Digitalization, global supply chains and environmental sustainability are all high on the agenda of businesses leaders and governments across the world. Dominic Kaeslin, Director of Studies in Digital Supply Chain Management at the University of Applied Sciences of the Grisons interviews Dr. Andrew Lahy, Solutions Director at DSV to discuss how a new course on digital supply chain management at the University of Applied Sciences of the Grisons (UAS Grisons) is providing students with the scientific knowledge and the practical skills to help design and implement the digital, connected and circular supply chains of the future.
Interview: Dominic Kaeslin / Images: Shutterstock
Are global supply chains really that inefficient? What needs to change?
From a purely financial perspective, the global supply chains that have been developed over the last 60 years or so, are incredibly efficient. Products are manufactured mostly in Asia and moved across the globe using a huge network of planes, boats, trains, trucks and warehouses. When you step back and look at the global supply chains that we have been developed over the last decades, it is quite amazing what has been achieved!
But, there is a major issue with today’s global supply chains: the world has changed and global supply chains have not yet adapted to this new world. Even before the global pandemic, technological advances, major changes in the global macro-economic and political landscape and shifts in consumer demands were making those long, elongated global supply chains that worked so well in the past, completely inefficient for the world we live in today.
The pandemic has accelerated the need to rethink the way we design global supply chains and environmental concerns have made us all realize that we must start making the changes now.
What is the influence of these inefficiencies on sustainability?
As consumers and as a society we want, in fact we need, the products and services we buy to be manufactured and delivered in an environmentally sustainable way. Quite simply, the global supply chains that we have now are not environmentally sustainable. The amount of carbon used to move products across long, global supply chains and the large volume of products and materials that ends up as waste, has to change.
In terms of adapting supply chains to make them more environmentally sustainable, it’s less about looking for inefficiencies, and more about a radical rethink. We need to transition from the old elongated, linear, take-make-dispose supply chains of the past, to short, connected, circular supply chains of the future.
Why should companies be interested in the digitization of supply chains to improve the sustainability of their core processes?
Digitalization has the potential to completely revolutionize supply chains, improving both efficiency and sustainability. With new digital technologies, it’s possible for businesses to design personalized products, predict when the product will be needed, manufacture on demand using additive manufacturing, deliver the product using robots and autonomous vehicles and track the use of the product over its life cycle and bring it back and repurpose the material when the customer no longer needs it.
There is no doubt that supply chains are moving in this direction, so every manager, not just supply chain managers need to understand what digitalization can do to transform their supply chain. But just as importantly, managers need to also understand how to operationalize and commercialize these new digital technologies. There is no magic bullet or one technology that can transform a supply chain, and the challenge for many supply chain managers is knowing when, where and how to introduce these digital technologies into their supply chain. Its these skills that students at UAS Grisons are learning, and these skills that will help create the supply chains of the future.
That all sounds promising, but also rather complex. What can a small or medium-sized company do?
You are right, it is complex, but I actually think that is what creates the opportunities for small and medium sized companies in particular. In many cases, smaller and medium sized companies can transition more quickly to the digitally connected, local and circular supply chains much faster than very large global organizations.
Also, new digital technologies allow small and medium sized firms to tap into a much wider eco-system of technologies and connect and collaborate with other companies much faster than in the past. So you are right, it is complex, but there are fantastic digitalization opportunities for small and medium sized companies too.
Lots of companies are focused on “de-carbonization”, but you believe there is also a need to focus on “de-materialization”, can you explain what you mean by “de-materialization"?
That’s right. There is rightly a lot of focus on decarbonization, but we believe that’s only part of the sustainability challenge and dematerialization is just as important.
But there is another area of environmental sustainability that seems to get less attention, and that is the topic of dematerialization. This is related to the need to reduce the millions of tons of electronic equipment, clothing and industrial equipment that end up in landfill or are incinerated.
This dematerialization topic is an area we are focusing a lot of our research and business attention on as we see there is a need to move to a new type of circular supply chain where no material ever finishes up in landfill and all material would be repaired, remanufactured or repurposed to maximize material value and material life cycles.
Helping companies transition to new circular supply chains is the main focus of our research at the new RemakerSpace™ and where we see lots of potential for companies like DSV. With its large network of facilities all over the world and technical Logistics Manufacturing Service capabilities, DSV is very well placed to help businesses extend the life of products through repair, remanufacturing and repurposing services, and play an important role in accelerating the transition to the circular supply chains of the future.
The UAS Grisons offers students the possibility to learn about the tools and concepts you just described through an undergraduate program in Digital Supply Chain Management. What are the prospects for graduates of this program?
I think there has never been a more interesting time to work in supply chains. But more importantly, there has never been a time with such an unprecedented need for smart graduates with digital skills and a passion for sustainability to come and work in supply chains.
In short, the prospects for the undergraduates of the digital supply chain management course at UAS Grisons are excellent!
About Dr. Andrew Lahy
Andrew Lahy was born and raised in the United Kingdom. He completed a MBA at the University of Bradford and a PhD at the University of Buckingham. Since 2011, he worked in various roles at DSV (formerly Panalpina), currently as the Director Solution Design for Logistics Manufacturing Services. Since 2013, he also serves as a Co-Director of the PARC Institute of Manufacturing, Logistics and Inventory at Cardiff University.
In 2015, Lean Management Journal has recognized him as one of the "Top 25 Most Inspirational Individuals in Lean Management". He shares his extensive experience with the supply chain community as a Committee Member of the CIPS Switzerland Branch, as the Mentorship Chair of the CSCMP Roundtable Switzerland and as a guest lecturer in the Digital Supply Chain Management program at the University of Applied Sciences of the Grisons.
About the BSc Business Administration - Digital Supply Chain Management
Students of the BSc in Business Administration with a Specialization in Digital Supply Chain Management at the UAS Grisons (Fachhochschule Graubünden) learn how to optimize value chains and how to digitally transform supply chains and companies. For more information on this unique part-time undergraduate degree in Switzerland, visit the program website.
This interview was originally published in German language in the February 2022 edition of the FHGR Wissensplatz magazine.