Crises and disruptions are fundamental opportunities to accelerate transformation. A lot of the past few years have been unimaginable. How we accelerate this transformation is how we weather the next few years effectively,” she says. “The businesses of the future will live or die by the strength of their supply chains. And I mean that. If you work in the supply chain, you have an opportunity to change the world.”
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