From Supply Chain to Supply Web
“We don’t really have a supply chain anymore,” said David Sheldon, global supply chain development manager at Nestle SA, in a recent podcast. “I don’t think anybody has a supply chain anymore.”
Nestle may be a 150 year-old company but it aims to be cutting aims to be cutting edge when it comes to its supply chain. But if the Fortune 500 company no longer has a supply chain, what has come to replace it?
“You have a supply web,” Sheldon explained, “and it’s very interconnected and it’s very long and deep, and information needs to flow around that web. And as an industry, we’ve only started taking the baby steps needed to put in place some of the standards and infrastructure and know-how to make it happen but that’s the direction we’re going.”
Technology, of course, is part of the picture when it comes to tranforming a supply chain into a supply web. “You see small suppliers and farmers are able to do things which even five to ten years ago would have been considered beyond them, through the use of apps and smartphones and simple but very powerful technology,” said Sheldon. “So I think that is happening, and I don’t know, it’s too early to tell if it’s been a real cultural change in the industry, although I do detect much more willingness to work together to help meet society’s needs and objectives beyond being a profitable company, and being a profitable company is part of meeting society’s needs and objectives as well, but definitely the technology’s helping.”
Increasingly, the supply chain is being asked to respond to external changes, whether being driven by consumers or technology. That leads to the three main challenges managing Nestle’s supply chain, according to Sheldon: “maintaining operational excellence across all our supply chain, delighting consumers and customers wherever we can, and making sure that we’re available when they want to buy our products.”
Technology helps in these areas also, but “also to challenge ourselves in how we can do things differently and look for some breakthrough insights and innovation that are out there and how do we apply them. Nestlé has a program of continuous improvement, Sheldon noted, “but we’ve also got a program with fostering and encouraging breakthrough and disruptive ideas and innovations in our supply chain,” an initiative that’s been in place for around two years.
“We’ve created is a bottom-up approach to supply chain innovation,” Sheldon said. “We encourage all our 36,000 people in the supply chain to get involved in innovation.
The company also gives them a place to do that, an online collaborative platform. Nestle has also put in place the processes needed to take those ideas, evaluate them, assess them and move them into testing and pilots. “We’re quite pleased with the progress we’ve made,” Sheldon said. “Of course there’s always more we could do.”