Five Megatrends Influencing Supply Chain Risk And Resilience with Bindiya Vakil

Join the conversation with the visionary Bindiya Vakil, CEO of Resilinc, as we unpack the transformative power of AI in risk management, reshaping the resilience of global supply chains. Bindiya talks about five megatrends shaping global supply chains:  geopolitics, climate change, cyber risks, sustainability  and labour disruptions.

From the eye of the storm post-Hurricane Katrina to the forefront of supply chain innovation, Bindiya shares her story of revolutionizing Cisco's approach to crisis management and the seismic shift towards prioritizing data to bolster supply chain defences. In this engaging dialogue, we dissect how the intertwining of supplier transparency, trust, and cutting-edge technology constructs a more robust and responsive supply chain network, essential in today's unpredictable business climate.

As we navigate the complex terrains of geopolitical instability, climate-induced disruptions, and the looming shadow of cybersecurity threats, our discussion takes a deep dive into the strategies reshaping the supply chain world. Bindiya and I explore the imperative of ally shoring, ESG compliance, UFLPA, German Diligence Act, and the dire need for innovation amidst the labour crisis. We also celebrate the unsung heroes of revenue generation—supply chain leaders—who play a pivotal role in driving business success. For anyone looking to understand the intricate dance of supply and demand, technology, and human expertise, this episode offers invaluable insights into the cogs that keep the global business engine running smoothly.

You can find out more about Resilinc by going to their website Resilinc.com. 

Chapters

• 0:00 AI in Risk Management for Supply Chain
• 10:16 Supply Chain Crisis
• 11:49 Cyberspace Vulnerabilities
• 13:41 Sustainability ESG Regulations
• 15:14 Labor Disruptions
• 20:12 Long Term Partnerships And Trust
• 22:53 The Next Three to Five Years
• 24:37 Supply Chain and Revenue Generation

Transcript

Tony Hines: 0:00

Hi, tony Hines. Here you're listening to the Chain Reaction Podcast all about supply chain advantage. Well, we've got a great show for you today. I'm in conversation with Bindiya Vakil and she's the CEO of Resilinc, and you're going to learn all about Resilinc and some of the great things that they're doing. So I hope you enjoy the show.

Tony Hines: 0:35

Well, with me today I've got Bindiya Vakil, and Bindiya is the CEO and founder of Resilinc and is an award-winning expert in supply chain risk management. She was crowned supply and demand chain executive inaugural woman of the year in 2020. And Bindi's career spans 20 years. She holds a master's degree in supply chain management from MIT and an MBA in finance. Bindiya continues to lead the market in risk intelligence and mitigation and is credited with bringing supply chain risk management into the mainstream.

Tony Hines: 1:11

You can find out all about Resilinc by going to the website, and I'll put the link in the notes to the episode, but right now we're going to learn about Bindiya's experience and how she come to set up Resilinc in the first place. So stick around and find out more Now. Your company is really interesting, isn't it? I find it fascinating your idea and how you come to set it up, and I'd like you to tell us a little bit about your background and how you come to set up the whole business before we get into the detail of the mega trends and everything going on in the world today.

Bindiya Vikal CEO Resilinc: 1:52

Yeah, absolutely. I come from the world of supply chain management, sourcing and procurement in the high tech industry. I worked at companies like Cisco, Flextronics very much an electronics manufacturing, complex manufacturing background in semiconductor and high tech and so I always felt like I was on the you know, playing that game called whack-a-mole right, when you kind of put some crisis pops up and you are chasing, always reacting to it. And so until I went to and I didn't find masters in supply chain at MIT where I really got immersed in the whole space of supply chain risk and resiliency in 2005. And so when I did that, I came back to Cisco and Cisco.

Bindiya Vikal CEO Resilinc: 2:42

At the time, you know, Hurricane Katrina had just happened and we were starting a really interesting team on really mapping out our supply chain, because we realized that we don't really know where our parts came from around the world, especially because a lot of our procurement had been outsourced.

Bindiya Vikal CEO Resilinc: 3:03

And so I spent three, four years after that mapping it out for our 1500 suppliers, our 44,000 plus parts to about 35 countries that were involved in our manufacturing across the world, multiple tiers deep, and I saw us go from being very reactive to actually being able to anticipate where the next disruption might come from, sometimes months ahead of time. And then we had 10 things we can do when you know it early to bypass the worst impact. And I said boy, every company in the world today, whether they realize it or not, they have a global supply chain, but they look for expensive mitigation strategies like holding inventory or reshoring factories when data can make a massive financial impact to improving their resilience. But the challenge was getting to that data. It requires a lot of influencing of suppliers, collaboration, building trust, and I felt like I had learned a lot about how to do it successfully, and so I started Resilinc to help other companies kind of embrace this type of practice.

Tony Hines: 4:14

Well that's fantastic, isn't it? And obviously it kind of lowers the risk for everybody, doesn't it, in the supply chain Once you've got the data, and replacing inventory with data is a really good idea.

Bindiya Vikal CEO Resilinc: 4:26

Exactly because, really, I mean we say, oh yeah, let's ditch JIT. And now we'll suddenly look at, just in case, inventory. But that's not even economically viable. And now you know, interest rates are so high that companies can't afford to hold those kinds of inventories. So data, on the other hand, and influencing suppliers, building strong partnerships, creating that environment of transparency and trust, that's like simple change in how we operate on a daily basis and there's no incremental cost to it. That is hundreds of millions of dollars and it gets you resiliency for just about any type of disruption, Whether it's a pandemic. This year there are five earthquakes, 10 hurricanes, some factory fires thrown in the middle you know, transportation or logistics issues. I mean, there are, you know, 50 different ways in which supply chains get disrupted every year. So inventory in this place might not help with the disruption in that place, right?

Bindiya Vikal CEO Resilinc: 5:30

So it's not a good strategy.

Tony Hines: 5:32

Yeah, I mean, that's it, isn't it. It's as you say. There's always something in supply chains If it's not one thing, it's something else. These things just jump about, and once we've got the experience of doing something, we're able to do, you know, we'll learn from the past, don't we? And we bring our reflexive attitude into the situation. So that's fantastic, you know.

Bindiya Vikal CEO Resilinc: 5:53

Yeah, you said is really important. Actually, tony, it's the muscle memory right Of 10 factory fires. Your team knows where to go, how to engage with suppliers, who's doing what, what tools are in place. The early warning system has been implemented so that when the big disruption happens, you're not suddenly reacting and scrambling on that one. There's a machine that's just executing in a very structured way.

Tony Hines: 6:21

That's right. That's right. That brings me to something else thinking about machines in a structured way AI. How is AI changing the supply chain? Can you tell us something about that, Bindiya?

Bindiya Vikal CEO Resilinc: 6:31

It's very exciting. I mean, you know, the way I would characterize it is that the world of supply chains is. You see that acceleration in the frequency with which we get hit by supply chain disruptions. Right A few years ago we might alert our customers about 70, 80 extreme weather type events a year. Last year it was more than 300, 400. So it just we're seeing across the board disruptions are increasing. The type and number of disruptions and countries all are increasing.

Bindiya Vikal CEO Resilinc: 7:07

So we have to have access to new technologies, data and the ability to process all of that quickly and get to answers without having to put a lot of humans in the process to do it all manually. By the way, supply chains don't all nicely operate in the English language. We have many, many languages. In fact, Resilinc our early warning system processes information across 100 languages Wow, suppliers operate factories in 200 countries on our platform. So all this information, any human team working globally simply cannot operate that quickly, whereas AI brings all that natural language processing power into tape Once you put all the data into a really strong NLP system. And now, with all the new technology, with chat, gpt and large language models, the ability to synthesize it, get to answers, get to action is within minutes.

Tony Hines: 8:12

It's exciting, isn't it? I mean, it does open doors for everybody. I think you know we can do things faster. We can that faster, leaner, smarter supply chain is within grasp, isn't it really .

Bindiya Vikal CEO Resilinc: 8:28

Very much so, very much so and I think the other challenge is you know, a lot of times we work as humans across different time zones. People are kind of working, some are from home, working from office. We're all over the place, sometimes we're traveling, but the AI is always watching. It's always working 24-7, non-stop, and so I think there are so many things in supply chain that require that continuous monitoring and continuous action. So I think it really gives us. I think if we have any company today that is still saying let me throw more people at the problem, then they're already losing. It's a slow march to debt. They just don't realize it.

Tony Hines: 9:13

I couldn't agree more. That's great. Now, in terms of your ideas on mega trends, I mean I was fascinated. I mean, as you've said, you've given us some clues. You said there could be 10 fires. There could be you know, ship problems here. I mean we've got them in the Panama Canal area with the low draft for the ships, Maersk going on rail trains and all that kind of stuff. And then we've got this, you know, trouble round the Red Sea with Hootie Rebels in the Bab al Man Dab Strait. Now this must be a nightmare for everybody who has to put shipping from Asia to Europe, to the United States and vice versa. So what's your experience in that area presently?

Bindiya Vikal CEO Resilinc: 9:57

Yeah, I mean we look at the mega trends as five key mega trends and you know, even when we came up with this last year or the year before, when we started talking about these five mega trends, I mean it just look around you and you see that trend has just accelerated even within the last year, in 2023. Geopolitics I mean we were talking about Russia, Ukraine, then we had the US and China, the whole competition around who gets to be in the supply chain and how much. Now we have Israel and now we have this whole Red Sea crisis, right. So the geopolitics of the world align and now we have ally shoring, we have reshoring, re-globalizing, whatever you want to call it.

Bindiya Vikal CEO Resilinc: 10:42

Oh yeah, off shoring on, shoring Every other geopolitics of the world are influencing supply chain as we never have seen before. So that's a huge trend and it shows no sign of slowing down. Then we have climate right, I mean climate change. I already gave you some numbers. It's just continuous acceleration. We see droughts in some parts of the world. We see extreme weather and flooding in other parts of the world, wind events, hurricanes I mean it's just across the board tornado. You just look at the warehouse destruction where medicine had. Just one tornado hits a warehouse and medicine across its scattered and strewn across the region. It's just crazy how much climate related disruption we are seeing. And this is a worldwide phenomenon and climate like.

Bindiya Vikal CEO Resilinc: 11:35

If someone might think well, why is drought important? Well, one is obviously wildfire, which can be somewhat contained, but more critical is when you have hydroelectric power plants that don't have enough power to operate and that results in staggered power outages to factories which require uninterrupted power and water to operate. And now you see the supply chain get really disrupted and we've seen that happen in Taiwan, a very critical semiconductor location, where and now we have reshored the supply chain. To the US, where we have put it in Arizona and Phoenix, which are also drought-stricken areas. So you see, the drought situation can be very, very unpredictable.

Bindiya Vikal CEO Resilinc: 12:23

Then we see cyber. I mean the supply chain works in cyberspace. I mean, yes, we have physical flows and of goods and services around the world. But think about it If you cannot transact or purchase order, you effectively shut down. And we've seen this in event after event where there's ransomware attacks, whatever malware or whatever, and companies have to shut down their systems while they go do that assessment and all transactions stop in the virtual world. Your supply chain has shut down in the physical world hundreds of millions in impact Right.

Bindiya Vikal CEO Resilinc: 13:01

And we are more vulnerable, particularly in the western world, across the US, uk, europe, because we are more connected to the internet.

Tony Hines: 13:10

Absolutely. Yeah, I mean, it's a real problem, isn't it? The cyber attacks not only have you got the physical attacks, but we've got the cyber attacks and cyber world, and we want to operate in cyber world because it's faster, it's effective and it's a means to actually get that supply chain smarter. So we're going to have to learn stuff, aren't we about how to stop it? Yeah, yeah, so you talk.

Bindiya Vikal CEO Resilinc: 13:36

And I mean the cost of entry is very low, right, Right, I mean, all you need is an internet connection and computer and you can wreak havoc if you attack the wrong place. That's a key vulnerability. And with cyber, the other issue is that a lot of companies, their IT departments, are really focusing on their own IT systems, whereas if you have a supplier who has a cyber incident, it will still affect you and there's not a whole lot of clarity as to who owns the supplier's assessment. So that's one of the challenges where it's getting better, we're getting more aware, but cybersecurity is still everyone's problem and I don't think we necessarily think about that in procurement. Then you have sustainability ESG as a big initiative, especially now with that becoming a compliance issue. Companies have PFAS, which I don't know if you've covered PFAS. But huge change, pfas are forever chemicals. They're in the little products we use every day. Our clothes have PFAS, our cooking instruments have packaging material.

Bindiya Vikal CEO Resilinc: 14:49

Everything has PFAS, our medical devices have it, our cars have it, and there's a huge push against PFAS by European government, the US government, to get those products out of our environment, which is easier said than done, I think. Just in general ESG and under the laws like the European German Diligence Act or the US UFLPA, we have governments who can now revoke your business license or your export license or seize your shipments, and the onus is on you to prove that you've done the diligence. It's created a lot of change in how companies manage and operate their supply chain. This is another mega trend and we see more and more companies coming out with more ESG and environmental laws, so we don't see any slowing trend there.

Bindiya Vikal CEO Resilinc: 15:53

Then, the last mega trend we really see is a huge issue of our time is labor crisis. We see labor disruptions as a huge acceleration, almost a 10x acceleration in the last four or five years compared to where we were in the number of disruptions. Some of it is the aging workforce across many countries, not just the West we talk a lot about the West but even Japan, china, south Korea have aging workforce and we need supply chain needs people, skilled, unskilled. We need people. That's a huge crisis for continued supply chain operations.

Tony Hines: 16:37

Right, yeah, it is Definitely while we're on the matter of people Going back to your PFAS stuff I mean, that's interesting. We can blame DuPont for that, of course, can't we? They were the people who came up with that particular chemical, but perhaps we ought to go back to them and ask them what the solution is to the problem. Maybe they'd help us out with that one. But going back to the idea of people, what do you see as future skills that people will actually need to come into the supply chain and make a contribution?

Bindiya Vikal CEO Resilinc: 17:09

It varies across the board. I think, in general, we need to be more open to leveraging and using technology, automation, ai. Across the board, we see our hesitancy or our fear of technology change or new changes that happen as being one of the biggest areas where we resist progress a little bit, and it's the fear Forgive me, but the media does amplify that fear. Instead of getting people more comfortable with the tech, we amplify the oh my God, the tech is going to kill humanity or something. So just a simple, simple example.

Bindiya Vikal CEO Resilinc: 18:00

I always talk about this the teams or Zoom or Webex. These techs have been around for many years the ability to do a video conference, but we still used to jump on planes for a one hour meeting, whereas now look at the amount of transformation in our day-to-day operations and that the pandemic basically forced us to adopt that scale. So what I'm trying to say is that there are these technologies that are continuously available, but without a forcing function. We typically tend to be afraid of them. So I think the biggest thing that I would say is most impactful is our ability to try new technologies or new things that are available to us and, yes, sometimes we'll make a mistake. Some things will work and other things will not. But if we don't even embrace it, then we fall behind our competitors, who might be a little bit more receptive to new ideas. So I think that's a very general idea, but it's generally applicable as well in supply chain.

Tony Hines: 19:08

That's right, bindiya. I think what you said. It's about being open to the idea of the tech, but not only just being open. We need a little push. Sometimes it's the cause and effect and something has to drive us to want to do it. There's a motivation to use it, I think, isn't it?

Bindiya Vikal CEO Resilinc: 19:24

Yeah, I mean, just look at Resilinc. We invented Resilinc a good, simple, easier, faster, cheaper way to achieve resiliency in 2010. We've been around for 13 years and 10 years before the pandemic. But a lot of people didn't think supply chain risk was important or they kept reverting to the traditional ways of managing supply chain risk, like, oh, I'll just build you know reshore factories, or build inventory. Or oh, let me second source everything. And look, I come from the direct material space. That's a dream that's not achievable. There are certain things you cannot second source, no matter how much money you throw at the problem.

Tony Hines: 20:09

Yeah, like like semiconductors hey you know what.

Bindiya Vikal CEO Resilinc: 20:14

It can even be something simple as a bolt or a nut or like some. It doesn't have to be the complex stuff you know sometimes you simply don't have it specialized. You need it, like for an for an airplane. You need a very specific composition of a simple screw, so it's not like you can just buy a million of them from some other vendor. You know it has to be very, very specific.

Bindiya Vikal CEO Resilinc: 20:40

So what I'm saying is, on the direct material side, transparency. You pick your supplier, you go deep in with them, truly understand them and their business, build that long-term partnership, trust. Use solutions like Reslinc, where we monitor everything, we help you dig into and collaborate, not just with that direct supplier but the supplier-supplier-supplier when a crisis happens, so that way you can be single source, you can remain a global supply chain while still giving yourself the speed of execution as your competitive advantage. So I think that is a part a lot of people don't understand that by more bodies at the problem, you're creating more silos. By throwing inventory at the problem, you're just adding, creating a really unhealthy balance sheet. By trying to reach your factories, you're introducing a whole host of new risk into the supply chain, not to mention the cost might very well be hundreds of millions or billions of dollars.

Tony Hines: 21:42

Right? Yeah, I mean, that's absolutely right, isn't it? And I think this approach that you talked about, you know, the tier one, tier two, tier three, going to different levels of supplier that's very important, and I think one of the things that your company probably does quite well is keep that visibility, so to lower that risk.

Bindiya Vikal CEO Resilinc: 22:00

So, yeah, visibility is thrown about as the solution to the problem, but visibility is just the start of the journey. Right, you can get a lot of visibility, but if you don't use the data in an actual workflow? So an event happens, do you get early notification? Are you able to quickly translate that to exactly how your supply chain is likely to be impacted? Are you able to connect directly with a third tier supplier, understand how severe the problem is? Work across the tiers to make sure you're protected? I mean, that's that workflow which this visibility powers. So having visibility is step number one, but then training your team to use this intelligence to manage supply chains differently and have them executing faster, event by event, day by day, is where the competitive advantage comes from.

Tony Hines: 23:01

Absolutely couldn't agree more. That's wonderful. Talking to the converted, I hope a lot of folks who are going to listen are also going to be converts and perhaps come along your way to talk to Resilinc a little bit more about what their needs might be. Let's just kind of turn our attention to perhaps some other ongoing issues in supply chains that from your experience and from your point of view that you see are going to be really important in the next, say, three to five years.

Bindiya Vikal CEO Resilinc: 23:36

Yeah.

Bindiya Vikal CEO Resilinc: 23:36

So I think one thing is, supply chains have typically supply chain leaders and procurement functions have been sort of set aside. If you will oh, you're the cost center reduce inventory and keep the cost down, and that's your job, I think when you start thinking about resilience and building supply chain partnerships with multiple tiers of suppliers, it's a very different skill set. It requires a whole new mindset of what we consider our KPIs, our metrics, the tools and technologies. The type of people we hire can't be the people who just suck the blood out of the supplier as for cost savings, but like truly extend their partnership into the suppliers, understand their business and build long term relationships, find those win-win solutions. So it requires a transformation across people, process, technology, incentive structures, bonuses, how we operate.

Bindiya Vikal CEO Resilinc: 24:37

So this new thinking, what I really want people who are listening to walk away with is if you're the CEO or a board member, your supply chain leader deserves to see that the table. They should not be thought of as a cost center. This is an incredibly important revenue generating function, because if your supply procurement leader can acquire parts, you're not going to meet your quarterly objective, Simple as that. So you've got to think of them as revenue enabling and not just a cost center.

Tony Hines: 25:12

Absolutely right. I think that's a really important point. It's about the revenue that they can generate for you and it's about the risk that it can reduce. They can see things more clearly because they're on the ball. If they're on the ball and they can see through and they have that visibility that we talked about a few moments ago and they can see the future, they've got our future window then that creates a very powerful person in the organization and they definitely should be on the board. So I'm with you. I'm with you on that, bindi. Yeah, so tell us a little bit more about, I mean, your background to where you came from and how you got to where you are. I mean, it's really exciting. It's kind of it must encourage a lot of people who are thinking about careers in supply chains, particularly female entrants, who perhaps don't see supply chains as something that they ought to be doing. But they really ought to, shouldn't they?

Bindiya Vikal CEO Resilinc: 26:15

Yeah, they should actually. Supply chain is very exciting. I mean I've done a little bit of marketing sales. I've done finance my background, because I always say that I'm very jealous of, you know, those people who know what their life path is and they're on it. I wasn't one of them.

Bindiya Vikal CEO Resilinc: 26:35

I sort of did a little of multiple things and somehow landed in supply chain and ended up falling in love with it. Because it's just exciting. You're interacting on one day with customers on this side, suppliers on that side. I mean you really are in the middle, enabling the business and making things happen on a day-to-day basis. And it's incredibly complex because there's no real one good answer.

Bindiya Vikal CEO Resilinc: 27:00

You know you can hold a lot of inventory. You can have not enough inventory because you really have to optimize. You can do too much second sourcing not enough. You have to optimize. So you really need judgment in a lot of places and the wisdom that comes from just having lived through so many different types of bad things that can happen to kind of get you to that right place of balance. So I think for me and it's exciting every day because, like one day you're dealing with a crisis here, another day there's a factor fire, next thing you're reading all about a pandemic or researching the Thailand basin and why flooding happens on those planes near Bangkok and it's just really, really interesting because I think you get to experience a really global. You know, embrace the global mindset, work with teams around the world. I mean, we never worked with people in just the US. We had suppliers in China, Japan, you know. So you're just exposed to a lot of different things and cultures and I just loved it. I loved it. I really encourage people to think about that.

Tony Hines: 28:09

I can tell you love it. It's fantastic. I think if you want to understand business and you want to understand people and you want to see it from different perspectives around the globe, it's the place to be and it provides opportunities and it does all kinds of stuff. So I think that's great.

Tony Hines: 28:29

So I think we're almost approaching the end of our short period here, and it's been fantastic to have you on the Chain Reaction podcast. It's been great listening to your thoughts and your ideas and I hope you'll come back at some time in the future and talk to me again about your developments and your new ideas, because I think it's been a marvelous experience you being on the show today. I would love that.

Bindiya Vikal CEO Resilinc: 28:53

Thank you so much for having me today.

Tony Hines: 28:56

Okay, thanks, bindiya, thanks very much, Thank you. tony, Is there any one final thing you'd like to kind of punch out there to people you know to get in touch with you, perhaps with their business art, you know?

Bindiya Vikal CEO Resilinc: 29:07

Yeah, I'm acting on LinkedIn, so it's Bindiya Vakil on LinkedIn. Just reach out and connect with me.

Tony Hines: 29:14

Okay, that's it then. So that's it for everybody. They can just contact Bindiya and talk to her about what Resilinc can do for them.

Bindiya Vikal CEO Resilinc: 29:22

That's right. Thank you so much.

Tony Hines: 29:24

Okay, Thanks, Bindiya. Thanks very much indeed. Well, I hope you enjoyed that episode as much as I did talking to Bindiya Vakil, CEO of Resilinc. Now there's a smart company. So that's it for this week. Hope you've enjoyed the show and I'll be back next time with another episode of Chain Reaction all about supply chain advantage. I'm Tony Hines. I'm signing off. I'll see you next time. Bye for now.