2023 Supply Chain Outlook: Expert

Advice on Thriving in Times of Change

Four experts weigh in on the future of supply chain management.
Contents

3 10

Applying the lessons of the supply Developing agility in times

chain crisis. of change.
Q&A with Joaquim Duarte
Oliveira, Deloitte Portugal

4 13

Building resilience means Shifting from output to outcomes.

bouncing back fast. Q&A with Vlad Filippov,
Q&A with Deepak Mavatoor, Spark Equation
Tata Consultancy Services

7 16

Adapting to continued supply The role of technology and

chain disruptions. automation in supply chains.
Q&A with Peter Liddell, KPMG

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Applying the lessons of the supply chain crisis.

The past two years have brought repeated, outsized To answer these questions, Appian interviewed four supply
disruptions to the world’s supply chains. Prior to 2020, chain thought leaders for their expert insights on the state
supply chains were largely invisible to the general public. of supply chains. These experts from Tata Consultancy
COVID-19 and other disruptions brought massive upheavals Services, KPMG, Deloitte, and Spark Equation bring decades
that shined a spotlight on a precariously balanced system. of supply chain management and technology experience to
bear on answering several key questions. We discuss the
Supply chain professionals are curious about a number of
state of supply chains, how companies can successfully
questions: What lessons can we learn from the past two
adapt going forward, the role of environmental, social, and
years? Are we out of the woods or will disruptions continue
governance (ESG) initiatives, and much more.
eating into company profits? And how can companies evolve
their supply chain management to survive or even thrive in
the future, no matter what comes next?

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Building resilience means bouncing back fast: Deepak
Mavatoor, Managing Partner, Tata Consultancy Services.

A Managing Partner in Growth and Transformation within TCS Manufacturing, Energy

and Resources business unit, Deepak heads the Supply Chain and Plant Operations
business advisory practice. He has more than 20 years of proven thought leadership in the
manufacturing sector across supply chain, manufacturing, and operations functions. His
passion is helping his customers shift their businesses to be driven by digital, IOT, and cognitive.
Mavatoor earned his MBA from the Ross School of Business at the University of Michigan, and
has a bachelor’s degree in Mechanical Engineering from the University of Mysore, India.

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Q&A with Deepak Mavatoor.

Q: What have the last two years shown about the “The concept of resilience shouldn’t
world’s supply chains?
assume that you won’t fail, but rather that
Well, for starters, two years ago, my family didn’t know what I
you should be able to get back up fast.”
did for a living. Now they do and think I’m the cause!

In all seriousness, the past two years have shown that the
way we think about our current supply chains as resilient or Some of the best companies have run more “what if”
robust is a myth. The supply chain has grown so global and scenarios so they don’t fall into the trap of thinking “this
complex that it has become brittle. worked for the last eight years, so I’ll continue to do this.”
They have the tools, processes, systems, and culture to
The concepts of lean manufacturing, just-in-time, or just-
handle these what-ifs. Some companies do sales and
in-sequence were great when the disruptions weren’t to
operations (S&OP) planning far more frequently—sometimes
this extent. We’ve become extremely efficient in our supply
two or three times a week—which shifts the culture to be
chain, making the tension so palpable that a single tap could
more scenario-planning-oriented.
break it. Traditionally, companies kept lean inventory for ideal
conditions, but if something doesn’t follow the ideal path, their
Q: What role should automation play for companies
inventory buffer goes away in 24 hours. You have to keep
in the supply chain?
enough fat in the system to withstand disruptions.
There’s a lot we do that doesn’t require a lot of discretion like
basic planning or forecasting. You can use automation to
collect the data, refine the data, and come up with intelligence
“We’ve become extremely efficient in so a human can make the final decision. At TCS, we have a
our supply chain, making the tension so concept called the “Machine-first Delivery Model.” Only if a

palpable that a single tap could break it.” machine cannot do the work do we send the work to a human.

When people talk one on one, they always recognize what

they could have done better, but they’re often so pressed for
Q: What makes the difference between those who time putting out fires that they can’t focus on the insights. We
successfully adapt and those who don’t? should be focusing on the top 10 percent of disruptions, but
we can’t because the other 90 percent takes up our time.
Well, almost no companies have been left untouched [by the
previous two years]. But the concept of resilience shouldn’t
assume that you won’t fail, but rather that you should be able
Q: What is the industry missing? What problems are
to get back up fast.
particularly thorny to solve?
Everywhere you go, people talk about increasing
When you think from that angle, you notice the best
collaboration. We all know the importance of connecting
companies have focused on scenario planning. In our
with tier-1 and tier-2 suppliers.
personal lives, we think about contingencies—what happens
when the kids aren’t on time or your alarm clock doesn’t go Everyone’s trying to solve this with only technology, but it’s
off? In the professional world, we always plan for an ideal not going to entirely happen that way due to a lack of trust
scenario. It’s hard to fathom when wars break out, but we between “different players in the ecosystem.” Technology
must consider them.

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is key but the basic human values and relationship is more Q: Any parting thoughts?
important. I won’t trust you because you build a blockchain;
I’ve been doing this for a while, and the problems haven’t
I’ll trust you because I trust you.
changed—we’ve developed new words to describe the
same problems like poor forecasts or bad transportation.
Unfortunately, each player in the external value chain
I’ve yet to find a new problem, but I’ve found new words to
often worries that providing information such as capacity,
describe them.
inventory, or internal operational efficiency metrics could
lead to someone else taking advantage of them. It’s a
But what makes me hopeful is that technology has evolved so
business strategy, and there’s nothing wrong with that, but
much. When I started 20 years back, we didn’t have access to
relationships can’t be that transactional. We will all be as
many technologies that enable prediction, scenario planning,
strong as the weakest link, so there has to be a feeling of
simulation, and visibility. We are seeing this technology drive
“we’re all one big family.” This way, if something breaks, you
business changes more and more.
can support them immediately.
The world is more complex and current technology
positions us to better handle this complexity. We’re in a
much better position.

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Adapting to continued supply chain disruptions: Peter
Liddell, Partner, KPMG.
Peter leads the Global Operations Centre of Excellence (incorporating supply chain, procurement &
advanced manufacturing) for KPMG. He has worked with clients across the Asia-Pacific region for
the past 33 years, where he has helped them to enhance their operational and financial performance.
Peter has designed and run large scale transformation programs that have driven value throughout
the clients’ portfolios by accelerating opportunities to mitigate excessive business complexity and
unnecessary operational costs, whilst helping them to position for growth and in accessing new
markets. His key areas of expertise include operational strategy; supply chain and logistics advisory;
business process analysis, improvement, and redesign; and project, change, and risk management.

Since joining KPMG, Peter worked in the consumer and industrial manufacturing sectors but has also
supported a broad range of clients across many other industries including automotive, life sciences,
retail, transport and logistics, telecommunications, energy, mining, and natural resources. Peter is also
currently leading the life sciences industry sector for KPMG in Asia Pacific.

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Q&A with Peter Liddell.

Q: Can you walk us through your view of the big We also don’t know how long the Russia-Ukraine conflict will
supply chain disruptors of the past 24 months? last or what simmering geopolitical issues could erupt in ways
that cause more disruptions. You just need one more issue to
Obviously, the biggest disruption was the pandemic. When
flare up and another major shipping lane might close down.
combined with other factors like the Russia-Ukraine conflict,
We’re definitely in for a bumpy 12 – 18 months at least.
they contributed to a near-total reduction in passenger freight
and significant reductions in ocean freight, too. The good news is that the global supply chain pressure index,
which measures supply chain stressors, indicates that the
The freight supply and demand equation was a common issue
problem has already peaked. How fast supply chain pressures
throughout the pandemic and during the recovery period. Plus,
come down is an open question—new or current geopolitical
geopolitical challenges like the Russia-Ukraine conflict also
conflicts not being resolved could make for a lengthier return
reshaped global supply chain flows, often adding significant
to normal.
lead time for most products shipped via ocean freight.
There are a number of global challenges contributing to the
Post-pandemic, we’ve seen the US and EU invest heavily
second wave of disruptions—for example, everyone is trying
in infrastructure projects to help rebuild their respective
to get their hands on construction materials and equipment,
economies. This has led to a run on manufacturing goods
which may slow down repairs and maintenance of critical
from China, causing shipping prices to rise at astronomical
assets or stall new capital projects (retail stores, distribution
rates and leading to containers getting backed up in major
centers, manufacturing sites, etc.).
global ports.
Additionally, many industries producing critical
Finally, in-country domestic supply chains were also disrupted
components such as semiconductors, packaging,
[for nations across the globe]. Ongoing COVID-19 outbreaks
raw materials, etc., haven’t fully caught up. And with
often reduced the availability of local workforces needed to
consumption so high, we could face shortages or run out
move goods within countries. Ultimately we’ve experienced
of critical production inputs. This could lead to more supply
a period of unbelievable growth in the demand for goods, yet
imbalances for critical industries.
limited supply of logistics, both globally and locally. This was a
perfect storm that I hadn’t seen in more than 30 years.

Q: Has the pain stopped? Or are we still facing a “One trend that we will definitely see
rough road? in 2023 is continuous disruption. And I
Unfortunately, no, it hasn’t stopped yet. One trend that we will also think that we’ll see a second wave
definitely see in 2023 is continuous disruption. And I also think
of supply chain risk.”
that we’ll see a second wave of supply chain risk.

Continuous disruption will be evident in a number of ways.

Organizations will continue to have trouble with transport
logistics as many of the global ocean freight providers haven't
yet caught up to the demand. Even if we can get all the
container ships we need into the ocean, we don’t always have
the crews available, so you’ll continue to have an imbalance of
supply and demand.

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Q: What was the critical factor for companies that Companies were initially urged by regulators, consumers,
adapted well? and financial institutions to focus on scope 1 and scope 2

If you peel the onion down a layer, you see that the companies emissions, but now, scope 3 will become a focus in 2023.

that did well likely had a lot of safety stock or inventory Companies need to find where carbon, waste, and high-

stockpiles. Many also turned to premium freight for faster energy use occurs throughout their extended supply chain

deliveries, however these strategies are not sustainable. There and devise strategies to mitigate their exposures.

was a lot of luck for many of them, to be frank.

One area where companies are investing is full supply chain

Today, companies have started to adapt by right-sizing digitization. Achieving end-to-end supply chain visibility

their supply chains. Many are looking at different sourcing provides real-time transparency into how products really

methods and revisiting where they do their manufacturing. For flow through the global supply chain, giving companies real

example, they may look at suppliers with really long, in-transit data on carbon, energy, and waste. A lot of companies think

times that they’ve always done business with and try to find they know how their products are flowing, but until they

a closer supplier in order to reduce lead time. It allows them to get the real data, they don’t actually know. Digitizing the

be much more agile, often waiting only 3 – 4 weeks instead of wider supply chain and generating real time supply chain

12 for critical supplies. analytics can help.

Q: What topics deserve more thought and attention

than they’re currently getting?
“Customers expect major companies they
Two come to mind. First, manufacturing footprint
buy from to have responsible sourcing.” considerations deserve some attention. With the
combination of inflationary pressures, high shipping costs,
and geopolitics putting pressure on energy and labor
Q: What role has environmental, social, and expenditures, we’re starting to see more investments
governance (ESG) played in supply chain thinking? into southeast Asian countries like Vietnam, Indonesia,

Well, pre-pandemic, board members and executive and Thailand. This signals a shift away from Chinese

teams spoke about ESG, but at best, it was more about manufacturing for many global corporations.

understanding and setting standards and then signing off

Second, we need to talk seriously about the workforce.
on end-of-year reports.
Two years ago, we were expecting enterprise-wide digital

But ESG has become a larger focus due to consumer transformation journeys. As companies continue this—by

behavior. You can read the studies: customers expect major shifting their enterprise resource planning (ERP) or other

companies they buy from to have responsible sourcing. Also, functional technologies to the cloud or putting more digital

the global investment community is starting to take action power behind procurement, operations, and broader

by calling companies out who greenwash, while refusing enterprise activities—they need to focus on how they will

to allocate funds for those not proactively addressing ESG. actively train the workforce or find people with the technical

They’ll also start to walk away from companies that lack know-how to handle these shifts.

good ESG governance.

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Developing agility in times of change: Joaquim Duarte
Oliveira, Supply Chain & Network Operations Leader,
Deloitte Portugal.

Joaquim is currently the Supply Chain & Network Operations Leader at Deloitte Portugal, bringing
17 years of consulting experience and has worked with clients across industries (life sciences, FMCG,
retail, manufacturing, automotive, construction, and utilities) and geographies in Europe (Portugal,
Netherlands, Belgium, Hungary, Czech Republic, and Slovakia) and Africa (Angola, Mozambique,
and Cape Verde). Joaquim has worked on multiple digital transformations programs and his core
competencies include supply chain planning (demand planning, supply planning, S&OP, S&OE, and
IBP), logistics transformation (3PL), smart factory (data & performance monitoring), digital customer
transformation, market entry and go-to-market strategy, and agile-driven transformations. In addition
to his client work, he has published some market studies related to direct-to-consumer—online
experience and last mile operations, smart factory, digitalization in automotive, and digital health
(prescription and reimbursement digital apps in Europe). He has earned a Global Executive MBA
from the IE Business School with a focus on entrepreneurship and managing global businesses.
Additionally, he has a business management degree from the Nova School of Business and
Economics and completed the Advanced Negotiation Programme “The Game Negotiation Dynamics”
from the NOVA School of Business and Economics.

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Q&A with Joaquim Duarte Oliveira.

Q: Reflecting on the past year, what have been the Q: What technology has been instrumental in terms
biggest challenges in supply chain management? of managing supply chain challenges?
The COVID-19 pandemic exposed serious vulnerabilities in Current technology is better able to support agile and
today’s highly efficient global supply chains. As COVID-19 resilient supply chain processes. Many technologies,
transitions to an endemic state, the world braces for still more including AI, machine learning, IoT, cloud computing, and
shocks and inflationary pressures driven by sanctions on data availability, are maturing and offer more capabilities at
Russia and uncertainty throughout Eastern Europe. a lower cost than before.

Clogged ports and empty store shelves around the world For instance, scenario planning, which requires handling
speak to the additional work companies must do to make an enormous amount of data, used to be an issue. The
their supply chains more resilient, even as they face pressure expansion of computing power and flexible visualization now
to hold down costs. These measures are important and enables both exception management and near real-time
necessary, but they miss another crucial element in supply scenario planning.
chain management: agility.
The breakthrough of exception-based planning is due to
Agility offers three important benefits: better and more the growing computational power that can handle big data
timely data for improved visibility, the ability to execute combined with increased machine learning capabilities,
faster than the competition, and more integrated, planning functionalities, and integrated data modeling
collaborative relationships with key supply chain partners. possibilities. Plus, today’s technology allows companies to
These benefits ultimately enable faster and better responses integrate planning layers and models to allow for end-to-end
to new opportunities. visibility and synchronized planning.

In the near future, the vast majority of activities in supply

Q: When it comes to managing supply chain issues,
chain planning will be handled by digital solutions, where
how have you seen teams adapt?
predictability, scenario planning, visibility, and agility are
The capabilities, key performance metrics, and performance
the key elements, leveraged through decision intelligence
expectations related to agility are not as standardized or well-
and automation.
defined as they are for supply chain efficiency. The focus on
agility will vary based on a company’s overall strategy and the
design of the supply chain to support that strategy.
“Many technologies, including AI,
However, in our experience, agility can be built in four
machine learning, IoT, cloud computing,
areas: demand sensing, collaborative relationships, process
integration, and information integration.
and data availability, are maturing and
offer more capabilities at a lower cost
Each area involves building new capabilities—but, more
importantly, they require an understanding of the role of
than before.”
agility in creating competitive advantage. Supply chain
managers must strike the right balance between agility,
resilience, and efficiency.

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Q: Which topics around supply chain management Also, the talent needed to implement new technologies is
aren’t getting enough focus among the press? just as rare and usually already [in high demand with low
Among organizations? supply]. How can you attract and retain these gems? At the

Talent is already hard to find and attract. While technology very least, make sure to offer them attractive career paths.

has advanced, supply chain teams need talented people with Present a perspective on the next steps they could take in a

skills fundamentally different from those expected of planners few years’ time, either in management or in commercial or

in the past. New hires must be able to think on a strategic and analytical functions.

tactical level about scenarios and risks, must have analytical

as well as communication skills, and be heavily market-
oriented. With skills like these, they might just as well work in
marketing or R&D.

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Shifting from output to outcomes: Vlad Filippov, Founder
and CEO, Spark Equation.
A seasoned technology industry professional with over 15 years of experience, Vlad Filippov
is the founder and CEO of Spark Equation, a product development and engineering company
based in Chicago that specializes in building intelligent products. Additionally, as the CTO of
Progress Retail, Vlad brings his expertise in data and decision intelligence to his role as a guest
lecturer at Depaul University. Vlad began his career as a self-taught engineer in logistics and
quickly rose to become one of the top logistics consultants for a leading transportation and
supply chain management provider. This experience sparked his passion for bridging the gap
between business and technology, leading him to establish Spark Equation. In his spare time,
Vlad enjoys spending time with his family, reading business and technology books, riding his
motorcycle, and being creative. He is passionate about helping others achieve their product
goals and is always looking for new opportunities to innovate and lead.

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Q&A with Vlad Filippov.

Q: What have the past few years revealed about our Second, employ technology to help with faster decision-
supply chains? making. To do this, you must ensure that data is available and
your processes are optimized. This means getting real-time
The pandemic was a once-in-a-lifetime black swan event
data so you can know what inputs lead to which outcomes.
that showed you can’t always rely on what worked in the
Often, this means combining many different paths together.
past five or ten years. Events demonstrated that businesses
need to be dynamic in their decision-making and resource
Companies need to shift focus from outputs to outcomes.
allocation to not only succeed but often to survive. Business-
They need to start tracking how they invest and direct
as-usual with five-year plans or long-term roadmaps just
resources and inputs, which requires real-time visibility and
won't work anymore. You’re either adapting, or you’re dying.
data into results. For example, if you plan to improve customer
satisfaction, how fast can you find that what you’re doing is
As we look to the future, I think complexities will only
working? Is it six months? If you only get that result later and
increase, and supply chain issues will have a more amplified
don’t track leading indicators, then you’re operating blind.
effect. Back in the day, businesses were more isolated. Now,
every business is connected, and a change or event affects
everything else. Businesses will need to keep track of more
Q: You’ve talked a little about interconnections.
moving parts in the supply chain. The last two years have
How do businesses go about being more connected
shown that being proactive can’t just be something you talk
with their suppliers?
about in the boardroom: you have to live it. In other words, Start with compatibility. Before you embark on any project,
you must walk the talk or become obsolete. the first thing to ask yourself is “will you be compatible?” If you
choose a software solution that can't connect to other players
in the market, you’ll fly solo.

“Business as usual with 5-year plans If you deploy a new product, you need to have API
or long-term roadmaps won’t work enablement built in from the get-go. A public API cannot be

anymore. You’re either adapting or an afterthought—you must have the connectivity upfront
as part of the architecture of your systems or process. This
you’re dying.” gives you adaptability.

If your process is too rigid and you’re not able to connect the
technology between your company and third parties, the core
Q: With that in mind, how should companies look to
of your business will be closed off and you won’t be able to
adapt to supply chain issues?
connect with the rest of the world. As soon as things start
First, there needs to be a mindset shift from backward- to
changing, your system might not be effective and you won’t
forward-looking. You need to be more proactive than reactive.
be able to adapt.
Companies must invest on three fronts: people, processes, and
technology. You need to invest in governance to move from
yearly planning to monthly planning. And train your people to
be more dynamic, and put that training and proactivity into
“Before you embark on any project,
reskilling the workforce as needed. the first thing to ask yourself is ‘Will
you be compatible?’”

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Q: What topics deserve more focus from companies Second, we need to talk about how we’ll solve the shortage
and the press than they currently get? of truck drivers. How do you solve that problem? Autonomous
vehicles? Training and incentives? If I’m not mistaken, many
Three things come to mind. First, we need to talk about how
truckers today are above 40 or 50. The industry is not getting
complex this industry is. Logistics is one of the most complex
younger, and they’ll be exiting the workforce.
disciplines. I wish the general public knew how many pieces
were involved, so they knew that if something happens in one
Finally, when looking for vendors, ask how they invest in
given part of the supply chain, it’ll affect everything else. The
technology. Instead of choosing the cheapest vendor, look for
public, for example, may want to move to electric vehicles, but
those who are investing in technology to be more sustainable
it’s a complex move—you can’t just switch them on overnight.
and efficient. Their products will be superior to the products of
a competitor in the long run.

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The role of technology and automation in supply chains.

Across these conversations, some common threads emerged: often have a mix of structured, semi-structured, and
predicted continued disruptions, the need for agility, the unstructured data scattered across a disjointed IT
importance of automation, the growing focus on ESG, and the environment. Sharing data with other companies who
benefits of greater data connections. are facing similar data challenges just intensifies your
own challenges.
The emphasis each expert placed on the importance of technology
and automation is particularly noteworthy. The right technology— A process automation platform with a data fabric puts
such as a process automation platform—is critical to helping you this issue to rest. Data fabrics let developers work with
meet challenges and become more agile and adaptable. data in a virtual environment rather than performing
extensive database programming. This lets them create
Solve the connection problem. usable, performant applications faster than with traditional
development, letting you connect systems and share data
As Filippov put it, “Start with compatibility.” Connecting
internally or across companies easily.
suppliers and sharing data is non-negotiable. Companies

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Automate critical tasks. With automation tools like business logic and AI, you can
enable software applications to make quick decisions on
Automation itself plays a big role in supply chain
your behalf. For instance, if supplies run low in a given region,
management. As Mavatoor put it, “Give machines the first
you can set up rules to either choose a different supplier or
right of refusal.”
approve premium freight costs to reduce lead times.
Process automation platforms offer multiple tools—including
robotic process automation, intelligent document processing, Next steps.
AI, and more—to transfer repeatable processes to machines.
In the face of so much ambiguity, the right tools in your corner
This helps boost efficiency, increase margins, and sharpen
can help you not only withstand times of change, but turn
your competitive advantage. Plus, you get more from your
them into opportunities for competitive advantage. And it
current workforce, alleviating labor shortage pains.
doesn’t take an army of developers—it only takes a few.

Boost visibility. An enterprise-grade process automation platform can help.

Appian offers four key capabilities:
Connecting your own systems and integrating with your
suppliers’ IT environments gives you greater transparency
• A data fabric to help unify data from multiple sources
and enables you to make adaptive choices faster. As Liddell
quickly, easily, and securely.
predicted, “Digitizing the wider supply chain and generating
• Process automation tools to help connect people, AI, bots,
real-time supply chain analytics can help.”
and business logic for end-to-end process automation.
A process automation platform can help you collect data
• A seamless total experience for users across web and
from across the supply chain, then combine information and
mobile devices.
analytics in a centralized location. With this capability at your
• Process mining tools to identify bottlenecks, non-
fingertips, you’ll notice problems in your supply chain sooner
conformances, and root cause issues using real-world data.
and be empowered to take informed action.

With Appian, you can get your first supply chain application
Increase adaptability.
built for your organization in just eight weeks. Guaranteed.
As Oliveira put it, “In the near future, the vast majority of
activities in supply chain planning will be handled by digital Learn more by visiting appian.com/supplychain.
solutions, where predictability, scenario planning, visibility,
and agility are the key elements, leveraged through decision
intelligence and automation.”

appian.com | 17
About Appian
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