Dr. Muddassir Ahmed on why soft skills are vital for today’s supply chain professionals
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Dr. Muddassir Ahmed is a manufacturing operations, procurement and supply chain leader with international multi-site manufacturing experience in electrical, hydraulics and internet industries. He’s also a popular blogger, vlogger and supply chain digitalization evangelist with over 50,000 followers on LinkedIn.
During this month’s Alcott Global Makers and Movers event, Muddassir provided insights on manufacturing supply chain difficulties as well as diversifying sourcing portfolios.
In this interview, we too focused on these themes, but there was also plenty of time to talk about supply chain education, a topic Muddassir is evidently passionate about.
Read on to find out:
- what Muddassir believes to be the biggest obstacles in manufacturing supply chains
- whether 3D-printing can help to overcome some of these obstacles
- how many years the pandemic has pushed forward digitalization in the supply chain and logistics industry
- how one can enhance their sourcing portfolio for supply chain resilience
- the two categories of people Muddassir sees in the logistics and supply chain sector
- what needs to be done to improve education for the supply chain professionals of the future
Hi Muddassir, thanks for taking the time to talk to us at Trans.INFO. The last year and a half has seen logistics and supply chain leaders severely tested with several huge challenges, from the pandemic to container shortages, Brexit, and the Suez canal incident. Will things inevitably ‘calm down’? Or are problems such as these simply normal?
Well, if I had some kind of macroeconomic or microeconomic indicators to predict the future, I’d be a millionaire by now. I don’t think anybody can predict what will happen with any level of certainty. Having said that, there’s two ways you can deal with a period [of crisis] like this.
One is to let nature take its course, and it will basically be refined eventually – that’s what happened about 100 years ago during other pandemics, or what happened after the 2008 financial crisis.
The second thing is to force the issue and get it right. I think what we have seen happen in this pandemic is people not forcing the issue and just letting things flow. So it is normalizing, I think, to a certain extent, people are learning to live as well [with the situation caused by the virus].
But until we have normal levels of travel and business transactions, which is not expected to happen before the end of 2022 to early 2023, I think things will be better.
People are getting less scared; I think the USA and the UAE are going quite well right now. So they are slowly and gradually normalizing. Having said that, if you’re going to continue to have covid variants and outbreaks like in South Africa and now with India and Pakistan, it’s going to be difficult, right?
And then global events need to happen, events like the Olympics in Tokyo, the Expo 2021 in Dubai and the Football World Cup. Once we see those global events happening, then I think it shall be fine. However, until then I think we’ll just have to battle on and survive.
One of the areas you talked about during the Alcott Global Makers and Movers conference was the challenges faced by manufacturers at this moment in time. When it comes to manufacturing supply chains, what are the biggest hurdles that need to be overcome?
The biggest challenge we have right now is demand planning.
Generally, demand planning or forecasting demands of some sort relies on historical data. This is true regardless of what method you use. You could use statistical methods, you could use machine learning or artificial intelligence. It all relies on historical data. As the saying goes, your historical data represents the future.
What’s happened though is that the historical data of the last 18 months has been hugely distorted because of the issues or the scenarios we mentioned earlier. So we don’t have any historical data to make accurate predictions.
So we’re trying to understand what’s happening in the market, and the market is extremely volatile from country to country, region to region and product to product. Because of that, we have lack of demand visibility, which in turn leads to uncertainty, which leads to lack of supply planning, which leads to poor capacity planning, which leads to poor customer service, and which leads to businesses essentially losing money. Then, when businesses lose money, they cut costs.
There are nonetheless some players who are really benefiting from this uncertainty; e-commerce for example. E-commerce has been boosted hugely, whether it be clothing retailers, Amazon or whoever. The demand shot up so much, they just sort of somehow have to cope with the increase in people sitting and ordering items online.
So, when it comes to manufacturing, the biggest issue right now is understanding demand, either via any qualitative method or quantitative method. Once we try to figure that out, then we can continue to chase that demand.
It really was a huge issue, if you look at the company I work for, and work with, there were hardly any orders last year until October. But now, there’s so many orders that we just simply cannot supply.
What you want is a level of equilibrium, you need a level of stability. What you don’t want to be in is a situation where you have no demand at all, or too much demand. Neither of those is a good situation to be in. What we want to have is some level of stability, which will only happen when things are a bit less volatile in the market.
To what extent has the pandemic truly driven digitalization in the supply chain and logistics industry?
What we all want to achieve is a level of extended integration, extended enterprise integration. I like to know what the supply chain is doing, I like to know what customers are doing. So once I know what both these two parties are doing, that means I can plan things better – whatever the products or services I’m supplying.
What covid has done is force businesses to go digital, because they can’t be in the office, they can’t be turning to a supplier, and they can’t be really talking to customers. This has just naturally caused them to work and gather information digitally, It has led to a level of acceleration in the utilization of both internal and external processes.
This has really forced the issue; I think it has reduced the whole digitization journey by about three to four years. This is a very good thing, as it means we’ll have better downstream integration in terms of customer demand, inventory and other issues. It has been accelerated, which helps with doing business.
Any technology, especially cloud technology, is embedded. People are looking into what kind of processes we can digitalise. That’s a project I’ve done as well, from end-to-end data validation of the order to shipment, digitalizing all the shipping documents.
Why? Because you have to get a shipping document to a customer and you can’t do it anymore because people can’t come to the office to stamp the document. So we had to find a way to digitize those documents. You are taking out a big task in the process of doing so.
Now that databases, documentation and information flow is substantiated mainly around cloud technologies, it’s great. The more data, the more visibility, which means there’s better opportunities for automation. More automation means you can use the basics of machine learning quite a bit better too. So that’s one thing.
Another key point is that people are willing to spend money now on the tools and software which will give them better visibility, which they wouldn’t have done previously before covid. So the pandemic has accelerated the adoption of the big data tools and software which was already available but not as widely accepted or required as it is right now.
To what extent do you feel 3d-printing could help alleviate some of the issues faced by manufacturing supply chains?
The concept of 3D printing literally has just existed for around 20 years and has pushed through into the specialized manufacturing in the last 10 years.
I was working for the aerospace business around 2014-15. We tried to buy some manufacturing machines to supply our after sales market and also do prototyping using molds and other items.
The issue with 3D printing is that the technology is currently just not fast enough and good enough compared to mass production technologies. Since the technology is not good enough to replace any mass production technology, then you are left with the areas where mass production technologies are not cost effective or don’t work well.
So what are those areas? Prototyping is one example, then there’s newer development design and product design. Of course, this includes the creative elements of product design, or after sales.
For example, if you work for an aerospace company, you have to commit to supply the part to the lifecycle of the aeroplane, which is around 20-30 years. You’re not going to produce parts and put them into stock for 20 years, it’s not going to happen.
So this is where 3D printing comes in as a good solution, because if you get any long demand, and you have the design in place, you can print. And as long as the part you are producing fits into the spec of the product, that means that from the reliability and quality perspective, we are good to go.
On the other hand, 3D printing in some places is not good enough to produce parts which have the same abilities and qualities. So you can lead with 3D printing in more adventurous creative areas like art and design and things like that.
There is a huge drive and motivation with 3D printing, and there has been money invested in the business I work with, but it’s just somehow not yet come to the level where it can be attractive and consistent for business use in manufacturing.
Another area you touched on during the conference is the impact that diversing one’s sourcing portfolio can have. How should one go about enhancing their sourcing portfolio?
This is a big topic, so I’m going to give you a high level view on this, even if the points are somewhat contradictory.
If you ask any hardcore procurement guys, they will talk about consolidation of supply. Consolidation of supply means working with suppliers to have more from one supplier, which will leverage things better and drive costs down. However, in this situation you potentially have all your eggs in one basket, and has happened in the past, be hit in the face in the event a problem arises.
Another option is to have a divided portfolio of suppliers, so when some troubles occur with one supplier, you can fall back on the second one.
Also, when the supply chain was temporarily on hold for a while during the pandemic, it drove the push for a return from horizontal integration to vertical integration. A number of companies had their key products and key processes outsourced to a certain extent because they didn’t think it was their core competency. Now they suddenly realized they needed to find a way to bring their supply chain in house. Therefore, there is a rethinking happening right now in terms of what sub processes and products can be localized.
The thing is that the cost is now becoming a level playing field. There is a good example where companies in the western world have actually committed to sourcing locally, and that still hasn’t been completed yet.
We’ve seen the whole situation with the pandemic in China or Southeast Asia. For example, the textile industry in India and Pakistan was moving like crazy six months ago, but right now they’re struggling, because they don’t have people in the factories. These countries are suffering.
So, like most things in life, there is no right answer, but the best way to go about things is to have a clear study of what you want to be, so if you want to go towards consolidation with your suppliers, by all means do so, but then you have to have your contingency planning in place. In case something like a pandemic happens, you need to know what you want to do.
Alternatively, if you are leaning more towards diversifying the sourcing strategy, that’s fine too. But then, how are you going to maintain your cost competitiveness? Because it’s also become a challenge when you do that. It’s all linked to your business strategy.
I think when the right supply chain people think this through, they know their business model. And depending on this model, they then choose the best sourcing options.
If I may, I’d like to turn towards education now, as a noticeable amount of your written work is tailored to supply chain and logistics graduates. Given the manner in which supply chain management and logistics is evolving so quickly, what challenges does this present to academic institutions and educators involved in training the supply chain professionals of tomorrow?
This is a very interesting question, so let me let me elaborate on this.
If we think about what’s available in terms of traditional supply chain university education, there’s two types of institutions.
Firstly, I’ve done a matrix that says there are 50 plus universities who offer a Master’s in supply chain and logistics as well as what courses they offer. So this is one institution. The other is the likes of the Association of Supply Chain Management and Institute of Supply Chain Management in the USA, or the Chartered Institute of Procurement & Supply in the UK. Those are the three famous ones and there are a few more in secondary and tertiary scale.
In my experience, there’s also two kinds of people working in supply chain. There’s those who happen to fall into the supply chain sector by luck, and those who consciously choose to have a career in supply chain. I did a survey on this with my LinkedIn followers and made a YouTube video with the figures; it turned out that 62% were the latter and 38% were the former.
However, I think those figures are wrong, I believe the ratio is really around 50-50.
The people who enter the supply chain by luck, once they’re here and they like this, they think “oh I need to educate myself because I need a promotion,” or to earn more money or basically to know what I’m doing. Then they go to these Institutions and dish out a lot of money for certification that takes a long amount of time to complete.
Alternatively, people who’ve chosen to go into supply chain because of their parents and mentors, like myself, will go to a university like MIT and then do the Masters in supply chain. So they are there by education.
The problem I see with this group is that the knowledge is not updated. And if you review the knowledge content, the knowledge content is still very much from the nineties and the noughties. They still talk about supply chain competencies, or demand forecasting or logistics.
Now, I’m not saying this is no good, in fact, it’s all good. However, when you take this knowledge content that they’re providing at universities and the leading institutions we mentioned, and try to marry them up with the current requirements of the supply chain, there is a big gap.
In every conversation including this one, we have talks about the technological advancement of the supply chain, and how technology will play in the development or risk mitigation of the supply chain. And this is where many of the supply chain people I know lack the awareness and technological know-how to understand which technology is most most suitable to which part of the supply chain.
For example, people just start throwing out the ‘blockchain’ word. I can assure you that if you talk to 100 people in supply chain who used the word ‘blockchain’, 99 of them cannot even explain to you how we can use the technology of the distributed ledger to do the transition between the parties in supply chain – they can’t explain it. And If you can’t explain it, then you don’t know which application you are going to use. Are you going to use blockchain to move your bill of lading for instance? Or to eliminate LC openings to secure payments? Where are you actually going to use it?
Similarly, everybody is talking about the IoT and industry 4.0. Okay, that’s great, but do you actually know what are the right applications? Are we talking about smart containers only? Are we using smart manufacturing extensively? Are we saying we are just going to apply some IoT in sourcing? We cannot apply IoT in sourcing can we?. The issue is that the understanding and the use of technology into the right supply chain application needs to merge.
When it comes to working in the supply chain, there are 3 key areas of skills and knowledge that are important. The first is knowledge of the core competencies, while technological know-how is the second. However, the third one, which Radu [Palamariu] and myself are very much driving forward, regards soft skills.
Some people are trying to make supply chain like physics. But once you go into the business of supply chain, and you know supply chain managers, procurement managers and logistics managers, you will notice we actually manage information. When we manage information, that means we are managing relationships – basic business relationships with people.
Managing stakeholders upwards, downwards and sideways. Managing relationships with customers and suppliers. All these relationships become part of management. Knowledge Management is more about soft skills, social media, emotional intelligence – how you speak, how you communicate, how you write, how you build your network, how you do your presentation. The ability to convince others and to negotiate.
All of those are soft skills, which are not taught again in the conventional supply chain education. So for me, it is the third circle that needs to be at the forefront of supply chain education.
Lesson two is to say to people that although base knowledge is great, without technological know-how you’re not going to move towards the more advanced level of supply chain that’s needed right now. Similarly, since we manage relationships, and there is a level of art and science involved, they need to bring their soft skills and presentation skills. That’s the point I’m making, it’s about how you present yourself, and that applies both inside and outside your business.
A lot of supply-chain people may complain and say they are not progressing or not going to be considered for C-level. The reason you’re not considered for the C-level is because you’re not hitting necessary requirements, your supply chain knowledge is just not enough to get to you C-Level, you need to develop “other supply chain skills” to be considered at C-level.
So in summary, what we’re trying to do is to get people to the next level of thinking in terms of technological know-how and soft skills.
One final point I’d like to make here is that the basic supply chain knowledge which has been there for the last 20 years should be free in my opinion. Apex charges $1,600 for a book and $1,600 for the exam. For me, that knowledge can be found online by someone good at googling. Honestly, I’m not joking.
For me, the aim is to make the critical supply chain knowledge as mention above as cheaply available as possible to the widest possible audience. This is my aim of SCMDOJO in the next five years.