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COVID-19, political instability, and economic uncertainty all contribute to increasingly common supply chain disruption. So, how can you improve your supply chain agility and give your organization the flexibility and responsiveness to adapt to a more unpredictable, disrupted future?

Alan Todd, Vice President of Leadership Development at Udemy, recently spoke to Steve Tracey, Executive Director at the Center for Supply Chain Research, and Paul Kent, Senior Learning and Development Manager at PepsiCo, to discover how to drive greater supply chain agility.

A shift in mindset to holistically optimize supply chains

Before the pandemic, cost was often the main driver for many businesses when they thought about what it meant to optimize their supply chains. And as Steve explains, rapid change has required organizations to quickly change tack: “Most of the focus over the last couple of decades has been toward supply chain efficiency, managing cost of approving service to our customers. All those things are important, but when you throw in the idea that change happens quickly without warning, you realize that a different mindset needs to take place.”

“The pandemic highlighted the fact that supply chains had abandoned some of the risk and resiliency needed to achieve efficiency and cost-effectiveness,” adds Steve. “Not that you shouldn’t be efficient or cost-effective, you should. But it needs to have risk and resiliency, too.”

This is something Paul had seen at PepsiCo. Despite always putting the consumer first, the company had been swayed to pursue cost efficiency. “We found that at one point, we were probably more focused on cost optimization,” explains Paul. “Our North Star is our consumer and has always been. But we got lost trying to maximize everything — so our supply chain was conflicted.”

“That was a mindset and a cultural change that we had to go through. If our consumers are our North Star, then we need to put agility first and cost second. So if you get two in the same room, agility wins every time,” adds Paul. 

You don’t need to ignore cost efficiency to put agility first. As Steve explains, it’s about ensuring you prioritize your changes, then looking at their cost-optimizing them. “We’re not abandoning cost efficiency,” explains Steve. “We’re saying that if I am better prepared to respond to stimuli, I’ll do that at the optimal cost for that particular change in demand or supply pattern.”

Flexibility, responsiveness, and people

Two conditions are needed to create supply chain agility — flexibility and responsiveness. Flexibility is how well you’re prepared for possible scenarios, and responsiveness is your ability to respond to change to execute your goals. And as Steve explains, there are three parts to creating this flexibility and responsiveness: process, technology, and above all, people.

“The process and tools that enable flexibility have to come from people,” says Steve. “Any organization in the world can go to the bank, borrow money, and buy tools. But it only matters if the processes function better than the competition and meet customers’ needs. And that’s only possible if people are qualified, trained, motivated, and incentivized.”

Putting people at the heart of change increases its chance of success and longevity. But to do this, you must ensure you can equip your people with the right knowledge and tools at every stage of the journey.

“Operating as an agile organization requires commitment to training and education, to the organization’s leadership and the principles of being a supply chain agile leader,” explains Steve. 

We learn better when we learn together

Cohort learning will almost always be more motivational than individual because you have other learners around you to hold you accountable. It’s something Paul discovered when he ran an experiment at PepsiCo. He gave two groups of people the same learning task. The difference — one group had to meet up regularly, and the other didn’t. Just 9% of the individual group returned to the platform regularly versus 87% of the cohort.

But it’s not just motivation that makes cohort learning special. With more people in a cohort, there are more people to learn from — which leads to better quality learning.

“We bring our whole selves to everything, into every learning experience,” says Alan. “And what’s interesting about cohort learning is that diversity of thinking and humanness, when done correctly, change the teacher. The student and the teacher are both transformed.”

“I always tell the students on day one: my job isn’t to prove that I’m smarter than you because I’m not. Do I know things that you don’t know? Yes. Do you know things that I don’t? Yes. And we’re going to learn those two things together,” adds Steve. 

“The phrase we use is ‘flipping the classroom’,” adds Paul. “Students become the teachers. They tell us what the problem is to work. You sit there, you listen, and you consult. And you will answer them as to what strategies we as an organization are implementing.”

Operating as an agile organization requires commitment to training and education, to the organization’s leadership and the principles of being a supply chain agile leader.

Steve Tracey
Executive Director at Center for Supply Chain Research

Three ways to optimize the supply chain through learning

Whether cohort or individual, learning is key to optimizing supply chain agility — and it’s key to bringing your people with you on the journey.

Steve highlights three key parts of creating a cultural shift to enable supply chain agility. He explains the first is managing your workforce: “You need to look at how you, as a leader, manage the organization you lead. So, this means the upstream and downstream, the internal and external partners. And then managing yourself — your commitment to continuous development in an agile culture.”

Second is all about providing learning opportunities for everyone in the workforce to encourage them to adopt a new agile mindset. “We have to develop the capability of upskilling and developing our talent so they can actually do the things we need them to do,” explains Steve.

And the third is to keep this momentum to adapt to change well into the future. “It’s the idea of continuous improvement,” says Steve. “At IBM, they call this a growth mindset. I love that term. This is embracing change as a continuous learning element.”

Talk with our cohort learning experts for more on how to develop agile leaders who are prepared to ferry your company through the challenges of tomorrow.

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Page Last Updated: February 2023