This shock has highlighted the future of supply chains should be transparent, automated and data driven, according to Hari Janakiraman, Head of Industry & Innovation, Transaction Banking at ANZ.
“I’m an optimist when it comes to supply chains. They are adaptable, and people will find a way.” – Hari Janakiraman
And despite the multiple ongoing crises rewriting the rules of global trade, participants should be optimistic that supply chains - and the businesses which rely on them - will find a way to make it through, he believes.
“Future supply chains will be transparent, connected, self-orchestrated, data-driven eco-systems,” Janakiraman says.
“What is going to be driving this are technologies like cloud computing, which helps a lot of automation, machine learning and artificial intelligence with a bit of blockchain, robotic process automation and 3D printing thrown in, too.
“I’m an optimist when it comes to supply chains. They are adaptable and people will find a way. Supply chains find a way.”
Janakiraman made the comments as part of a panel discussion focused on ANZ’s recently released The Future of the Global Supply Chain: Resilient, Sustainable, Transparent report.
The report explores how global supply chains are experiencing the transformative effect of the COVID-19 pandemic plus a range of secular forces including geopolitics, technological advances and increasing consumer expectations.
The trick to ‘finding a way’ consists of two elements, according to Janakiraman - one is building resilience; and the other is deep knowledge of each player in your supply chains.
“And I'm not just talking about who you are, or who your suppliers are, but much deeper than that,” he said. “[It’s] who your suppliers are, but who their suppliers are, and their supplier, and so on and so forth.”
According to Amcor Pty Ltd’s Treasurer Asia Pacific Anthony Avitabile, building that resilience played a key part in the company’s approach to supply chains during the COVID-19 crisis – resulting in proactive steps to ensure the group had actionable alternatives in place.
“[There were] times during the pandemic where things got very tight and we had to work really closely with both our customers and our suppliers to ensure our supply chains [met] the needs of our customers,” Avitabile said.
“Our supply chains have become very nimble and that has put us in good stead. We've been ready and willing to have backup suppliers.”
Janakiraman said recent crises, including in Europe, which impacted existing trade routes and products highlighted the need for businesses around the world to prepare for this possibility, however remote. There is technology which can help model for this, he said, and it is already in use in some sectors.
“Machine learning and artificial intelligence techniques [can really help businesses] understand various scenarios in which your supply chain can be impacted, and what and how you can react to those scenarios,” Janakiraman said.
Geopolitical tensions had been impacting supply chains for several years but were supercharged by COVID-19, ANZ Head of Geopolitical Risk Cameron Mitchell told the panel – particularly as governments around the world consider the national security implications of globalised supply chains.
“I do think this shapes the way in which supply chains are shifting,” he said.
“These dynamics are really contributing to more statism and industrial policy in the developed economies with a focus on more sovereign manufacturing capability.
“This has brought on the buzzwords of ‘offshoring’, ‘nearshoring’ and ‘friend-shoring’, terms I'm sure we're going to be hearing a lot more about in the coming years.”
Mitchell said the development of these practices showed the new geopolitical order meant countries were “looking to focus sensitive supply chains around trusted partners - or no partners at all”.
“I don't see this trend changing for the foreseeable future,” he said.
The conversation also touched on the growth of sustainability in supply chains and how consumers seeking transparency and are playing a growing role in encouraging companies to embrace sustainable business practices.
Shane White is Institutional Content Manager at ANZ
You can read The Future of the Global Supply Chain: Resilient, Sustainable, Transparent to find out more.
This article was originally published on ANZ’s Institutional Insights website