This is the second of a multi-part discussion with Supply Chain Management expert Steve Bass, current Director of Supply Chain at ClearStream Energy. This week we explore some of the challenges occurring as a result of the downturn in commodity prices and the shift in thinking that is starting to occur in the discipline.
You can read part one of our conversation here.
Payload: Let’s talk about change in Supply Chain in the context of the last two years of low commodity prices. What’s your view of things?
Steve Bass: Given the tough market conditions, there is a dominance of ‘survival’ tactical thinking taking place, rather than ‘prospering’ or business development thinking. It’s quite an austere picture in some places.
Payload: Does that create a paralyzing effect when it comes to change?
Bass: The danger is that we don’t really change. Companies hunker down, cut costs, get rid of people and assets, shrink office space. On one hand, these are the actions that will get you closer to right sizing the corporation for the lower commodity cost environment. On the other hand, the dramatic nature of these changes can be devastating to those who are displaced as well as those who are left behind. Survive and get through. But we must figure out how to change and adapt to the new reality, and move forward.
Payload: Some of that short term cost-cutting is happening. But despite all the bad news stories, there’s also been progress, hasn’t there?
Bass: There are some shifts taking place. There’s a collection of leaders who are stepping up. These leaders are inspiring people to a higher level of performance, developing skills and capabilities, pushing technical innovation as well as business process innovation; especially in market facing functions like Supply Chain.
Payload: This is somewhat of a change, isn’t it?
Bass: In the recent past the innovative ideas and positive business change in business functions like Supply Chain came as much from a desire for transactional efficiency. This felt more like a ground up change. But now we have senior executives leading change from the front in a way that seeks to tap into the talents and ideas in the external marketplace and from within their organizations – all towards a more strategic change. That’s very encouraging!
Payload: What kinds of impacts has the discipline seen?
Bass: We’ve seen impressive results delivering projects on time, keeping to budget and controlling costs, and in the market research our people have done. Just about all of the top players have a story to tell about the successes in their Supply Chains. But we still need to find more effective ways of translating data and information to strategies and plans – and moving beyond the good old spreadsheet. That’s the opportunity in front of us. Not just creating great results periodically. Creating them consistently.
Payload: Can you expand on that?
Bass: By embracing technology, and all it affords, you can produce great Supply Chain results more consistently. You can even achieve results that you weren’t initially pursuing because the right technology creates an entirely new radar of opportunity. The level of opportunity in the past has been ‘can we get this project through on budget?’ If you did that, it was considered a hallelujah moment.
Payload: With the changes in the market, do we need to go beyond that?
Bass: In this new low commodity environment and with the resulting pressures to innovate, we need to crunch through large amounts of data to identify new solutions. What is needed now are the skills to interpret the data patterns and the ability to yield them into solutions. This is the classic challenge to harmonize people, process and technology.
Payload: It seems like change in Supply Chain that leads to consistent results not just for a few companies but for the entire sector – that could be the real prize.
Bass: It’s about the collective. It’s about industry excellence. How can we become more strategic? How can we engage with data patterns? Where could all of this take us?
In part three of our discussion, we’ll look towards the future of Supply Chain and how we’ll get there.
Steve Bass is the Director of Supply Chain at ClearStream Energy Services. He has over 25 years of experience in Supply Chain for organizations in Canada and the United Kingdom, including senior roles for Devon Energy, ATCO Structures & Logistics, Enerflex and Calor Gas. Steve’s work has taken him across Europe and beyond to India, Brazil and the Philippines. He has an MBA in Strategy and Procurement Management from Birmingham University and speaks regularly on Supply Chain issues, including recent talks at the Canadian Energy Supply Chain Forum and the Canadian Institute’s Conference on Supply Chain Management.