Navigating Supply Chain Risks with SustainAgility – Building Resilience for Uncertain times
@ the IERP® Global Conference, August 2023
Sandeep Joshi, Senior Director of consulting and training company Massivue, presented this session. Massivue focuses on adaptive value engineering, sustainability and digital reinvention services. Sandeep’s presentation introduced the concept of SustainAgility, a set of core values and areas which combine sustainability and agility practices and principles, which help individuals, teams, leaders and enterprises navigate the increasingly volatile, uncertain, complex, ambiguous (VUCA) world. The presentation covered a new perspective of supply chain risks, and how to apply SustainAgility, among other matters.
“There have been changes in the word ‘agile’ in the last few years, and how it has been interpreted,” Sandeep said. “We are now looking at what we can do from a risk management and supply chain perspective.” This necessitates going beyond sustainability as we learn from what we have been doing, and apply this to improve things. The future is uncertain; supply chain disruptions are generally unforeseen but increasing. Various events are shaping companies, businesses and societies – but any disruption to the supply chain is a costly event. If supply chain disruptions are not contained, businesses may find themselves losing almost 50% of their profits over the years.
What must be urgently considered now is what kind of roadmap is needed, what kind of action to take, and what individuals, on their own, can do. The risk surface is constantly evolving; risks must be managed now so that disruption ahead can be managed. “Some of the most significant disruptions happened because we omitted or ignored the warning signs,” he pointed out. “Technology will evolve, and we will venture into new business models. There will be no end to unknown risks. If you ignore small items, they become big.” He urged risk practitioners to take note of where action was required, and who was acting on it.
A systematic, structured approach that acknowledges both known unknowns and unknown unknowns is a prerequisite – and this is where SustainAgility comes in. We live in a hyper-connected world, and as long as we remain in business, we have no option but to connect – which means collaboration with other entities. Business tools like value stream mapping, process mapping, and flow charts, for instance, create work, not value. “Businesses fail because they fail to collaborate, or they do not want to collaborate,” he said. “Our job is to create value, not more work. Views are not important, actions are. The future should be nimble, sustainable, technological, and growth-oriented.
Actions drive outcomes and the bottom line, and business demands action but business today is more focused on work, not value, which often causes them to lose sight of value. It has been estimated that about US$1.7 trillion in transformation projects were unsuccessful in 2022, and about 98% of businesses failed. Better ways of working are imperative; not acting on this makes business a part of the problem, and creates more issues that need to be managed. “We need to be responsible in our production and use of resources,” he said. “If you do just traditional transformation, like digital transformation for example, after the fifth or sixth quarter, you will see a general decline.”
This is when people start to lose hope and feel tired, fatigued and frustrated. But when the concept of SustainAgility is applied, he said continuous growth could be attained, not just in numbers but in terms of employee happiness, customer satisfaction, quality change, and work-life balance, among other things. “When we talk about SustainAgility, it combines sustainability and agility and helps deliver outcomes that are better for people, planet and enterprise,” he said. SustainAgility can be applied to all types of companies, from start-ups to enterprises, and caters for hybrid work environments. It works across the technology, business, and function and operations units of the organisation.
Its five focus areas are Sustainable Finance, Sustainable Business, Sustainable IT, Sustainable Leadership, and Sustainable Product Management. Sustainable Finance covers financial reinvention and reimaging of financial products, embedded with a sustainability view. Sustainable Business covers business model reinventions that can deliver sustainable outcomes at an accelerated pace. Sustainable IT covers the integration of sustainability across the IT lifecycle. Sustainable Leadership covers the intervention of continuous learning and mind shifts towards sustainable success. Sustainable Product Management covers the integration of core values across the product lifecycle.
Detailing the key shifts required to develop supply chain SustainAgility, he said that Sustainable Finance needed to move from operational excellence to a collective commercial ecosystem. Under Sustainable Business, sustainability commitments need to be transformed into sustainable outcomes. Sustainable Product Management needs real-time analytics to attain real-time decisions and execution. Sustainable Leadership, instead of being location-centric in design, should move to a human-centric culture. With Sustainable IT, stagnant IT programmes must make the shift to continuous IT delivery.
Joshi also outlined a SustainAgility Roadmap that began with reframing organisational values with reference to the SustainAgility Core Values, then moving on to align strategic shifts and focus area goals. This should be followed by the rollout of continuous delivery, with inspection and adapting activities. An executive squad should be established when the organisation starts to reframe its values. Aligning strategic shifts and focus area goals will need a re-prioritising of programmes, and the streamlining of the supply chain service menu. Recalibrating and risk-adjusting global supply networks will align with the risks and opportunities of suppliers, partners and vendors.
ESG and sustainability commitments can be reviewed and integrated accordingly. Besides real-time decision and execution, continuous delivery will include enablement and training, the development of a human-centric culture, and leadership enablement. Team engagement will be embedded; the use of automation and AI will be increased, as will governance. Refined governance will be applied to measure and track metrics. The executive squad will play an inspect-and-adapt role, reviewing decision logs, risks and opportunities, metrics and business value trends. Ideally, this review, as well as the entire process, must be done in real-time and be ongoing in tandem with operations.