Supply Chains Rewired: Data, Disruption, and a Sustainable Future

In this episode of Supply Chain Visibility Stories, host Bill Wohl sits down with BCG’s Dr. Marcell Vollmer to discuss how global disruptions, sustainability mandates, and emerging technologies like 5G and RFID are reshaping supply chain strategy. Learn why real-time data, transparency, and resilient design are now non-negotiable in modern supply chain management. Powered by ACSIS, the cloud platform built for 100% visibility.

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Narrator:

Welcome to the Supply Chain Visibility Stories, the podcast for supply chain managers, brought to you by ACSIS, the 100% supply chain visibility cloud solution provider. Supply Chain Visibility Stories is hosted by Bill Wohl, a technology industry veteran and enterprise software professional.

Bill Wohl: 

Thanks, everyone, for joining us. Today marks the next in a series of discussions exploring the intersection of technology and business. We try to make these discussions brief and focused. We're hoping this format inspires our audience to think about how technology impacts their own organizations and to engage with us as the series continues. So, I'll have information about how to engage with the series and our guests at the end of today's discussion. I'm Bill Wohl, and honored to be the host of this series brought to you by ACSIS. I'm always fascinated by the business challenges faced by companies and how those challenges can be addressed by technology. We started our series talking about the macro trends facing companies today, the impact of the pandemic, and how that's been driving a renewed focus on global supply chains. During the course of our podcast series, one of the recurring themes has been capturing data, especially in the gaps along the supply chain. We've dug deep into RFID approaches to the interconnectivity of systems and specific challenges by industry. Today, we're again going to talk about the broader issues impacting supply chains. Our guest is a partner and director at one of the world's leading business consulting firms, BCG, Boston Consulting Group, Dr. Marcell Vollmer works on advising sea-level executives and executive teams on the full range of digital transformation, innovation, new business models, and restructuring an organization with a focus on procurement, supply chain, and operations globally. Now, I had the pleasure of working with Marcell at SAP, and he is indeed an accomplished expert on all matters, supply chain, procurement, cloud, digital, and finance. Marcell, welcome to the program. Good to be working with you again.

Dr. Marcell Vollmer: 

Thanks, Bill, for having me, and it's really great connecting with you again. Appreciate it. 

Bill Wohl:

So, it's been kind of an interesting ride for me, sort of having focused at SAP on supply chain so heavily some 10 to 12 years ago and seeing it back in the forefront again. From BCG's perspective, from your perspective, why is the supply chain so much in focus again today now? 

Dr. Marcell Vollmer: 

I think, well, we have all seen what happened last year when COVID-19 started. Suddenly, we have seen disruptions in our supply chain, and with that, we have seen empty shelves in supermarkets. We have seen really also a huge need for certain products like face masks at the beginning of the crisis of the pandemic. Later on, we had some probably a little bit weird situations with no toilet paper available, and all this basically continued and really was a kind of eye-opening how important a connected supply chain is. Also, when we look back a little bit to the time when the evergreen got stuck in the sewers canal, we have also seen what one single ship can do to basically bring a stop to the trade between China or the Far East in general and Europe. One ship is enough, and basically, the entire supply chain stops on both sides. Empty ships can't go back, and this all has really opened our eyes, for we need to focus on an end-to-end overview of the supply chain. We need to monitor it closely, and we also need to rethink the way how we manage risk and come to a more resilient supply chain.

Bill Wohl:

So, as you and I partnered at SAP through the years, we watched some of the biggest manufacturing brands across a variety of industries in the world really invest billions of dollars in software systems designed to run supply chains efficiently. My sense is that those technology investments clearly paid off. But what has shifted is the way that supply chains are managed around the world. Today, products are built in one region like the Americas, shipped to the Asia-Pacific region for additional finishing, transferred into the European continent to be closed up, and then ultimately get to consers. Has the world's markets gone too far in a truly globally operated supply chain? Is it time to rethink those processes and keep goods more local, or is this the smartest way to do business?

Dr. Marcell Vollmer: 

Great question, though, and I think there are multiple aspects we need to consider. On the one side is the global trade - just to give you a little bit of perspective on that, it is about 19 trillion out of about 87 trillion what we have as global GDP. So, basically, everything that gets produced and traded around the world, and 19 trillion is a global trade portion out of that. Basically, everything is connected nowadays, and we also see growth from the current state to the next level in the next years except for one line we can see between the United States and China why there's a trade war ongoing. With that, the global trade or the trade between these two countries will decline the rest is more likely going what our analysis is showing right now. There's another component I want to mention and highlight, and, looking back on this year's COP 26 in Glasgow, where the climate target sustainability was a hot topic. We see now that CO2 emission targets are also getting included and become a price point whenever something gets purchased. From a different country in the world, and that's something also where we will see a significant change because China, of course, and Asia are very cheap places for production we see also how dependent we are I mentioned some examples at the beginning of the pandemic. but what is really interesting is now seeing that when we need to include the price for CO2 before something gets, for example, I'm a German, as you can hear from my strong accent, I'm based here out of Frankfurt, Germany that something needs to get additional  CO2 emissions on top of the price. The price range might change a little bit and might also change the way how we see the current production cost what we get in Asia compared to Europe. When we also now include and look at the risk mitigation side, we might come to a conclusion, and that's something that I see in my discussions with senior executives is that companies are looking into how we can go closer or come closer to the customers to the market. So is it really needed that everything gets produced in Asia or that we get the extract of the raw material in Australia that we ship it for production to Asia or pre-production processes then it goes to the United States then it might go back to a market in Europe. This all has certain risks included, and if a pandemic or a disruption of a supply chain is happening, basically, that's something companies are considering mitigating the risk by also localizing  certain parts of their supply chain. I will not say that global trade is supposed to stop or significantly change. It is most likely that it will continue to grow, but there will be a shift from specific markets, and risk management and sustainability aspects will also change the way how procurement is managing suppliers in the future.

Bill Wohl:

So that makes sense, and it is because, in this podcast, we talk a lot about the integration of technology to the impacts of business and geopolitical issues. This is where understanding the data from the supply chain and having real transparency and real-time information becomes important because the kind of executives you're talking to is going to have to make very informed decisions about whether or not the, for example, sustainability costs of moving goods from Asia to Europe really outweigh the cost of local manufacturing and those decisions shouldn't be made from the gut. They need to be made with real data. So, the concept of a really transparent and well-informed supply chain becomes particularly important as these shifts start to occur. Correct?

Dr. Marcell Vollmer:

 Absolutely. I couldn't agree more, Bill. 

Bill Wohl: 

So we think about the impacts of changing technology as you look at it from BCG's perspective clearly RFID tagging the potential voles of information that could come in 5G these are technology trends that will be important in the supply chain space.  Do you agree from BCG's perspective?

Dr. Marcell Vollmer: 

Absolutely. We see a lot of investments that are happening right now connected devices, internet of things are definitely something which is impacting supply chains and will also include huge investments what's happening and the reason for that is on the one hand you want to have transparency you want to monitor your supply chain you want to understand when do I get my  my goods which I urgently need for my for my production and with 5G we might have also a different level of what we can do to monitor logistic processes to monitor the entire distribution what we have it is also coming back on the aspects of sustainability when we really can place and track goods from the origination to to the manufacturing side to the consumer market. We know exactly what the footprint is. We know exactly who is involved in the process. We have full transparency. We can disclose that and if consumers are looking now, I want to know I want to understand where is the time oil from which is part of the products I consume.  Where do the metal come from? What is used in the products. This is something also you only can achieve if you really connect every single step in your supply chain and you only can do that with technology.

Bill Wohl:

If I think about the global footprint of BCG and your view of the world from a truly global perspective who's in the lead here? My sense is that Europeans have always been on the forefront first of worker privacy and then of sustainability. If you look at the big brands that you work with around the world in what region are supply chains probably their most mature at this point?

Dr. Marcell Vollmer:

Oh, that's a great question. I would definitely say that United States, the largest economy in the world as well as Europe are really ahead.  huge investments are currently done in Asia  predominantly in China as well as in Japan. This is where I would see basically the leading countries and companies based in these countries. I would not necessarily say that the supply chains and how they are managed are necessarily also the most advanced in every single aspect to be clear and the reason for that is it is really very connected and also other countries are now looking in the opportunities and I give you one example  I was personally very impressed about we were in Europe as well as in the United States heavily investing in in computers and starting really everyone was having one at home today absolutely normal in Africa which you they might be a little bit behind in certain aspects. I agree on that. But they basically skipped the process by investing in computers and they went right away to mobiles.

Bill Wohl:

Right.

Dr. Marcell Vollmer:

And now we have smartphones and that's also an opportunity which you see on the other side which is happening right now that the mobile business and coming back to connected devices 5G what I what I briefly mentioned this is exactly also one example and an enabler of technology which you can use and can also change a little bit the way and how countries are doing business and also getting access to information to run supply chains in the future in a much more automated and more digital way than ever before.

Bill Wohl:

So we have just a few minutes left. So two quick questions.  First, what do you think will be the biggest trends in the supply chain space in 2022? We talked about RFID and 5G. You mentioned mobile. Is that where the focus is likely to be in the coming year? 

Dr. Marcell Vollmer:

Yeah, I think it continues. Number one is the resilience and this includes also that companies are thinking about how to best optimize the supply chain setup in general. The second one is  I couldn't agree more on the digital capabilities and the connected devices what companies investing right now monitored by I would add one term supply chain control tower basically having an overview about all the different aspects the information what you get in a supply chain you can't oversee this by yourself. You need to get a kind of dashboard and a so-called supply chain control tower might be one way in really keeping an overview and getting the right alerts if a crisis is happening, if a ship got stuck or if a pandemic is causing a lockdown of a city or an entire area.

Bill Wohl:

So, last question and we often use this question at the end of our podcast series. These are a lot of big complex geopolitical macro trends. It can feel a little bit daunting for supply chain managers as you advise seuitees on these topics where do you tell people to take the first steps? How do they get started to get a better handle on their supply chains?

Dr. Marcell Vollmer:

I always advise in the way that I say hey you need to have a vision why do you do the change what is it really what you what you want to achieve second step is then look at a use case at a business case what is really adding value for your customers I always put the customer in the center of everything and and what urge everyone look at that what adds value for the customer. If you do that I'm pretty sure you will come to the next level of your supply chain on the other side as you serve your customers well you will also see that you continue to grow and hopefully sell successful products to your customers and win new customers in the future. Still, you only can do this with technology and therefore, you need to think about what is really the right investment the business case, which adds the right value and serves the customers best.

Bill Wohl:

Love your global perspective, Marcell, with a lot of experience. Great to have you on the podcast. Thank you so much for joining us.

Dr. Marcell Vollmer:

You're welcome, Bill. Great pleasure being here. Thank you very much for inviting me.

Bill Wohl:

I'm sure we'll be talking to BCG again on this series. That wraps up today's podcast. My thanks to ACSIS Always for making the series possible. We welcome your comments and questions about the discussions and you can engage with us at the official ACSIS' Twitter and LinkedIn accounts. So be part of that discussion. I'm your host, Bill Wohl and for everyone at ACSIS, thanks for joining. We look forward to the next podcast in this series. Talk soon. 

Narrator:

Thank you for listening to Supply Chain Visibility Stories brought to you by ACSIS the 100% supply chain visibility cloud solution provider. Visit us on the web at ACSISinc.com. That's acsisinc.com or join the dialogue on social media. Look for ACSIS Inc. on LinkedIn and Twitter. Join us next time for supply chain visibility stories brought to you by ACSIS.