Organisations hoping to successfully manage global supply chain disruption will need to delegate more responsibility to procurement teams, an event at Davos was told.
However, this will require procurement teams to upgrade skills, understand the impact of disruption and effectively manage supply chains.
Kumar M. Birla, group chairman of multinational conglomerate the Aditya Birla Group, said alongside training for procurement it was necessary to increase supply chain visibility through digitalisation and diversify suppliers.
“You need a huge amount of delegation for the whole procurement side of your business,” he said. “It needs to be upgraded in terms of skillsets, they need to understand how disparate events from across the globe can impact your particular industry.
“We should be creating optionalities. We have a large manufacturing base in India and across 36 different countries. What we have decided to do is to digitise. You need to have more visibility across the value chain, from the point of supply to the customer. The other is to diversify. You need more and more places to source from, different geographies to source from.”
Speaking as part of a panel discussion on balancing globalisation and resilience at the World Economic Forum’s annual meeting, Birla said: “I don’t think there will be a reversal of globalisation. That shouldn’t be happening.”
Frank Appel, CEO of Deutsche Post DHL, said globalisation was simply too convenient and cheap for disruption to stop it. He emphasised consumers wouldn’t care about responsibly-produced products if they had to pay twice the price. “The labour-cost difference, the productivity difference. Globalisation has helped the world to become more wealthy, to take more people out of poverty, and that I think will continue,” he said.
Jagjit Singh Srai, director of research at Unversity of Cambridge’s Institute for Manufacturing, said: “Rather than a question of whether globalisation is going to slow down or stop, I think we’re going to see a different form of globalisation.”
Carmine Di Sibio, global chairman and CEO of professional services network Ernst & Young, added: “Globalisation is here to stay. Anyone who thinks it’s going to go away, we’re way too connected, economically, technology-wise, for globalisation to go away. Russia-Ukraine is causing a shift, in terms of globalisation, geopolitical issues with China are causing a shift. Isolationism doesn’t work.”
☛ Want to stay up to date with the news? Sign up to our daily bulletin.
