Welcome to the first installment of Supply Chain Spotlight, Elementum’s interview series. We speak with the most influential people in today’s global supply chain. Each interview is a conversation about the most important topics and tasks facing supply chain professionals all over the world.
As Chair (Full Professor) in Supply Chain Strategy at the Centre for Logistics and Supply Chain Management, Cranfield School of Management UK, Richard Wilding, OBE works with European and International companies on Logistics and Supply Chain projects in all sectors. He is a highly acclaimed presenter and regularly speaks at Industrial Conferences and has undertaken lecture tours of Europe and Asia at the invitation of local Universities & Confederations of Industry. He has published widely in the area of Supply Chain Management and is Editorial Advisor to a number of top journals in this area. Read further for some insights on how to innovate with history in mind—and a little bit of British/American rivalry.
Richard Wilding did not seek out a career in supply chain.
Like most logistics managers, he said, he stumbled into studying logistics and transportation from another industry. Wilding was introduced to the supply chain of raw materials at the early stages of his career when he worked as a materials engineer. Starting with the ceramic industry and later the metals industry, he oversaw raw materials “coming out of the ground, manufacturing the product and also distribution to customers.”
Today, Professor Wilding, OBE is focused on making a difference in industry. He lectures, conducts speaking engagements, consults with numerous companies, and serves and advises boards across the country on transport logistics and supply chain. He’s a busy guy and a big supply chain influence in Europe. I sat down to speak with him about what he loves about working in supply chain.
Lessons from the Past
Professor Wilding gets to interact with history every day. As the Chairman of the Chartered Institute of Logistics and Transport, Wilding deals with membership organisations that are hundreds of years old. In the UK, some logistics laws have roots as early as early as 1272—to the Middle Ages, when people would take carts of inventory into London. Wilding said that the profession of logistics and transport in England follows in the footsteps of countless generations of merchants and movers.
The arms of the Worshipful Company of Carmen founded in 1517
“These chartered institutions—the Royal Charters come from the Queen. These are learned societies and support professions. They’re not all about transport & logistics—they’re also very much about networking and supporting the industry,” said Wilding. He believes that the tradition ingrained in the British transport, logistics and supply chain system—while sometimes stifling—actually serves to inspire change. “One of the key things that I argue is that innovation is about getting ideas that are new to you, and then using them to create social, economic, or political value. That’s why these institutions are so important. How are you getting new ideas? If you think about Transport community in London—senior people get together to network, they share ideas. You take existing ideas and create value in a different context. It’s a very powerful way for people to get together to manage problems.”
“Innovation is about getting ideas that are new to you, and then using them to create social, economic, or political value. How are you getting those ideas?”
Take the Carmen of 1517, for example—one of the livery companies in England is the Worshipful Company of Carmen, which was founded to deal with the huge influx of carmen (cart drivers) coming into London to trade. “If you think that in 1272 all the streets of London were so congested with carts, they had to start putting in rules so that people could bring their carts into London. This sounds like a very familiar problem—now it’s people with vans and trucks.” London now has a congestion charge to ease traffic—but it’s hardly a new idea. “You could argue that the Carmen introduced the early congestion charges and control: you had to have a brand on your cart and the year that was authorized by the Crown.”
Cart Marking is an annual ceremony where New and old vehicles are still branded by the Mayor of London and the Lord Master Carman, as a ceremonial activity. From traditional carts to new lorries (British for trucks), each vehicle that will make deliveries in London gets a stamp on their license plate. Wilding said that this historical event has actually become a hub for spotting trends and seeking innovation: “It actually pioneers new vehicles. I took along a 100% electric delivery vehicle one year. Yes, you get some historical vehicles going through, but a very important part is looking at where transport will be going. By showcasing some of these more modern vehicles, it allows people to start thinking about how to utilize some of these vehicles.”
“My job is to make products and services obsolete before my competitors do.”
That’s not to say, however, that history doesn’t ever get in the way. “There’s this idea that ‘we’ve always done it this way.’ The bottom line is, there’s a lovely quote: ‘My job is to make products and services obsolete before my competitors do.’ You just can’t stand still. The skills that I have now—I have to make sure they’re out of date before my competitors. So, yes, you do get a lot of pressure. You have to get around that.”
Looking to the Future
I asked Professor Wilding what areas he felt needed the biggest push for innovation. And while he’s happy to have the routes stay hundreds of years old, he feels that companies can do more to shake up their operations. He’s interested in the following ideas:
“One area that is very much on the radar for organizations at the moment is the concept of co-opetiton. If we’re going to drive down costs within the logistics and supply chain sector, we’ve got to become a little more enlightened about how we can share resources.” Wilding says that, rather than focus on beating out the competition, logistics companies can actually share their resources in order to drive down costs and solve a big problem: filling rates on trucks. “There are companies in the UK who have pioneered this idea that ‘we may be competitors, but are we really competitors if we’re just moving the same materials around the country?’ If they’re actually able to share those resources, they can get better fill rates on lorries and drive costs down. I think that learning how to collaborate and manage relationships is going to be the key thing that people develop.”
“We’ve got to become more enlightened about how we can share resources.”
It might be an easier task for U.S. logistics than European: “the complex thing about Europe is that you’ve got lots of languages and cultures that drive very different behaviors.” If you think it might be tough to convince a British person to deviate from 500 years of history, try convincing an entire continent (filled with countries who, at some point, were all at war with each other) to do the same. However, Wilding believes that it’s the key to building a healthy freight market.
Omnichannel Supply Chains
Wilding believes that the future of e-commerce lies in the omnichannel supply chain. “The UK has one of the most advanced e-commerce environments in the world. We’re finding that customers want to interact not through one online channel but to merge channels together.” Ultimately, customers want the most control over their decisions, and companies are having to revamp their logistical thinking to give over that control.
I asked Professor Wilding about the recent trouble some American companies have run into when they try to move their inventory to e-commerce, and end up running out of stock in-store. He chuckled. “In the UK, we don’t manage the two as separate channels. Your inventories are the same.”
“Customers want their shopping to be fun, easy, and they want to feel in control.”
Successful e-commerce ventures in the UK are using something called “click and collect”. Customers can purchase an item and then collect it on their way home, either from the store or at repurposed Tube (subway) stations. “Customers want their shopping to be fun, easy, and they want to feel in control. Delivery doesn’t always mean being in control. [Successful companies are] bringing heavy levels of transparency into delivery to give more control.” But that doesn’t come without a price: “The thing you have to think through is cost—it all has to relate back to cost.”
“Click & Collect” is popular at British supermarkets. Image Courtesy RetailWeek
Building out Transparency
You can’t plan to introduce transparency to the customer without first thinking about cost. Wilding focuses on using technology to get the most out of a company’s finances. “How much is it costing you to deliver to customers? We’re now finding whole new ways of supply chain finance we’re understanding how to locate and finance inventory. It’s a matter of understanding how to extract data. Which products you’re making a margin on, which ones you’re not. But if you take an average approach, no one spots it.”
“It’s a matter of understanding how to extract data.”
That ‘average’ approach can be dangerous to companies trying to save on delivery costs. “Let’s say you’ve got a warehouse with 1,000 items and it’s costing $4,000 to run,” explained Wilding. “You might think, okay, so my costs end up being $4 per item.” This is a mistake companies often run into, and it can run costs too high. “An iPhone will cost far less to ship than a bulky item. So understanding those differences is key. In the end, it comes back to transparency on the company side.”
Professor Wilding’s Three Rules
In order to achieve the most efficient, customer-friendly supply chain, Wilding says, companies should focus on three key areas:
- Time. “You have to understand the timing of your supply chain. Then you can run cost against time, demand against time, process against time, inventory against time. It’s the first step.”
- Transparency. “Once you’ve fully understood your costs, you can start to see what’s really going on in the shipping environment.”
- Trust. “Why do people say things like, ‘I need that item for Friday, but I’ll ask for it by Monday because I think it might be late’? They don’t trust that things are actually going to happen. They start playing games, which increases cost, hence the importance of transparency.”
Bridging the Talent Gap
Children play Business on the Move, the Logistics Board Game. Image courtesy Inspiring Enterprise
As a Professor at one of the top Supply Chain and Logistics programs in the UK, Wilding is on the forefront of tackling the talent shortage in supply chain. He said that the majority of people in supply chain today didn’t get there on purpose—like him, they fell into it. But now, in an increasingly chaotic environment, trained professionals are in high demand. “Cranfield’s Masters in Logistics & Supply Chain is one of the leading programmes in the Europe, but we also need to target younger students. One initiative in the U.K. supported by the Chartered Institute of Logistics and transport provides an undergraduate degree program which offers important initiatives—students are, if they perform well, guaranteed a job at the end of their study.”
A majority of people in supply chain today didn’t get there on purpose.
But he’s also looking to younger generations. “We’ve got a fantastic board game called “Business on the Move”. You make decisions about air, rail and road and actually move stuff around. It’s played in schools, but also at companies. We’ve been sponsored by a variety of industries trying to get things going. We’re trying to get a greater awareness of what’s going on.” He says that the problem isn’t that supply chain is dull or old-fashioned—but that people just don’t know it’s an option.
It’s a tough task, but Wilding is optimistic. “We’re taking the language of supply chain and getting it embedded in the younger generation, so people can see there’s a career in this.”