Episode Summary
In this new episode of Whiteboard Wisdom on Supply Chain Now, host Scott Luton and special guest Patrick Van Hull dive into the critical topic of supply chain risk management. They explore three essential capabilities to optimize risk management strategies: due diligence, continuous monitoring, and executive reporting.
Summary:
Listen in as Patrick emphasizes the importance of understanding and preparing for various risks, including geopolitical, cyber, and environmental factors, and shares insights from industry surveys highlighting the significant financial impacts of supply chain disruptions. The discussion also covers the necessity of building risk intelligence and operational resilience to ensure business continuity in the face of adverse events.
This episode is a must-watch for supply chain professionals looking to enhance their risk management practices and drive competitive advantage.
Episode Transcript
Scott Luton (02:53):
Hey, good morning, good afternoon, good evening, wherever you may be. Scott Luton and special guest, Patrick Van Ho with you here today. Welcome to Whiteboard Wisdom here on supply chain now. Patrick, how are you doing my friend?
Patrick Van Hull (03:14):
I’m great, Scott. It’s always a pleasure to reconnect and certainly love this topic, so happy to be here,
Scott Luton (03:20):
Vice versa. Great to see you in person in Atlanta a few months back and I can’t wait to get into this topic here today. Great show teed up, especially for our supply chain, our community on YouTube where we just hit and surpassed 10,000 subscribers. That’s cool. But we’re continuing our popular whiteboard wisdom series. We’re featuring a neat discussion led by Patrick here today. A-K-A-P-V-H. If he was a wrestler, that’d be his nickname. We’ve got a great discussion on three ways to optimize your supply chain, risk management, risk management. In many ways it’s the name of the game and especially when it comes to global supply chain and we’re in a risk rich environment these days, geopolitical, cyber, weather and so much more. Looking forward to Patrick’s, been there, done that perspective as we dive into some things you can really do today to help build a more successful risk management strategy.
(04:10):
Hey, before I move forward, I think federal regulations require me to ask you to like and comment on this episode and if you enjoy the conversation, share it with a friend, they’ll be glad you did. Sharing is caring. Now lemme introduce folks that if you hadn’t had a chance to meet Patrick Van Ho, lemme just share some of his background here named a top 50 global thought leader and influencer on supply chain 2024. Patrick Van Holl is a highly regarded supply chain strategist and advisor with 20 plus years of experience in supply chain strategy and risk management at leading organizations such as Apple, Dell, Rio Tinto and CVS Health, big time brands there. Now he has held advisory analysts and consultancy roles at SCM World Gartner and Deloitte. Patrick serves as principal supply chain risk analyst and industry strategist at interros, the AI Ford Supply Chain Resilience company. He holds a bachelor’s in industrial and operations Engineering from the University of Michigan, go Wolverines, an MBA from Duke University’s Fuqua School of Business. And if that isn’t enough, he’s lecturer at the University of Arkansas’s, Walton School of Business. Patrick Van Ho. So nice to have you back with us. How you doing my friend?
Patrick Van Hull (05:34):
I’m great. I’m exhausted Just hearing that description. I don’t know that it’s warranted, but it’s much appreciated.
Scott Luton (05:40):
Well, you have been busy and when we last connected in person you had, it was right after you gave a well-received and led a panel session at a great supply chain focus event. So it’s great to have you here on Whiteboard Wisdom. Now as mentioned, I want to share the title that we’re going to be diving into here, right? Three critical capabilities and three great Ways to Optimize Supply Chain Risk Management. So we’ve got the right expert in the room here. So Patrick, I think we want to start before we get into the three ways with some important context and background information, right?
Patrick Van Hull (06:18):
Yeah, absolutely. I think that we’re at this place in time where risk is unavoidable. Obviously that sounds trite, it sounds overly simplistic, but that the idea that we’re able to prevent risk and totally escape it is becoming readily apparent that that’s not possible. To the extent where based on our resilience survey, we were able to ask 750 procurement leaders from around the world, 90% of them said that they would not be able to identify a disruption in their sub tier supply chain within two days. That’s two days of time. And so when we think about what that looks like, well, okay, maybe that’s a one-off, but on average those leaders are telling us that that’s happening four times a year. So quarterly they’re having these disruptions where they’re not able to actually understand what’s happening in their sub-tier supply chain. And the financial impact here is Mets, we’re talking 80, 90, a hundred million dollars of financial impact. So that’s reputational damage, that’s revenue lost, it’s excess cost. There’s so many different ways that this is impacting businesses and we see a different event every single day. Name the event, name the company. It’s hard to keep track of all of them,
Scott Luton (07:35):
Man. Now y’all do this research regularly. Is it yearly? Is it quarterly? I love data-driven insights and how we can, it really helps bring best practices more grounded with what leaders and organizations are really experiencing.
Patrick Van Hull (07:52):
Yeah, it’s a survey that we conduct annually and it’s certainly something that when we speak to our customers and we speak to the events like you mentioned too before, is really getting a sense for just how widespread this is. It’s really easy for us to think about what is and isn’t risky and hypothesize about what might and might not happen. But when we start to look at it to that level, we start to think that that big event that we didn’t get impacted by, well maybe we just got lucky. I mean, it’s a very real situation where when we look at the news on whatever day, we start to realize that companies every single day are being impacted in numerous ways.
Scott Luton (08:32):
Well, and I think where you’re going next risk takes on so many different forms, right?
Patrick Van Hull (08:38):
Absolutely. So when we think about it from the inters point of view, we look at it one from the overall riskiness. We certainly have an I score that we consider to be an industry standard in terms of riskiness of supplier ecosystems, but we also look at it from six different risk factors. So you can see them on screen here, but financial, catastrophic, geopolitical, cyber, ESG restrictions, we start to realize that there is nothing that’s happening in the world that doesn’t impact our supply chains. And then realizing that supply chains have this indelible impact on the human experience, we’re starting to realize that what we see as consumers is we’re actually pretty fortunate that supply chains work as well as they do in a lot of cases because when any one of those risk factors is considered, we’re talking 40 plus million dollars of impact in any single one of those at any point in time. So we’re talking about bankruptcies, we just went through the CrowdStrike IT disruption, which many are considering the largest IT disruption in history,
(09:39):
Things like hurricanes, earthquakes, and fires. And really all of these things are happening and it’s happening so frequently that, and we have so many suppliers that it’s hard to keep track of. And really one supply chain risk leader told me not long ago is that we’re trying to manage more suppliers with fewer people and a higher rate of change among the risk. And so it’s really that we’ve now gotten to this place where risk is just a standard and unfortunately, I don’t know, is not really an acceptable answer anymore. We have to be able to understand what’s happening to our supply chains because if we don’t take action and we look at it as passive, something will hit us. And that’s the part that’s ultimately very scary is that if we’re not prepared, then we’re putting ourselves in the position where we’re unable to serve those customers that depend on us.
Scott Luton (10:31):
Well, and I want to pull one thing out that you said there to our viewers out there. Patrick didn’t say that. I don’t know, is it an accurate answer? He said it’s not more and more as an acceptable answer and we got to feeling in that blind spot. So we’ve got those answers and I think part of that as we continue on this discussion is building that risk intelligence, right?
Patrick Van Hull (10:56):
Absolutely. I mean, we’re at the place where, I don’t know maybe the truth, but when we need to understand where the clients in financial health are happening or we’re looking at restricted lists, there’s the place where we have to have a plan ahead of us where we can understand that there are things that we’re not going to be ultimately prepared for. There are disruptions that will happen that we never could have prevented, but when it comes to what will we do about it, we need to be able to take a very proactive stance. And it’s not just trying to just chase every single risk that’s out there because frankly that’s exhausting. I look at the amount of work that planners do and supply chain, the number of skews that they’re managing. We look at the number of suppliers that are involved here. We have to consider so many different things that it’s about building out a programmatic approach and we think about risk management and we think about resilient operations. It is a structured methodology and an operating model as much as it is a set of tactics.
Scott Luton (12:01):
So all of that brings us to really the core part of this edition of Whiteboard Wisdom and that’s these three critical capabilities that we’re going to walk through with use cases. So you can take Patrick’s word for it or not, but this is taken right from what’s going on in the industry. So these are some of my favorite types of discussions. So Patrick, the three critical capabilities are,
Patrick Van Hull (12:27):
So the first one’s due diligence, and this can take on many different forms. We’ll talk about this a little bit, but really being able to deep dive into what those risks look like, especially when we think about the tiers upon tiers of our supply chain, it’s critical that we’re able to dig in and start to understand the information. Continuous monitoring is actually becoming table stakes and we look at things like financial services and we look at a number of the highly regulated industries and it is actually a contractual regulatory compliance type of behavior where continuous monitoring is a must have, not optional any way whatsoever. And then executive reporting becomes that level of being able to articulate just what it is that we do. Certainly often when we are so busy and as much as I hate using that as an excuse or a crutch, we’re so busy that sometimes we forget to stop and actually say what it is that we did and why we did it and how we did it, what we’ve learned. And that’s really where we start to be able to create this momentum about managing these programs and really managing our supply chains, not just as a cost avoidance, but how do we start to use risk management and resilience and risk intelligence as a lever for competitive advantage and value generation even.
Scott Luton (13:42):
Love it. So as we dive into this first one of due diligence, tee it up for us.
Patrick Van Hull (13:51):
Yeah, I think that the first couple of bullets here are things that we’ve heard from our customers and we look at some of the challenges that are faced throughout the industry and we take a little bit of a challenge action result approach with each of these use cases here. But we’re looking at things like taking four to six weeks to perform due diligence activities. We are having to evaluate suppliers and so many different suppliers at a point in time is that we need to have some type of approach where we know who we’re going to speak with, we know why we’re speaking with them. The other is we’re surveying a hundred plus critical suppliers. Every time there’s a possible cyber event, I don’t know if you’ve checked the news, but if you have a hundred plus suppliers and you’re surveying them every time there’s an event, you can imagine how many surveys they start to send out.
(14:36):
And so it really becomes the program it really starts to go into is really one identifying what is your risk register. So we think about the things that are risky for our business and some of these are, you can google them and you can look up some of the processes that are in place, almost like a failure modes effects analysis in many ways. What are the things that are impacting our business and what are the things that we’re willing to tolerate because there are some things that we’re willing to accept that they will happen and we’ll deal with them as they come and there are those deal breakers out there. So being able to understand what that criteria is helps us to assess which suppliers are risky from the beginning. In some cases, we’re willing to accept that there may be past financial behaviors that we’re overlooking because the company has proven to us that they’ve moved beyond those.
(15:26):
But it’s really being able to understand that risk posture and taking a very focused approach. And then the other piece to it when we start to look at this is really digging in that next level down. We look at CrowdStrike for example, and we know that the disruption that just occurred, and many cases, it wasn’t necessarily the direct usage, but it was who are those suppliers that are tier ones or are third parties depending on what you call them, but who are those that are impacted by these events? Because ultimately we may not be disrupted, but we need to be able to understand the linkages that exist within our supply chain. We need to perform that due diligence. Sometimes it’s on our own, sometimes we have to rely on our suppliers and that even may be contracted to say, who are those third parties that you are using? And we look back in time, Intel created their conflict free supply chain a number of years ago, going back to the Sub-Saharan African mines to ensure that the source of their precious metals was not the source of being supplied by conflicted labor.
Scott Luton (16:30):
And
Patrick Van Hull (16:30):
So we look back at the history of these, but it’s becoming a critical must have. And by doing that, we can start to identify those places ahead of time that if something were to happen to my supplier, supplier, here’s where I am going to be impacted. This is an acceptable risk or not. And that’s where we want to be able to pre-screen those risks. And we want to be able to compare our suppliers and we also want to use that same methodology to look at the suppliers that we have in our ecosystem when something happens. So we want to be able to say a risk occurred, a storm, a financial event, cyber event, geopolitical circumstances. It’s about putting the foundation in place to be able to go investigate with a real tangible opportunity in front of you so that you can start to actually do something about it because the risks are too big. We’ve already established that it’s perpetual, but how do we actually start to do something about it? And that really starts from due diligence.
Scott Luton (17:31):
Love it. Going back to the linkages that you were kind of pounding on in that first, that due diligence, core competency, I’ll call it. I grew up hearing a certain hymn sung in church regularly. Blessed be the tithes that bind well in supply chain. Some are blessed, some are not. Blessings based on some of those linkages and ties and being able to shine a powerful spotlight through probably a combination of the human factor, but taking more and more advantage of technology in these days and some of the largest companies they got to, I mean there’s no other way you can get around it. You’ve got to lean on technology to really take advantage of a lot of things you were suggesting. So sometimes there’s ties that bind are blessed and sometimes they are not where we move. Your quick comment there, Patrick, before we move on to the next three ways.
Patrick Van Hull (18:28):
Yeah, I would just say from that standpoint, I mean thinking about the map, right? I mean there are so many different intersecting points and we’ve talked about this, you and I’ve had this conversation, your guests have had this conversation about digital supply networks and about it not being linear anymore,
Scott Luton (18:46):
Right?
Patrick Van Hull (18:46):
Like spider web, that’s so prevalent in our supplier ecosystems.
Scott Luton (18:51):
That’s right. In fact, we’re trying, I’m recruiting through supply web, that phrase I’m recruiting my son Ben who Spider-Man is one of his top favorite characters of all time. We’re going to make him a supply chain practitioner before he knows it with that web notion. Okay?
Patrick Van Hull (19:06):
I’m a firm believer that everything in the human life is part of supply chain. And the more we can do to educate, the more that people will actually take ownership for it.
Scott Luton (19:15):
Patrick? Yes, kindred spirits. I swear we got to be second cousins. We view the world very similarly. Okay, so we’ve got three ways we’re really focusing on, again to optimize your risk management approach at your organization, strategy tactics, you name it. The first one was due diligence. The second one is continuous monitoring. Tell us more, Patrick.
Patrick Van Hull (19:35):
Absolutely. So continuous monitoring, certainly we live in the information age and it’s the need to be up to date that the concept of due diligence has a very specific purpose, but we also need to be able to stay on top of it. We think about the way that the world changes by the day, the news stories that we hear every single day, the behavioral changes, all of this is occurring in a real time manner. So we’ve done the process to identify what’s risky to us. We’ve done the due diligence to understand who those customers are or our suppliers are rather, and who the partners are where we think that there may be risk in the platform or risk in our ecosystem. And then we need to be able to look at it on a regular basis because doing it once isn’t enough. And so when we look at the why here, it’s the exposure to world events.
(20:28):
We need to be able to look at situations that are happening globally. They happen without us knowing about it. We see things, storms, earthquakes, hurricanes, all of these types of things are happening without a moment’s notice. We have a little bit of purview into the types of things that are happening, but how do we start to identify the opportunities that exist? And really we talk about things like Google alerts, we talk about many of these services certainly partial to the continuous monitoring that we provide, but it’s this ability to look at a supply chain at a moment’s notice and know what’s happening. And if it impacts us to be able to assess those things relative to our business because it’s critical that we know the broader scale. But how do we start to filter that down? How do we really get to where we can start to anticipate a bit?
(21:19):
And that’s where we can position ourselves to respond to the disruptions. If we see that the trend is moving in a certain direction, we see that the news alerts are coming in a certain way, that’s where we can really start to do this in a more automated manner. And the last thing we want to be in supply chain is surprise. We know that the existence of the diving catch and the duct taped solution and bubblegum fill in holes. That’s kind of a source of pride for supply chain, but it’s not something that we really want to plan for. We would like to be able to put ourselves in position to act on these things. And so when we see those alerts happening, when we see something pop up on a Friday morning, it’s how do we know that that’s relative to our business? How do we know that that cyber event happened somewhere in our supply chains?
(22:09):
And really that continuous monitoring is table stakes. We do see that there’s a question of how are you monitoring your supply chain for risks because that’s being asked from regulators, it’s being asked from our customers. They’re asking us so that they can have confidence in our ability to respond. So really building out this idea of continuous monitoring, is that always on mentality that’s says risk is prevalent, it’s perpetual and we’re looking for it so that we can respond in the best way possible to serve our customers, but also make sure that we’re taking care of our suppliers too. Because when we start to see some of these things happen, there’s always that challenge where historically we may want it to have been a little direct with our suppliers perhaps, but now when we start to see things happening, maybe we can collaborate a little bit more. We can be those partners that are going to help get them through difficult times and we can really acknowledge that it is a team effort when we think about the importance of the entire supply chain.
Scott Luton (23:07):
Love it. Patrick. And a couple of points in particular. I love that you made, going back to near the beginning of your response, surprises are not good. Surprises are great if you’re a kid and it’s related to your birthday or other family surprises maybe. But man surprises in global supply chain tend not to be good. And Joe Flak, I think I’ve got his first name right? Yeah. When you hear flak you probably think of pickles and foods. Well the president, the son of the founder and the eventual chairman of that organization, one of his mantras that he would lead with regularly, his whole organization knew it is give me good news, fast and bad news faster. And I think that is so relevant. And then the other point that you made, and I think it’s really important is this continuous monitoring. It’s not good enough to do your due diligence on a supplier. They pass that initial test and then they’re in like it’s a lifetime appointment, a lifetime situation, pass that first test. It’s a daily, sometimes an hourly depending on different settings pulsing to make sure we’re, our finger is on the pulse of exactly what that supplier is experiencing and what their portfolio of business may pose risk-wise for our business. Right?
Patrick Van Hull (24:27):
Absolutely. Yeah.
Scott Luton (24:29):
Your final comment there, Patrick.
Patrick Van Hull (24:30):
Well, I would say too, I think that one of the challenges in supply chain again is that we try to do things that maybe it’s a side job, it’s an extra bit of work that we’re doing on top of our day-to-day work. And so we’re parceling out small bits of it, but if you’ve got a hundred suppliers that you need to review and you’re going through a couple of weeks, 50 weeks later, you’ve gotten through your entire base. But what happens if that first supplier you reviewed had something happen in week two?
Scott Luton (24:59):
That’s right.
Patrick Van Hull (25:00):
And so the methodology, the mindset behind continuous monitoring is just preparing ourselves for that and trying to find a structured way to evaluate the risks as they come.
Scott Luton (25:13):
Well it’s like Air Force ROTC. I was in that for a stretch of my collegiate career and they had a fitness test and it wasn’t a one and done fitness test. It was a couple times each semester, anyone can pass one test, even if they did the pizza and beer diet like I took in college, I could pass the first one. But it’s constantly monitoring your fitness or in this case your supplier fitness. So I love this middle one. Are you ready to go to the third way?
Patrick Van Hull (25:43):
Yeah, absolutely. So we’ll talk about executive reporting.
Scott Luton (25:46):
Let’s do it.
Patrick Van Hull (25:47):
And the CEO of a company I formerly worked for, he used to talk a lot about the boards are asking, what are you going to do the next time this happens? Not an if, but what will you do when the next risk happens? So for example, in this first example, the Y sanctioned densities, we’re seeing the world change in a quick manner that we are what sanctioned, why, what are we uncovering about that and how are we starting to brief our executives on this? Because we also know that the work that gets done at the lower levels of the organization isn’t always of the purview of say, A CEO, but the CEO will be held accountable for that. So it’s really starting to build out not just from we think about the due diligence, the ability to go and dig into the risks and the monitoring to see that as conditions changed.
(26:40):
But how do we start to create that visibility that we’re reporting on this? How do we start to create the right types of information? And it’s not just to say that this risk exists, it’s to say this is a risk that we’ve evaluated. Here’s what we did about it, or here’s what we didn’t do about it. And a consultant that worked with just a few months ago said that one of his greatest metrics that he works on is the number of risks avoided that they didn’t actually have to do anything about. It’s really difficult to report on that, but the ability is to investigate these to be able to look at them and say, I considered this particular situation in these circumstances and I deemed it to be an acceptable risk. Well, that’s something that we need to start reporting on too is because it’s an evaluation process that we do all the time, the trade-offs in supply chain are constant.
(27:30):
So the more that we can start to create this as a structured approach to say that these are the things that we’ve identified as concerns, here’s what we’ve done about them or will do about them, and here’s how it’s going to impact the business. That’s when we really start to create this level of reporting where one, we can create a public facing presence for our executives, for our leadership team that the interaction with our stakeholders, whomever they may be, but it also starts to create that confidence as we go back into the individuals doing their job and we think about the opportunities to go above just beyond a task. But now we’re starting to evaluate what are the things that I have to monitor all the time? How can I say that I’m actually adding value to this business and knowing that by avoiding that risk, I am protecting reputation, I am protecting revenue, and I now am able to formalize those answers at the ready, because that’s part of the mindset that we’ve created in building this whole programmatic approach.
Scott Luton (28:31):
You’re keeping those supply chains out of the headlines where no supply chain wants to be in the headlines. Right? And I love your other comment there because I can only imagine how difficult it is to really quantify and track the needless risk that you can avoid, right? As you’re talking earlier, near misses, near Miss Misreporting and manufacturing and plenty of other environments comes to my mind where if you uncover an opportunity that your team was able to avoid by luck or by process man capturing all of that information, documenting it, reviewing it, communicating it with the team so you can bake in a little bit more resiliency, a little bit more risk management optimization into the organization. And maybe one of these days, Patrick, this whole notion around resiliency and how so many people talk about it. Maybe we’ll start to approach being really resilient when it comes to global supply chain. Who knows?
Patrick Van Hull (29:32):
Absolutely. It becomes the concept of risk intelligence. We think about risk management and we think about trying to just deflect in many cases, and I think about it being a parent like risk management, sometimes it’s like don’t touch that kind of steering them off the edge of the pool or putting the bumpers on a corner. But we can start to be in a supply chain standpoint, we can really start to build out that intelligence that says, here’s how we’re thinking through this at that next level where we’re actually accepting that those things are going to happen and we’re going to move forward with that as part of our operation.
Scott Luton (30:10):
Absolutely less all that we can bake into the proactive side. So that doesn’t rely on that in the moment reactive quality management or leadership to be able to say, don’t touch that. It’s hot, right? Well let’s just say, hey, don’t ever touch the stove and it’s a universal policy that maybe that can, hopefully your two kids and my three kids will always abide by. But that’s a whole different conversation.
Patrick Van Hull (30:41):
That’s not true. But another topic for another time.
Scott Luton (30:44):
Alright, so we have just tackled executive reporting. So we’ve gone through due diligence, continuous monitoring and executive reporting as three massive opportunities that folks have out there to really optimize their approach and overall strategy and results when it comes to risk management. So I know that we want to kind of conclude with a couple different things, a little bit more about operational resilience, which you’re about to tackle massive call to action that will speak dollars and cents in many ways. And then lastly, we’re going to make sure folks want to connect with you and the Interros team. Patrick. So let’s talk about operational resilience, some of your thoughts here.
Patrick Van Hull (31:26):
Yeah, I think this is pretty straightforward, but one of the things that gets really buzzy as we talk about resilience and resiliency and operational resilience, but really it’s this idea to continue operations providing our products and services in the face of adverse market or supply chain events that’s called business today is really that we need to think about what actions we’re taking, the programs that we’re building, the technology we’re investing in. This isn’t just a one-off. And so we really build on this idea about prevent, respond and recover. These disruptions are going to happen and we know that they are. So when we’re able to prepare for their possibility, it isn’t always even the case that we need to know what’s coming, but we need to be prepared. We need to build that adversity tolerance in a way to say these things are going to come and we’re going to do something about it. That preparedness is really where we start to see that operational resilience is keeping going when things get difficult and we know that it’s coming, so we better get it built, right.
Scott Luton (32:34):
This is a fresh example, and some folks may really hate this example, but I’m going to share anyway. Delta Airlines massively impacted with the global technology outage like many other organizations, but maybe uniquely when it comes to airlines, well like it or hate it or love it or leave it, much of the enterprise will still able to function. Although they were in many ways, lots of canceled flights, lots of late flights, things were still moving. I would argue. I don’t have an insider’s view to the contingency processes they set up and the very deliberate resilience dynamics they baked into the organization. Again, it was a lot of damage, a lot of disruption, but the overall enterprise was still conducting operations and moving forward. And again, it’s not the perfect example, but as someone that flies Delta regularly, and yeah, we’ve all been impacted with all kinds of flight challenges to do what they have done in light of eight and a half million devices and machines that all came to a standstill were locked out those blue screens of death. I think looking back, they’re going to get some red ribbons or maybe some blue ribbons. Patrick, your thoughts?
Patrick Van Hull (33:51):
I fully agree and I think that it’s very easy to get caught up in the moment of this, but when we consider that that event became public news starting just a few days ago,
Scott Luton (34:04):
Right? Friday morning,
Patrick Van Hull (34:06):
And it was Microsoft first alerted to it and then a few hours later we started to see what was the cause just a few days later we’re still recovering, but we’re seeing companies that are operational. Again, this isn’t that we’re getting hit by something and it’s devastating. Companies have really invested in these processes. Delta is a great example and we think about their commitment to operational excellence, to think about enhancing the customer experience. They’re phenomenal at that because it’s something that they’ve built into their ethos. That’s right. And really the ability of these companies to bounce back from something of this scale, it’s remarkable. It doesn’t make it any easier to deal with in the
Scott Luton (34:48):
Moment,
Patrick Van Hull (34:49):
Completely unexpected, but they’re prepared for it and they’re willing to step into making it better when it happens.
Scott Luton (34:57):
Again, not taking anything away. If you’re on one of the thousands, I think thousands, at least hundreds of Delta flights that got canceled or delayed, we all know the pain of that. We all travel. But the big picture, it is remarkable in many ways. I bet if this thing happened, let’s say five years ago, I bet the situation and the disruption will be on a far greater scale, is my hunch. Absolutely. That’s tough to quantify. Kind of going back to the risk that you’re able to avoid, but what’s easier to quantify is are these 37 million reasons why you need to listen to Patrick and take action. So Patrick, tell us more.
Patrick Van Hull (35:38):
Yeah, so certainly when we think about the opportunities that exist, this is additional survey data similar to what we provided earlier, but $37 million is just the average response from those individuals that participated in the survey. And they’re saying that there’s a $37 million opportunity. We talked about a hundred million, 80, 90, a hundred million dollars of disruptive financial impact. So it’s not saying that we can completely get rid of this,
(36:07):
But we’re talking about being able to save 20, 30, 40% of the impact by just being prepared for it by just building out those core use cases and capabilities. This is a big topic and it’s changing so quickly that it’s hard to say that we’ll ever fully be able to grasp all of it by building risk intelligence and by building the capabilities that allow us to actually live in these moments, there is serious financial impact that comes by doing this process better, by building the programs, by investing well and helping our people to really take care of these situations when they happen. Because ultimately it’s going to come down to who’s in that chair, who’s at that mouse, who’s picking up the phone, and really supply chain at its core is still about people making the best possible decision in any given moment. So let’s prepare ’em to do that.
Scott Luton (36:59):
That’s right. Let’s put ’em in a position to have success and be able to deliver because 99.9 9 9 9 9 6 Sigma, a portion of people want to be successful and do their best and really deliver every single day. And it’s incumbent upon us leaders to equip them with the tools, the technologies, the what’d you call it? Risk intelligence that they need to do just that. Alright, so Patrick, I bet you’re going to have some folks that want to reach out, compare notes, expound on this. We kind of give ’em an appetizer here today, but I can tell y’all, Patrick is one of the nicest and smartest supply chain pros you’re going to ever meet. So you’re going to enjoy a conversation with ’em. How can folks connect with you, Patrick?
Patrick Van Hull (37:44):
Well, Scott, you’re too kind and I feel the same as you, so thank you for that. We are in Interros. You can find us online@interros.ai. You see my email address there and certainly on LinkedIn and certainly as we talk about what risk looks like, the conversation is evolving and that’s one of the things that we welcome most is just to be able to work with companies and to have these opportunities to show that risk isn’t just this bad thing, it is a thing and we can do things about it. We can take action, we can shape our efforts and our attitudes and our behaviors to really go and dig into what’s in front of us. Love it. So certainly welcome any of the conversations that anybody wants to take part in and certainly appreciate the opportunity to share our thoughts today.
Scott Luton (38:33):
Love it. I wish we had a couple more hours, Patrick, we could talk about all things risk management, Michigan Wolverines, how they’re going to do next season and beyond. Just catch up in general. We’ll do that next time. Absolutely. I want to pick up on something you said though, the conversations are evolving, the challenges are evolving, the opportunities are evolving and the outcomes are evolving as well. Look at what your competitors are doing, right? They’re creating competitive advantage by utilizing a lot of what Patrick Van Holl is sharing with us here today. So folks, hope you enjoyed this conversation with Patrick as much as I have. Be sure to connect with him after today’s episode, but now to onus is on you to take one thing from what he shared here today and put it into practice deeds, words, Hey, there’s at least 37 million reasons for investing into an optimized approach, a new approach, a forward looking approach and strategy to optimize that risk management at your and results at your organization. Let’s jump on that opportunity. Your team, your customers, your suppliers, your entire ecosystem. Sure will appreciate it. So with all that said, big thanks to Patrick Van Hall with Interros. We look forward to having you back. Patrick,
Patrick Van Hull (39:42):
Thank you so much, Scott. It’s always a pleasure to be part of the supply chain now community.
Scott Luton (39:46):
You bet. We’re going to do it again soon and to all of you out there tuned in here. Hey, on behalf of the entire team here at Supply Chain now, Scott Luton challenging. You do good, give forward, be the change that’s needed. We’ll see you next time right back here on supply chain now. Thanks everybody.
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Named a “Top 50 Global Thought Leader and Influencer on Supply Chain 2024,” Patrick Van Hull is a highly regarded supply chain strategist and advisor with 20+ years of experience in supply chain strategy and risk management at leading organizations, including Apple, Dell, Rio Tinto, and CVS Health. He has held advisory, analyst, and consultancy roles at SCM World, Gartner, and Deloitte. Patrick serves as Principal Supply Chain Risk Analyst at Interos, the AI-forward supply chain resilience company. He holds a BS in Industrial and Operations Engineering from the University of Michigan and an MBA from Duke University’s Fuqua School of Business and is a lecturer at the University of Arkansas’ Walton School of Business.
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