Three key takeaways from Davos 2021

SM rounds up the key discussions around supply chains at the World Economic Forum's (WEF) virtual annual meeting in Davos, Switzerland.

1. Addressing supply chain fragility 

The global landscape has become fragile and industries have adapted in response.

Frans van Houten, CEO at the electronics firm Royal Philips, called for increased preparedness, data transparency, and coordinated efforts between public and private sectors for future pandemics.

Among key lessons learnt from the crisis was the need to ensure supply requirements can be met, and this has required people to work together. He added: “In order to build capacity you need supply chains that work. When a crisis hits companies shouldn’t take a 'me first' attitude but look to collaborate to scale the response.”

Manufacturing and distribution strategies are being reimagined to meet a post-Covid world. Kathey Wengel, executive VP and chief global supply chain officer at Johnson and Johnson, said supply chains had been “an engine for growth” during efforts to adapt, especially when combined with technology. Opportunities have resulted from the need for more innovative, direct supply channels, and increased traceability and resilience.

She said “new channels of access” to supplies had been key, such as drone delivery of HIV medical supplies to Uganda, as well as the “fundamental, permanent shift” to demand forecasting and e-commerce.

Increasing alliances between countries to boost both public procurement prospects and trade in the private sector was a common theme during the conference.

Despite many sectors leaning towards more regionalised production, Herbert Diess, CEO at Volkswagen AG, said the future would benefit from firms keeping global supply paths open. 

“I think its much better to work well with China, than isolate China,” he added.

2. Collaborative efforts towards food supply

With countries struggling to meet supply needs in developed countries, food supply chains to developing countries have been even more vulnerable. 

David Beasley, executive director of the United Nations' World Food Programme, said the answer lies in the UN working closer with private firms and farming communities to share best practices and use new technology such as vertical farming and blockchain to improve the design of the food supply chain for the 10% of the global population in extreme poverty.

The WEF’s Food Innovation Hubs initiative across Asia, Europe, Africa and South America, which connects agricultural businesses with regional stakeholders to scale up innovations that can address food system challenges, was highlighted by Dutch prime minister Mark Rutte as a key opportunity for “global collective action”.

Jeffrey Lu Minfang, chief executive officer, China Mengniu Dairy Co, also drew attention to improvements from using data platforms to increase visibility of demand and supply to increase efficiency and reduce waste along the supply chain, from growing dairy feedstock to manufacturing and logistics systems.

3. Technology and startups target supply chain needs

Emerging technology has been accelerated by the pandemic as firms have been forced to innovate to become more responsive.  

The WEF led the digital crowdsourcing platform UpLink to connect startups that are resolving challenges in areas such as supply chains.

Among startups making impacts include Cubex Global, which provides a marketplace for unused shipping containers on existing cargo routes to improve efficiency and sustainability, and OriginTrail, a blockchain firm aiming to provide better certification of medical equipment to help procurement professionals in light of problems with verifying PPE supplies during Covid.

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