The world has got­ten a crash course in sup­ply chain man­age­ment in recent years. The ques­tion now is how do we respond? The cold hard costs and deeply felt impacts of sup­ply chain dis­rup­tion have ele­vat­ed the issue as an urgent busi­ness pri­or­i­ty. The hyper-con­nect­ed nature of the glob­al econ­o­my has meant that, from Covid-fuelled sup­ply short­ages to cyber­se­cu­ri­ty attacks, when sup­ply chains are hit the rip­ple effects spread fast and far.

So much so that glob­al sup­ply chain dis­rup­tions are now cost­ing large com­pa­nies $184m a year on aver­age, accord­ing to a recent study by Interos, the oper­a­tional resilience com­pa­ny. Near­ly all (94%) of the 900 senior IT, secu­ri­ty and pro­cure­ment deci­sion-mak­ers sur­veyed report­ed some neg­a­tive impact to rev­enue result­ing from sup­ply chain dis­rup­tion. They cit­ed a vari­ety of sup­ply chain risks includ­ing cyber breach­es, finan­cial risks and ESG (envi­ron­ment, social, gov­er­nance) trans­paren­cy issues.

A board-level challenge

Cru­cial­ly, sup­ply chain shocks don’t just impact rev­enue and prof­itabil­i­ty. They can also be dam­ag­ing to pub­lic per­cep­tion and con­fi­dence. 83% of sur­vey respon­dents report­ed that their firm has suf­fered rep­u­ta­tion­al harm as a result of sup­ply chain dis­rup­tion. Mean­while, cor­po­rate boards are new­ly focused on what’s hap­pen­ing behind the dash­boards, ask­ing the C‑suite dif­fi­cult sup­ply ques­tions 20 to 24 times a year, accord­ing to Interos’s research.

“In the past we worked pri­mar­i­ly with pro­cure­ment and com­pli­ance teams. Now every­one we part­ner with at com­pa­nies are in the C‑suite. Sup­ply chain issues are land­ing on CEO and board desks more so than any time dur­ing my 25-plus years in this indus­try,” says Jen­nifer Bis­ceglie, founder and CEO of Interos, whose AI-pow­ered plat­form maps, mon­i­tors and mod­els glob­al sup­ply chains. “But also, for the first time, ordi­nary peo­ple are talk­ing about sup­ply chain prob­lems. The Covid-19 cri­sis meant they couldn’t get vital clean­ing sup­plies and toi­let paper. That sud­den­ly made it per­son­al.

“There’s grow­ing acknowl­edge­ment that every busi­ness is only as strong as its sup­ply chain. It’s the fun­da­men­tal enabler of any company’s mis­sion, day-to-day oper­a­tions and long-term growth agen­da. If you look at what’s hap­pen­ing with ESG goals, too, exec­u­tive com­pen­sa­tion is now being tied to sup­ply chain met­rics. There’s height­ened aware­ness of just how impor­tant these unseen glob­al net­works are to a busi­ness.”

Though the fragili­ties exposed in sup­ply chains dur­ing the pan­dem­ic were stark, it’s impor­tant for organ­i­sa­tions to realise, and explic­it­ly acknowl­edge, that those sup­ply chains per­formed how they were built to oper­ate – short, tight and just in time. The flaws in tra­di­tion­al sup­ply chain process­es, which sig­nif­i­cant­ly lack vis­i­bil­i­ty, were evi­dent pre­vi­ous­ly, but it took a black swan event in the form of a glob­al pan­dem­ic to final­ly break them.

Optimising at ‘click speed’

Designed for effi­cien­cy at the cost of fragili­ty, the break­ing of glob­al sup­ply chains now presents an oppor­tu­ni­ty to rebuild them for strength, agili­ty and resilience. We’ve seen the extent to which mar­kets rely on sup­ply chains not just to deliv­er prod­ucts – but to sta­bilise and secure the well­be­ing of people’s liveli­hoods. Tru­ly resilient sup­ply chains that thrive in a hyper-con­nect­ed econ­o­my can’t be achieved overnight, how­ev­er. Build­ing a safer and more secure glob­al econ­o­my requires an intel­lec­tu­al, cul­tur­al and gov­ern­ment pol­i­cy shift. It must be led from the top as a board and gov­ern­ment pri­or­i­ty with shared respon­si­bil­i­ty across the C‑suite and nation­al lead­er­ship, along­side invest­ment in the tech­nolo­gies that pow­er intel­li­gent sup­ply chains.

“Sup­ply chains must be con­tin­u­al­ly opti­mised at ‘click speed’ because that’s how events and cus­tomer demand hap­pens glob­al­ly. Sup­pli­er rela­tion­ships are exten­sive, con­nect­ing one com­pa­ny to the next across mul­ti­ple lay­ers. Under­stand­ing how to track and lever­age that hyper-con­nec­tiv­i­ty as a strength is key,” says Bis­ceglie. “Ulti­mate­ly, these vast net­works are a big data prob­lem. They’re not some­thing that can be analysed by humans any more using annu­al sur­veys or oth­er man­u­al tools. The solu­tion comes down to arti­fi­cial intel­li­gence. It’s a 24–7 tech­nol­o­gy with no lag time that can process large data sets so organ­i­sa­tions can see and pre-solve dis­rup­tive inci­dents.”

Pow­ered by AI and machine learn­ing, Interos is rein­vent­ing how organ­i­sa­tions man­age their sup­ply chains through the company’s Oper­a­tional Resilience Cloud. It can mod­el the entire ecosys­tems of com­plex busi­ness­es, down to any sin­gle sup­pli­er, into a liv­ing glob­al map. By vast­ly enhanc­ing vis­i­bil­i­ty across the sup­ply chain, Interos helps reduce risk and avoid dis­rup­tion, while also uncov­er­ing new oppor­tu­ni­ties for com­pa­nies to ben­e­fit from sup­pli­er rela­tion­ships.

Mapping the sub-tier

The tech­nol­o­gy not only con­tin­u­ous­ly maps sub-tier rela­tion­ships in an organisation’s sup­ply chain, but also mon­i­tors glob­al events that might impact their busi­ness. Using AI, it helps organ­i­sa­tions under­stand who is in their sup­ply chain, the impli­ca­tions of those rela­tion­ships, and whether any actions are required.

“We do that every day – map, mon­i­tor and mod­el,” says Bis­ceglie. “The core idea from an oper­a­tional resilience per­spec­tive, is to be able to pre-solve or pre-empt cost­ly dis­rup­tions. Over the last 18 months with Covid, we dis­cov­ered the true threat posed by con­cen­tra­tion risk, an over-reliance on cer­tain organ­i­sa­tions or coun­tries. It also laid bare the finan­cial insta­bil­i­ty of our sup­ply chains.

“You can also look at glob­al cyber breach­es, such as Solar­Winds, where an attack on one rapid­ly became a breach of glob­al pro­por­tions. Or con­sid­er the Suez Canal cri­sis, which demon­strat­ed the enor­mous glob­al impact of a sin­gle ship stop­page. When one of these activ­i­ties occurs we need the abil­i­ty to under­stand how it affects our sup­ply chains and what to do, in real time. The future of the sup­ply chain is true oper­a­tional resilience. That means pre-plan­ning for dis­rup­tions so that when the unex­pect­ed hap­pens, you already know how to respond. The com­pa­nies that under­stand and act on this intel­li­gence will be at an advan­tage.”

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Bridging the gap

Jen­nifer Bis­ceglie, founder and CEO of Interos, which recent­ly gained ‘uni­corn’ sta­tus fol­low­ing its Series C fund­ing round, out­lines the impor­tance of diverse lead­er­ship

Your com­pa­ny has thrived dur­ing a peri­od of inabil­i­ty. What advice do you have for oth­er lead­ers still work­ing through hard times?

Our suc­cess is based on focus. The com­pa­ny is 17 years old. Like any start­up, we’ve over­come chal­lenges to get to where we are. We’ve always stayed sin­gu­lar­ly focused on solv­ing the prob­lem of trans­paren­cy in the sup­ply chain to help organ­i­sa­tions pre-solve prob­lems and cre­ate more val­ue from their rela­tion­ships. Some entre­pre­neurs suf­fer from ‘shiny pen­ny syn­drome’, where you’re con­stant­ly dis­tract­ed by new ways to grow rev­enue.

My advice is to main­tain focus and have the for­ti­tude to under­stand you’re on the right path and solv­ing a real prob­lem. When I grad­u­at­ed col­lege, I was intro­duced to the nexus of tech­nol­o­gy and sup­ply chain, and I iden­ti­fied a clear gap. Every­one was focused on tech­nol­o­gy with­in the sup­ply chain and with­in the com­pa­ny but not between busi­ness­es them­selves. Those rela­tion­ships have impor­tant impli­ca­tions for who can ulti­mate­ly access your prod­ucts or ser­vices. We nev­er lost sight of that gap.

As one of the few female founders who has built a uni­corn busi­ness (val­ued at over $1bn), what would you say to oth­er women aspir­ing to that suc­cess?

I’m a big fan of the say­ing ‘if you can see it, you can be it’. The fact that Interos was able to achieve uni­corn sta­tus comes down to two things. One is real­is­ing this is just the begin­ning of our jour­ney. It’s cer­tain­ly not the end. Being a uni­corn comes with sig­nif­i­cant respon­si­bil­i­ty to build and grow your val­u­a­tion. The sec­ond thing, for the lead­ers com­ing after us, is now you know it’s pos­si­ble. Sur­round your­self with true believ­ers in the mis­sion and appre­ci­at­ing the fact that this can hap­pen to you is impor­tant. I just want­ed to be the best leader, female or oth­er­wise. I tru­ly believe that we all have that oppor­tu­ni­ty.

What should oth­er tech com­pa­nies be doing to bridge the gen­der gap?

We’re see­ing dif­fer­ent coun­tries and com­pa­nies glob­al­ly pass­ing laws to enforce diver­si­ty bench­marks, which is pos­i­tive. These actions must be pur­pose­ful and sup­port­ed by defined track­ing process­es. I believe if you can’t find the right can­di­date for a role, you should be think­ing about how to cre­ate a pipeline, out­side of your tra­di­tion­al chan­nels if nec­es­sary, so you can edu­cate, ele­vate and men­tor the diver­si­ty into that role.

There are mul­ti­ple ways to get at diver­si­ty and it can’t sim­ply be a com­pli­ance activ­i­ty. Diver­si­ty of peo­ple, expe­ri­ence and thought strength­ens com­pa­nies and dri­ves inno­va­tion. It’s an ongo­ing goal, not a one-time activ­i­ty. It’s incum­bent on all of us and it’s some­thing we take very seri­ous­ly at Interos. We have a tar­get of a 50–50 gen­der split by 2025. We mea­sure that in our quar­ter­ly board meet­ings. Even though we’re not a big com­pa­ny we believe in it and have set that man­date.

What are your thoughts on the grow­ing con­cerns over eth­i­cal sup­ply chain behav­iour – are we real­ly poised for change?

We’re start­ing to see change, not least because there are now exec­u­tives in list­ed com­pa­nies whose com­pen­sa­tions are direct­ly tied to eth­i­cal sup­ply chain behav­iour. We’re see­ing that top-lev­el sto­ry in the press, but I think the fol­low-up audit and exe­cu­tion still needs to be report­ed on. It’s mov­ing in the right direc­tion, how­ev­er.

I also think it’s inter­est­ing, as you look around the world, that dif­fer­ent regions define it dif­fer­ent­ly. In EMEA we typ­i­cal­ly see empha­sis on car­bon foot­print. In Africa, child labour is a chief con­cern. And in the Unit­ed States it’s more focused on sup­pli­er diver­si­ty. Giv­ing dif­fer­ent regions the pow­er to make an impact is so impor­tant, and mea­sur­ing and report­ing their gains is just as essen­tial.

We’re also see­ing progress when com­pa­nies are ready to go pub­lic. Eth­i­cal sup­ply chains are no longer giv­en pass­ing men­tions in 10‑K fil­ings; it’s some­thing com­pa­nies analyse and report out. Sup­ply chains become a source of com­pet­i­tive advan­tage as com­pa­nies invest in them.

There’s increas­ing expo­sure at the retail lev­el as well. Many web­sites, espe­cial­ly con­sumer sites, allow peo­ple to under­stand the exact prove­nance of a sneak­er or their cof­fee beans. Think about how that empow­ers them. They’re able to dri­ve eth­i­cal sourc­ing and sup­ply chain trans­paren­cy by buy­ing into com­pa­nies who pri­ori­tise it. We’re going to see much more of this trans­paren­cy under­pin­ning com­pa­ny rep­u­ta­tion and per­for­mance in the future.

Sup­ply chain dis­rup­tions cost organ­i­sa­tions an aver­age of £134m annu­al­ly. For more infor­ma­tion on how you can elim­i­nate this cost, reduce risk, avoid dis­rup­tions and achieve supe­ri­or enter­prise adapt­abil­i­ty, vis­it Interos.ai

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Pro­mot­ed by Interos