Highlights from this week’s IGD Supply Chain Summit

Date : 17 October 2019

The latest instalment of IGD’s annual supply chain event took place this week. This was my fourth Supply Chain Summit and it was another great day! Here’s a recap in case you missed it.

Customer-centric – the business imperative

IGD’s CEO, Susan Barratt, opened on the main stage, setting the scene by delivering a few clear messages. The one that resonated with me most is “You must shape yourself for the future instead of resisting it.” To me, that’s all about being positive about the opportunities the future holds and proactive in going after them as individuals, functions and businesses.

We hear so often that we are living in unprecedented times. It’s hard to argue with that statement and nothing epitomises this more than Brexit. But it’s not the only challenge. There are many other, equally important issues that need our focus. Some of them are easy to grasp and the answers seem within reach, while others seem amorphous and overwhelming – like climate change. To ensure the necessary headspace, Brexit was ring-fenced with a facilitated session bringing delegates together to share experiences, identify and confirm strategies. This seemed to do the trick and with Brexit “parked”, the event moved on…

David Shaw, Northern Europe Supply Chain Director, Kraft Heinz, was next up. David zeroed in on people – consumers, shoppers, supply chain practitioners and the collective “we”, starting with a simple message: “Bad relationships limit our ability to cooperate.” Understanding each other’s  motivations better  enables improvement. David demonstrated what this philosophy has helped him, and his teams achieve – step-change improvements in Advantage Group survey scores. David used some interesting models to reinforce his point. This helped demystify the approach, providing a framework people can follow to deepen their business relationships. Check out these videos from David for more on this.

Tom Szaky, Founder and CEO of Terracycle took the stage next. He introduced Terracycle and the Loop platform it has developed and launched. I found Tom’s presentation incredibly powerful for two key reasons:

  1. He has a compelling message that almost everyone can relate to: we consume and waste too much
  2. He has demonstrated how progress can be achieved through engagement with those most likely to facilitate change – big FMCG and retail businesses

Almost everything is recyclable. It’s really a question of whether it’s financially viable to do so. As such, a lot of what is consumed is not recycled and is typically downcycled – triggering further consumption. This is an important concept – recycling alone cannot solve this problem. Something different is needed and Tom hopes Loop is the answer. It’s a platform that enables manufacturers’ reuse of packaging by offering a convenient and circular solution to consumers.

Tom described how the disposable culture we see today came to be, supported by a picture from the past in which people were celebrating the idea of disposability. Latching onto the convenience we’ve become accustomed to is a major part of how Loop aims to succeed. The success of the platform will be directly influenced by how well it can complement the existing behaviours of consumers. In addition, Tom said durable design is enabling new features which are more desirable to consumers than traditional options. Speaking about how businesses can develop packaging that is compatible with the platform, Tom used an example from the drinks industry to suggest that some of the answers lie in the past and are simpler than we think…

Professor Tim Benton of Leeds University and Chatham House had some stark messages on the state of food supply chains. His main point was that “business as usual” is unsustainable. He went on to say that while circularity, delivered through programmes like Loop, is a move in the right direction, they will not be enough. Changes in weather, which are happening much faster than models have predicted, are highly likely to interrupt the supply of materials and goods in the global supply chain. Prof. Tim described a food system that is not only damaging the planet but is actually making us unwell – producing vast quantities of food that is not nutritious. He presented a series of interlinked vicious cycles, which in isolation represent huge challenges, but when seen together left me wondering where to start... Prof. Tim had a clear message – diets must change if we are to address the challenges we face. This will become more important as land currently used to grow crops or for pasture will be needed to plant trees – the only viable way to currently remove excess carbon from the atmosphere at scale.

Source: Diets and disrupters – BAU supply chains are unsustainable, Tim Benton, IGD Supply Chain Summit, 2019

 

We covered some of what Prof. Tim spoke about at this year’s Summit in our series, Vulnerabilities in the Global Supply Chain, take a look at part two focusing on environment and resources.

Breakouts

The conference then broke into smaller breakout sessions, focussing on IGD’s four aspects of a successful supply chain – Customer-centric, Powered by people, Resilient and responsive and Transformed by technology. These sessions were supported by an array of presenters from industry-leading businesses, including Nestle, CHEP, Mars Wrigley UK, Wincanton and Highland Spring Group.

Next up, there were five retailer breakouts from Asda, Co-op, Morrisons, Sainsbury’s and Tesco in which delegates got to hear about what each of the retailers is working on.

Customer centric supply chain strategies

The afternoon plenary session began with a Q&A with Andrew Higginson, Chairman, Morrisons and current IGD President. Andrew described the UK retail sector as being as advanced as anywhere in the world, with consumers incredibly well served.  But he noted several high-level challenges influencing the fortunes of the industry, including the competitiveness of the market, the desire for increased convenience and the potential for higher labour costs in future. Andrew finished by describing the UK market as attractive to disruptors without being a soft target, noting that if disruptors can make it in the UK, they can make it anywhere.

Simon Browne, Managing Director, Burton’s Biscuit Company, was next on the main stage. He focused on how supply chain is an enterprise value creation function and stressed the need to be highly commercial in our outlook to deliver against this goal. Simon stressed that no one function has the potential for greater impact on P&L than supply chain. We agree with this assessment and Simon cited IGD’s recent work on the attributes that will define success, presenting the following statistics:

Source: IGD Supply Chain Leaders survey, 2019

 

As the day drew towards its conclusion, Richard Lamb, Supply Chain Transformation Director, Tesco, spoke about the business’s customer-centric transformation. Richard focused on the skills it’s acquired and developed to improve its supply chain systems, which he described as “world-class” and using “real-time data”. Several tangible examples, from availability measures, to waste and optimised counting, were highlighted and the importance of science, tech, engineering and maths was called out. This supports the “development of processes driven by data, with limited intervention from colleagues who bring the final 5%.”

Last up on the main stage was Daniel Buczkowski, Head of Expansion, Uber Freight Europe. The man tasked with bringing Uber Freight’s proposition to Europe started by describing how Uber has evolved into new spaces, including freight. The rationale seems strong, with Uber identifying a global logistics market worth $8trillion as ripe for disruption. The European trucking market is worth $500billion and Uber’s proposition seems strong, with several nascent and existing challenges, including driver availability and underutilisation requiring answers. Daniel described several benefits for both “shippers” and “carriers”, including significantly reduced payment windows, facility rating and reduced administration – everything happens in the app! We explored Uber Freight’s expansion into Europe in this recent blog – check it out.

Final thoughts

And that was it! This year’s Supply Chain Summit left me in no doubt that Brexit is just one of the challenges the industry is grappling with. When Brexit is done, others will remain and it’s clear people are motivated to get on and get involved in addressing challenges including climate change, packaging, omnichannel and convenience. There was certainly no shortage of new ideas on display this year, but the key message I took away is the pressing need to think big. That means stepping outside of the day job, scanning the horizon, being open to new ideas and thinking, and finally, finding ways to work together to deliver meaningful change.

Supply chain Analysis can help you on this journey. It provides best practice, inspiration and insight to develop your capability, improving your performance today and helping you prepare for tomorrow. Get in touch for more information.

Christopher Irish

Head of Insight – Supply Chain

[email protected]

Chris Irish

Chris Irish

Head of Insight - Supply Chain

We round-up the major supply chain themes that have unfolded and the insights we've produced in 2019 Q3.

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