Professor Richard Wilding OBE
The Wall Street Journal recently made a documentary titled ‚Why global supply chains may never be the same. We, of course, wanted to understand why firsthand. Who better to hear from than Professor Richard Wilding OBE- described by the BBC and DHL as „one of the worlds leading experts in logistics and supply chain management. In a remarkably well-detailed interview, we discuss the ‚New Normal‘ in Supply Chain Management. We also cover what tomorrow‘s supply chain will look like, the latest trends, and how technology can contribute to a more resilient but also socially fair economy.
QUEST: Supply chain and logistics is quite a fascinating system. And reading your biography and the interviews, I could tell you’re in the field intently. So tell us how and why you became a supply chain expert.
Wilding: When I started my career, I had my first degree in Materials Engineering. I actually got my first job working for a manufacturing company making bricks, so I was in production management. But while working there, one of the interesting things I had responsibility for was clay coming in. Making sure that it was out of the ground and into our facility. And I also had responsibility in terms of getting it to the building site where it was being used. And in a way, that was a small supply chain.
Now, to some extent, that sowed the seeds to my career. But my career started off very much in the industry. And I then accidentally fell into academia when I joined the University of Warwick manufacturing group. And if you like modern supply chain thinking, it was at that time still evolving. The term supply chain, as we use it now, only came about in 1982, created by some consultants who did a short article. So that’s the first place you can trace it back to, but we have to remember supply chains have been around for millennia.
We’ve got all this wonderful technology. But supply chains don’t operate without people, so we have to sort of
recognize that.
If you get your Bible out and look at the books discussing King Solomon, it describes supply chains. It talks about where products were moved from and the trading relationships he had with certain kings so that he could get certain raw materials. Of course, the language has changed today. But the principles applied back then are being applied today in modern supply chain thinking.
I often say if you’re looking at somebody who conquered the world through logistics and supply chain, just read the story of Joseph in the Bible. He was put in charge of building up stocks during the times of plenty. So he built warehouses and then started selling all the grain he had back to the people in the times of shortage. So, effectively, it was global domination through storing up the excess, then selling it back.
Ultimately, people ran out of money, and were in debt to the Pharaoh. And thinking about some of the modern things which go on today, you see countries that have been put into debt to other countries because of the supply chains they are part of. So you know, it’s always worth looking back in time to see where things may go as we move forward in time as well. I’m always one for learning, learning things from history.
QUEST: Very fascinating. We had an interview with Dr. Scott Stornetta. He mentioned getting the idea to build blockchain from something he saw in history that would be a problem going into the digital age. So I find the similarity in linking history to the present age very eye-opening.
Wilding: Yeah, very much. I often say that innovation is taking ideas that are new to you and creating economic, social, or environmental value. One of the key things I often describe my role as is to challenge and inspire business and supply chain leaders to innovate. And when I’m thinking about innovation, I’m thinking how can I encourage them to take new ideas and apply them to create value and make their businesses more profitable.
But also, can they do good things for society? We’ve got real challenges around child labor, modern-day slavery, and things like that. So what can we do to encourage them to think about the social consequences of their decisions as well? And so, can they innovate and cre ate value for society? And, more importantly, how can we create more value for the planet?
We’ve gone through the
old normal and are currently in what I would argue is the prenew normal. We’re not there
yet, but that’s the journey we’re all on at the moment.
So actually thinking through that, how can I challenge and inspire business and supply chain leaders to innovate? So that’s often what challenges me in my role as a professor and non-executive director; how can I actually challenge them to think differently about the way they do business?
QUEST: Supply chain and supply chain management changes over the years. You’ve talked about that already. Could you tell us about the changes you have seen throughout your career?
Wilding: I think it goes back to some of the core principles of what we’ve been wanting to achieve. At the end of the day, supply chains are designed to deliver value to a customer.
Now, if we go back to when I started my career over 30 years ago, one of the big things was that computing technology was very much in its infancy. So all we had was a vision of what we would have liked to achieve.
So when we talk about analytics, big data analytics, and so on, just a few years ago, those things were not even possible. Although people had a vision, it was not possible. So I think what we’re starting to see is that technology is moving forward.
And in recent years, with the pandemic, for example, a burning platform has been created where a lot of these technologies are being implemented very rapidly. So we see an acceleration in terms of what people are able to do within the supply chain. However, going back to what it’s all about, it’s all about delivering value. It’s about recognizing that competition is no longer between individual companies but the supply chains they are part of. That has to drive us to think differently.
And you know, when we talk about supply chain management, supply chain management is all about the management of relationships with all the stakeholders. I think it’s really important to think about how we manage relationships. So yes, we’ve got all this wonderful technology. It’s always going to be there. But supply chains don’t operate without people, so we have to sort of recognize that.
QUEST: The Wall Street Journal recently made a documentary called Why global supply chains may never be the same. Considering the COVID-19 pandemic, the war in Ukraine, and the energy crisis, to mention a few, is this a viewpoint you share?
Wilding: I totally agree with that statement. I mean, what we had as the old normal in 2019 were years of relative stability in terms of what was actually going on. But there were already seeds of big change taking place with regard to the technology which was going to be applied across the supply chain. And what happened was that I was predicting that these things would take five years. More automation in warehousing, people working in different ways, more remote working, and everything else because of the technology available at that time. The pandemic created this burning platform, forcing people to think differently.
It has changed what we as individuals value and therefore supply chains need to deliver different value.
If we go back to the foundations of supply chain strategy, which is your process design, infrastructure and equipment design, Information Systems Design, and finally, how you organize. The problem is we’re currently going through the growing pains of a new type of supply chain. And the reason is for many years, people have been investing in supply chain structures with processes, infrastructure, equipment, and information systems which worked very well in the old normal. But they don’t work in a world where everything has changed and what customers value has changed as well. So what we’re having to do is redesign the supply chains. But that takes time. And that’s part of the challenge we’re in.
So yeah. We’ve gone through the old normal and are currently in what I would argue is the pre-new normal. We’re not there yet, but that’s the journey we’re all on at the moment.
Quest: Which are the main trends in today’s supply chain management?
Wilding: Okay. So I think a couple of things that we’re finding is, for example, procure for resilience rather than for cost. So we’re finding that people, rather than just trying to buy stuff as cheaply as possible, now recognize that it’s more important to ensure that you get supply, which can sometimes cost you more money. Another trend we’re starting to see is that companies are questioning their ability to onshore so there’s less risk involved in the movement. Can they bring what they want or buy from more local suppliers? And if they can’t onshore, can they multi-shore?
One of the key things we’re trying to deal with is exploitation in the supply chain. It’s all about how we can make it so that everybody gets a fair wage and an opportunity.
I think the one thing that we have found is those companies that have been very good at managing relationships are the ones that have also been very successful. Managing that people side of things is really a key differentiator.
Quest: Your thesis was an investigation into sources of uncertainty within industrial supply chains, amplification, and deterministic counts. You had another on uncertainty generation in supply chains. Would you say working with uncertainty is something that interests you?
Wilding: Yeah, so that was in the 90s. At the time, one of the things that we were looking at was the bullwhip effect, which is where you get demand amplification going down supply chains. And so, a lot of my research was looking at that, but also at deterministic chaos. What’s interesting about supply chains is their complex adaptive systems. So they’re more or less like the weather. Well, the weather system is a similar sort of system. We’ve often heard of the butterfly effect, where you have a small change created by a butterfly taking off on the Great Wall of China, ultimately causing a tornado in America!. We get the same sorts of things happening in supply chains on occasions, that a small change somewhere can create a very big change in another place. That also creates what we call parallel interactions or ripples going across the supply chain. We’ve seen this in recent years, seemingly unrelated supply chains start to disrupt each other.
Quest: You mentioned modern slavery, and I was not expecting this topic from a supply chain expert or a supply chain management professor. I think it would be great if we could see businesses become more ethical and responsible. But tell me, what is your interest in this topic?
Wilding: One of the key things we’re trying to deal with is exploitation in the supply chain. It’s all about how we can make it so that everybody gets a fair wage and an opportunity. Legislation in America, but also recently in Germany, where laws have been passed about the exploitation of the environment or people within the extended supply chain. As a company director, you can be held accountable if you don’t know what’s going on in your extended supply chain. So you can’t just turn around and say, well, I bought it from that person over there assuming everything’s fine. No, you’ve got to actually be purposeful and ask the questions to ensure that you know and can manage the level of exploitation.
We’ve got all this wonderful technology. But supply chains don’t operate without people, so we have to recognize that.
Some companies have been very good at doing this. Companies like Apple are continually trying to identify what’s going on in their extended supply chain, even for a lithium-ion battery that is going into the product. I’m talking about supply chain goods and services here. Still, of course, we also have the dark side of exploitation, which leads into serious abuse of people, prostitution, and things like that. From an ethical perspective, exploitation is wrong. And it needs to be dealt with appropriately.
Quest: What does the supply chain in the future look like? What do you see as the reality of it in the upcoming years?
Wilding: When we start to look at what’s happening within the supply chain, there is no doubt that we’re having to restructure supply chains. A big part of that will involve more automation. We are going to see more technology. But we also have to recognize how we manage that evolution to these new ways of working and reducing the overall cost to serve within the environment. At the end of the day, supply chains are always about delivering value and products to people . However, I think we have to be pragmatic about the cost to serve. Because we’ve been through times of everybody wanting it faster and faster and people saying the future of supply chain is that you’ll be able to place an order online and get it delivered within 30 minutes. Well, you can do that now. But you have to pay a lot of money. So you suddenly end up saying, well, hang on a minute, I’m better off just waiting. So I think we’re going to see service being the key thing. How we create value for the customers will be key. The technologies and automation we now have will help with some of those things, but it has to be in the appropriate way of working.ety? And, more importantly, how can we create more value for the planet?
When I’m thinking about innovation, I’m thinking how can I encourage them to take new ideas and apply them to create value and make their businesses more profitable.
So actually thinking through that, how can I challenge and inspire business and supply chain leaders to innovate? So that’s often what challenges me in my role as a professor and non-executive director; how can I actually challenge them to think differently about the way they do business?
Quest: Supply chain and supply chain management changes over the years. You’ve talked about that already. Could you tell us about the changes you have seen throughout your career?
Wilding: I think it goes back to some of the core principles of what we’ve been wanting to achieve. At the end of the day, supply chains are designed to deliver value to a customer. Now, if we go back to when I started my career over 30 years ago, one of the big things was that computing technology was very much in its infancy. So all we had was a vision of what we would have liked to achieve.
So when we talk about analytics, big data analytics, and so on, just a few years ago, those things were not even possible. Although people had a vision, it was not possible. So I think what we’re starting to see is that technology is moving forward.
And in recent years, with the pandemic, for example, a burning platform has been created where a lot of these technologies are being implemented very rapidly. So we see an acceleration in terms of what people are able to do within the supply chain. However, going back to what it’s all about, it’s all about delivering value. It’s about recognizing that competition is no longer between individual companies but the supply chains they are part of. That has to drive us to think differently.
And you know, when we talk about supply chain management, supply chain management is all about the management of relationships with all the stakeholders. I think it’s really important to think about how we manage relationships. So yes, we’ve got all this wonderful technology. It’s always going to be there. But supply chains don’t operate without people, so we have to sort of recognize that.
Short Bio
Professor Richard Wilding OBE is a globally recognized thought leader in Logistics and Supply Chain Management, acknowledged by the BBC and DHL. Formerly the Chair in Supply Chain Strategy at Cranfield School of Management, UK, and the Immediate past Chairman of the Chartered Institute of Logistics & Transport U.K., he collaborates with international companies across various sectors. Richard is known for challenging and inspiring global business and supply chain leaders to innovate, aiming to turn knowledge into action. Appointed in 2005 as the first-ever Full Professor and Chair of “Supply Chain Risk Management,” he has received numerous awards for his contributions to the field. Richard’s special interests include supply chain 4.0, collaborative business environments, and techniques for aligning supply chains to maximize customer value. In 2013, he was honored with an OBE by Queen Elizabeth II for his exceptional services to business in the New Year Honours. Professor Wilding expressed his gratitude, highlighting the recognition of Cranfield School of Management’s global excellence in Logistics and Supply Chain Management.
