Supply Chains: Anchors of Resilience

By Shani Calvo, MHI Solutions 

During the April 13 keynote at ProMatDX, American Logistics Aid Network’s Kathy Fulton and a panel of supply chain thought-leaders from Clorox, FedEX and C&S Grocers explored lessons learned from the pandemic and how building long-term resiliency into supply chain and logistics operations will be key to adapting and recovering when future disruption or disaster strikes. 

And the reason for this conversation? “We’ve just gone through a year’s worth of insanity in our supply chains due to the pandemic,” said Fulton, as she led the discussion with Rick McDonald, senior vice president and chief product supply officer, Clorox; Carmela Hinderaker, senior director of business continuity and customer support, C&S Wholesale Grocers; and David Lusk, director, FedEx Global Security Operations Center, FedEx Services. 

The insanity could have been worse, though, especially if the crisis caught your company off-guard and unprepared. These three companies all faced very different challenges, but all three established their resiliency, prospered and learned a few lessons along the way, some of which they shared during this very conversational keynote that took on a presence not usually experienced at the in-person shows. The discussions were akin to one-on-one conversations and the atmosphere was relaxed, with speakers sitting comfortably in front of favorite family photos and artwork, award plaques and miniature FedEx planes. At the same time, though, the conversations were deeply insightful and included specific suggestions and frontline experiences, including when it came to their definition of what resilience actually means to their companies. 

“Resiliency equals elasticity in the ability to flex capacity or flex the network due to natural hazards or acts of man, whatever those may be,” explained Lusk. Or, from McDonald: “For us supply chain resilience means being prepared for unexpected risks or events and then responding and recovering as quickly as we can and moving from a disruptive state to a more stable state.” And, for Hinderaker, it is being able to keep their deliveries and turnaround times intact every day. 

When it comes to enacting supply chain resiliency, preparing for unexpected events during “blue sky times,” is paramount and differs for most companies. The skills that are needed in a crisis situation are different than those in blue sky situations, explained Fulton. However, there are some staples, ones that helped Clorox be prepared, according to McDonald: 

1. Running efficiently. “We have a group dedicated to looking at our supply chain strategies around the world and modeling that to make sure we are lined up with our P&L leaders for what they see coming relative to future demand and our ability to supply,” said McDonald.

2. Supplier relationship management. “This is huge for us.”

3. Operating on a continuous improvement model. “How we can be better tomorrow than we are today.”

4. Making significant investments to technically transform the company, such as the digital supply network. “It is allowing us to run at the speed of business,” said McDonald. 

At FedEx, team building is a big part of being prepared and in laying the groundwork for operational resiliency. “Team building, on the front end, pays great dividends when there is an event,” said Lusk. This means team building not only across our business but across industry segments and completely embracing and nurturing relationships at the state, tribal and local levels, and also at the national level with FEMA, added Lusk. “By nurturing, I mean you have got to be engaged and participating… understand what they can expect and anticipate from you when the disasters come down the road.”

Clorox also prioritizes its team as part of its operational resilience. “Our IGNITE strategy puts people at the center,” said McDonald. “Our frontline associates are really our frontline heroes. They have made a huge difference in enabling us to produce more product than we ever have before.” He said that Clorox produced a million more units of disinfectant products between January and June in 2020 than they did the prior year. 

Going forward, the supply chain is going to look a little different because of the pandemic and the lessons learned from it, especially when it comes to companies being resilient. “For the food industry, our whole world really did flip in every single department,” said Hinderaker. Her candid accounts of what C&S had to do to weather the COVID roller coaster, especially as the cart was being catapulted directly into their front yard, was refreshing in its frankness. 

C&S changed some strategies from the buying perspective and also leaned on strong relationships with their vendors. On the warehouse and transportation side, they realized how important “industrial athletes” are. “The other thing that was kind of life-changing for our industry was the patchwork of government intervention and regulations in the beginning, and you still kind of see it now,” said Hinderaker. Understanding different districts’ capacity limits proved challenging. 

And it became clear that “grocery stores are really anchors of resilience,” said Hinderaker, to which Fulton applauded and added, “I think that with supply chain, in general, all of our activities are anchors of resilience.” 

For Clorox, supply chain resilience takes on a number of different forms. Part of its IGNITE strategy is to reimagine work, said McDonald. “One of my translations of that is staring at mindset, skillset and toolset. A lot of people immediately want to talk about the toolset. It is the shiny new thing in the corner that you spent a lot of money for. The reality is, leadership mindset—our ability as leaders to facilitate this digital conversation and move ourselves forward faster with pace—is equally important as is the skillset aspect. Reskilling and upskilling of those that work in our organizations is going to be critical for success.” 

A faster pace has already been set into motion, and moving forward, the post-pandemic supply chain will not be slowing down. COVID not only acted as an accelerator of changes already underway, “it has turbocharged our business over the last year,” said Lusk, who sees digital innovation as an important part of future resiliency goals. FedEx formed a collaboration with Microsoft and formed FedEx Surround, which shares a “digital illumination of the physical shipping world for our customers,” said Lusk. “That information is valuable for them to plan as well as for us to identify trends at the earliest possible period to build that capacity into our network going forward.” 

But, the most important part when it comes to being resilient: “All of this work is done on the front end before you need it. That is critical,” said Lusk. 

Click here to watch the full, recorded keynote: Beyond COVID-19: Building Supply Chain Resilience Is the Key To Recovery and Preparing for Future Disruption. Be sure to watch it to the end to hear the responses in the Lightning Round!