EPISODE 76: DHG Risk Advisory Partner Chris Ricchiuto and Director Chris Kalafatis discuss the importance or being hyper-aware of supply chain challenges and which areas require special focus in order to mitigate disruptions.
[00:00:09] JL: Welcome to today's edition of DHG’s GrowthCast. I'm your host, John Locke. At DHG, our strength lies in our technical knowledge, our industry intelligence, and our future focus. We understand business needs and are laser-focused on company goals. In this ever-changing world, DHG's GrowthCast provides insights and thought-provoking conversations on topics and trends that address growth opportunities and challenges in the current and future marketplace. Thanks for joining us as we discuss tomorrow's needs today.
[00:00:42] ANNOUNCER: The views and concepts expressed by today's panelists are their own and not those of Dixon Hughes Goodman LLP. Always consult the advice of your legal and financial professional before taking any action.
[00:00:58] JL: On this GrowthCast episode, I'm talking with DHG’s Chris Ricchiuto and Chris Kalafatis, and getting a preview of their supply chain presentation that they'll give during our upcoming Charging Through Change Executive Briefing Series being held November 16th and 18th. To review all the topics and secure your spot, go to dhg.com/executive briefing series. Joining us today are Chris Ricchiuto, Partner, and Chris Kalafatis, Director in DHG’s Risk Advisory Practice. Welcome to you both.
[00:01:32] CR: John, thank you.
[00:01:33] CK: Thank you.
[00:01:34] JL: As we head into the fourth quarter, it seems like supply chain issues have gained equal billing with everyday COVID-19 updates. So let's first define this term for our listeners and then talk about why we are hearing so much about this topic. Chris Ricchiuto, would you start us off?
[00:01:51] CR: Absolutely, John. I know if you pull up any newspaper today or look in the news, I think there's always an article, a front page, and it's a supply chain, and it's impacting every part of our life. If you buy things from a grocery store or trying to get gas or anything right now, the supply chain seems to be kind of front and center. So when we think about that, this used to be a piece of business operation that nobody really thought about or heard about. It just kind of worked in the background. But the issue we face now is there's so many pieces that are becoming challenged, and the problem with the supply chain is once one little piece breaks, it really impacts everything kind of downstream from what you're experiencing.
With that, what we are telling our clients, specifically with manufacturing distribution or retail companies, they need to be hyper aware.
[00:02:47] JL: Now, you used the term hyper awareness. What are several key components that we should be watching out for?
[00:02:53] CR: I mean, it all comes down to particular areas that our clients need to take a look at and maintain focus on. I think the first thing is transparency. So when you think about transparency, we're really talking about data. Data gives us the information to help us understand where potential disruptions are going to be, where products are flowing throughout all of the pieces of the supply chain, be it from our manufacturing operation, be it logistics, be it warehousing. So things like IoT or Internet of Things and technologies that are being put in place to provide additional data points and additional visibility within these places or what companies are doing right now that help increase the visibility.
[00:03:47] JL: Chris, you brought up the importance of data. How does business partner vendor data management play into all of this?
[00:03:55] CR: Now, we can't speak without thinking about business partners. When you're looking at parts of the supply chain, we've got a supplier base. We have customer base. So when we think about hyper awareness, we really need to kind of expand our visibility and i.e. the visibility using data, both upstream and downstream from our suppliers and customers and business partners. With, once again, more information and visibility, our customers and clients and manufacturing companies and distribution companies and retailing companies will have a better handle on how to manage some of these challenges.
[00:04:38] JL: That's great, Chris. Chris Kalafatis, let's talk about core processes and some of the other things that have evolved here over the years.
[00:04:48] CK: Yes, John. Most companies’ supply chains have evolved over the last 20 years to be a complex and disparate international network of suppliers, manufacturers, processes, and also technologies. COVID-19 highlighted that this current ecosystem and management principles are somewhat brutal and inflexible, and that companies might need to rethink and also re-engineer a new ecosystem and also evaluate core processes so that they can become a lot more flexible and very, very resilient, while still maintaining that all-important aspect of cost efficiency.
[00:05:27] JL: Speaking of ecosystems, how are the talent acquisition and retention strategies being impacted by these supply chain stressors?
[00:05:36] CK: The war on talent is absolutely disrupting supply chains. All industries are really scrambling to fill their open roles that they need. Having to revamp compensation structures and adapt a corporate culture to the evolving needs of workers is a supply chain disruption that will demand consistent monitoring. It's also very important that as a result that the companies must develop strategy to ensure that their workforce has the right skill sets to move their industry forward. Companies must also find ways to train their workforce to utilize new technologies and ideas and providing advanced institutional knowledge and a path for going very successful and also rewarding careers for their people.
[00:06:25] JL: Well, I've heard an acronym, ESG, used to describe a variety of other contributing factors to better management and of, just in general, the supply chain. Can you describe this for listeners?
[00:06:39] CK: Yes, John. Climate governmental investor and also societal changes and trends are rapidly focusing on companies’ practices, as it relates to sustainability. These directly impact decisions related to all aspects of their supply chain. Now, companies need to prepare for upcoming regulations that will be new and also a new generation of skilled workers and investors who will require ESG standards.
[00:07:09] JL: So we covered a lot of great topics here. Chris Ricchiuto, would you just kind of sum up what we've discussed and give our listeners some priorities around things that they should be focusing on here as they evaluate their supply chain?
[00:07:24] CR: Yeah. Absolutely, John. As we talked about, the key here is to be hyper aware. So as we had walked through some of those areas, companies need to be hyper aware of their supply chain transparency. That equates to understanding and having more data, specifically around business partners, suppliers, and customers, and using that intelligence to help their transparency focus on core processes, focus on talent. Then in the background, think about some of the sustainability trends and the focus on climate and governmental that ultimately are influencing a lot of the supply chain.
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[00:08:03] JL: Thank you, Chris, and, Chris, for coming on GrowthCast and previewing your Executive Briefing Series presentation. I'm sure everyone is looking forward to hearing all of the knowledge here at this event, so let me tell you again how to register. Go to dhg.com/executive briefing series.
I'm your host, John Locke, and I look forward to reconnecting with you soon on another episode of DHG GrowthCast. Until then, be sure to rate, review, and subscribe to DHG GrowthCast on Apple Podcast, Spotify, or Podbean.
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