Len Pannett: 0:03

looking ahead, we, we are not going to be talking about sustainable supply chains for much longer because sustainability is now part of supply chain management. Mm. We are talking about supply chain management. This shouldn't be a surprise. The goals of sustainability, which are to reduce material use, reduce energy, use, reduce wastage. Those are at the heart of good supply chain management. They are the other side of the same coin

Tom Raftery: 0:28

Good morning, good afternoon, or good evening, wherever you are in the world. This is the Digital Supply Chain podcast, the number one podcast focusing on the digitization of supply chain, and I'm your host, Tom Raftery. Hi everyone, and welcome to episode 332 of the Digital Supply Chain podcast. My name is Tom Raftery and I'm excited to be here with you today sharing the latest insights and trends in supply chain. Before we kick off today's show, I want to take a moment to express my gratitude to all of our amazing supporters. Your support has been instrumental in keeping this podcast going, and I am truly grateful to each and every one of you. If you're not already a supporter, I'd like to encourage you to consider joining our community of like-minded individuals who are passionate about supply chain. Supporting the podcast is easy and affordable. With options starting as low as just three euros or dollars a month, that's less than the cost of a cup of coffee, and your support will make a huge difference in keeping this show going strong. To become a supporter, simply click on the support link in the show notes of this or any episode, or visit tiny url.com/dsc pod. Now. Without further ado, I'd like to introduce my special guest today, Len. Len, welcome to the podcast. Would you like to introduce yourself?

Len Pannett: 1:46

Thank you very much, Tom. Delighted to join you today. So I've been a supply chain transformation consultant for the last 20 odd years. A career that I built after being an engineering officer in the Royal Navy. For the last few years I've been helping organizations to overcome the implementation aspects of their transformation bringing an engineering mindset to tackling some of the thorniest issues they've got, both at the strategic and the operational level.

Tom Raftery: 2:14

Okay. And why, why did you get into this field?

Len Pannett: 2:22

I've found that organizations tend to run into brick walls when it comes to putting their plans into practice. Developing supply chain strategy, aligning the strategy with the business strategy is is a very mature science nowadays. Even appreciating some of the difficulties of that. The implementation part, as quite a few professors will tell you at MIT and at Cranfield eats strategy for breakfast. The problems are much more multifaceted. They're much more complex in their nature and I found that helping organizations to at least achieve the prospects that they wanted for their, their big strategic changes was a much more interesting job both in practical terms as, as well as a good intellectual challenge.

Tom Raftery: 3:10

Any particular industries that you focus on?

Len Pannett: 3:14

I'm, I've been very lucky in that my client base has been very broad based. I would say if there is a center of gravity, it tends to be in the engineering and technology worlds which encompasses everything from the raw materials, extraction, energy generation industrial manufacture right down to things like electronics and fast moving consumer goods. I've had the fortune at one point to step out of consultancy and work within the timber sector as well which also brought me into agriculture. And having worked across that broad spectrum of, of different sectors, what I find is the, the problems that everybody faces, the types of problems are very common across the board. Of course, there are nuances based on the industry, based on the region and in sometimes country and location that they're at. But at, at its heart, a lot of the problems are very, very similar no matter where we go.

Tom Raftery: 4:06

And what kind of problems are those?

Len Pannett: 4:08

It could be the very operational for example, how to improve the maturity of warehouse processes. It could be very, very tactical how to clean materials data within an organization to ultimately lead to inventory optimization and, and so forth. It could be the more strategic elements such as what's the best network to deploy, where to put your distribution centers, how to arrange manufacturing within an organization, taking into account all of the various feeds that come into that. And it could be the the sort of the management of the, the leadership of that change such as setting up a transformation management office and coordinating a dozen, two dozen in some cases individual projects within that. The last few years have also seen a real big uptick as well in how to bring sustainability within supply chains. Both from a data perspective, so how to collect the right data, how to report on that, how to ask the right questions of the data but more importantly, how to take the, the action to reduce emissions, reduce material use, and, and wastage.

Tom Raftery: 5:16

Okay. And. What kind of solutions are you suggesting or are you seeing being rolled out for some of these problems?

Len Pannett: 5:24

Well, we're at a perfect storm in terms of technology. I think supply chain leaders today have the biggest wealth of potential solutions that they could use, and every one of them promises to to save them from all evils from artificial intelligence in all its guises. And, and machine learning and neural nets underneath that to supply chain visibility. And even what I would call old school approaches such as supply chain risk management. What I find with those though is whilst they might hit two of the top three agenda items that CEOs are facing, which have universally been found to be cost optimization, resilience, and sustainability. Very, very few of them actually managed to hit all three of those simultaneously. One approach, which I have seen firsthand that does is the use of additive manufacture. It doesn't apply to everything in all companies. Of course it doesn't. But for the right parts within a materials catalog for the right equipment, for the right tooling additive can not only reduce costs, it can increase resilience and improve sustainability as well.

Tom Raftery: 6:30

Okay. In terms of the sustainability angle on additive manufacturing, I know that for example, Airbus are using additive manufacturing for some components of their planes. That they were the first manufacturer to fly a commercial plane in 2015, which had a 3D printed component. And the reason it works so well for airlines is that, if I remember correctly, for every kilo of weight reduction, you save 25 tons of CO2 over the lifetime of the airframe. And with additive manufacturing also known as 3D printing. With additive manufacturing, you get something like a 90% reduction in weight and a 50% reduction in materials used, I think is what I read. Is, is that, I mean that's an Airbus specific use case, but it do those kind of numbers tally across the board.

Len Pannett: 7:30

They, they certainly can do. So additive has the advantage that when you're producing an item, you can, you basically, the material that you need for that item is what goes into it. If I'm producing something using traditional reductive techniques, in other words, start with piece of raw material and take material away from it until you have the final form. The wastage in that can be up to 90%. So, There's an immediate improvement in the materials, waste credentials by going additive. The second advantage is that the, because of the technology, you can create forms, shapes, and topologies that you just can't do using reductive techniques. Which means that, for example, as you say, you can reduce weight whilst retaining all of the performance that you want out of equipment. And you, you are absolutely right. The aerospace world is very, very invested in this because of that weight removal capability as is the space sector and, and the numbers you talk about in terms of the cost per kilo to fly something when you're in space it's, it's, could be easily be an order of magnitude above that as well. Interestingly, another sector that's picked up on this advantage is the EV sector, electric vehicle sector. Because of course removing weight increases the endurance that a battery charge will bring. The other advantage though when it comes to this this the sustainability piece is you can consolidate assemblies into a single part. So rather than producing something out of 12, 24, 50 individual elements that then need to be assembled, And you have to do that traditionally because of the reductive techniques constraints, you can additively produce something in one piece. A very good example, again, an aerospace example, is General Electric that took the fuel injectors inside its jet engines which traditionally would've had 24 individual components, and they now additively produce those as one. And the advantage of that, of course, is that you are simplifying the supply chain. So the benefits from that come in, the reduced emissions from having to set up individual production lines quite possibly in different locations as well, and bringing all of those together and assembling them. That's at sort of the, the firsthand advantage. I would be remiss to say that actually, if we're going to talk about the advantage of additive over reductive, we need to take a much more holistic view. The materials that go into additive manufacture require an awful lot more processing than a, an equivalent weight of materials for traditional. So, a producing a block of metal, for example, to go down the reductive route is fairly straightforward to produce. The equivalent weight in metal powder, which additive could easily use requires extra energy and therefore extra emissions. And obviously not all grades of material can be used as well. So you have to then go back up and look at the supply chain that produced the raw materials in the first place. Additive is quite an energy intensive process. It tends to involve high pressures, high powered lasers and electron beams and so forth. And there are stages of post-processing. In other words, once you've produced something on a 3D printer you then need to finish it with some, with, with a number of different treatments and processes as well. And that adds to the sort of the energy footprint of that part. So there has been a little bit of work done by some researchers in Nottingham University that have looked at this. And from an energy perspective, for the right parts, additive is absolutely the right way to go when you are looking at the part itself. I think where the case is made is what you described, it's the downstream impact of reducing weight, of simplifying components, and therefore simplifying supply chains as well.

Tom Raftery: 11:31

There's also, I guess the, the fact that it allows distributed manufacturing with a lot less footprint. You can email a component to somebody and have them manufacture it on site. I mean, we saw on the International Space Station, the 3D printed a component that they needed that had the, the, the, the component was for all intensive purposes emailed to them, and they printed it locally, which, you know, compared to putting it in a, a rocket and shooting it up to them that way, it's, it's a far more sustainable way of, of producing it.

Len Pannett: 12:06

Absolutely. And, and we are seeing this nowadays with the, the push that we have to shorten supply chains and, and nearshore, and reshore. The advantage of additive is it's a digital based manufacturing technology. In other words, provided you've got the production equipment, in other words, the 3D printer available, you can redirect work to that printer at a push of a button. That obviously increases resilience. So if I've got a 3D printer that is located in a site which suffers a natural disaster, or there is some interruption to the flows between that site and where the, the part needs to get to, I can redirect production to a machine that's uninterrupted, that is unaffected at the push of a button. That resilience also increases the, improves the cost side of things because of course I can produce things without incurring tariffs of moving parts across national borders as well. Although governments are becoming a little bit more savvy about this and looking at the treatment of digital trade. For the moment for example, sending the digital file for a car part doesn't incur the tariff that actually transferring that car part across borders would. So the resilience piece is, is very, very present in, in additive as is the cost. So we talked about sustainability, the cost for advantages come not just in the fact that the material that you need is the material in the finished product without that waste but also a 3D printer doesn't mind if you're producing one thing, 10 things or a hundred things, each of those with a different design. In other words, I remove the need for a minimum order quantity, which also incidentally is an advantage in terms of sustainability. I don't have the waste that I would and the threat of obsolescence and and so forth, but, because I'm not creating additional items for that economic reason, I then don't have the cost of storing the additional parts paying insurance, warehousing and so forth as well. So the cost advantages are there. Probably though the biggest advantage, I would say for additive and, and one where organizations get the biggest benefit in the shortest time is lead time reduction. Of course, watching something being produced in a 3D printer, you just need to go to YouTube to see some of these things. Is like watching paint dry. Yeah. However, the end to end time to go from starting a design, either by reverse engineering an existing part, or digitizing an existing paper 2D drawing to holding the part in your hand. Is a fraction of the time it would take to go through the same process if I was to produce things traditionally, which means that companies that are facing lead times of weeks, months, and years will find lead times reduced to days, weeks, and occasionally months for the most complicated and complex parts. And that leads time reduction really affects asset availability. It affects production interruptions. You get things back online so much quicker. So one of the again, one of the cost benefits comes in the utilization that you get back from your machinery, from your oil rig, from your train, that would be out of action because of the missing part. And now you're getting it back online a lot quicker than you would do ordinarily.

Tom Raftery: 15:30

Nice, nice. This whole digitization that you're referred to is a part of a greater trend that we're seeing not just in supply chain, but in, in, in the world. We're seeing this whole digital transformation occurring, but to, to stick with supply chain. How are we doing in terms of that digital transformation? I mean, this is the digital supply chain podcast, so we should be talking about it. How are supply chain professionals embracing this digital transformation?

Len Pannett: 16:00

That's a really good question. If we go back to 2019, we were already riding a wave of digitization, and I'm not gonna call it digital transformation, because very few companies were actually transforming. A lot of them were moving from paper-based processes to electronic based processes. And some of the leaders were getting very, very good at using those electronic processes. When Covid hit and we saw not only supply chains flattened, demand flattened as well, we all suddenly had to work from home. We saw an acceleration over the the, the, the first 18 months, two years of covid of a lot of those digital plans to transform to, to, I should say digitize and transform that might have had a 10 year horizon were now brought forward to bring the, the flexibility that a lot of that digitization of a promise to do. That meant that supply chain leaders had to number one, suddenly become very digital overnight. And that's been very tough for an awful lot of people, especially those who have grown accustomed to doing things in a traditional way. At the same time, the other thing that we suffered was that our technology become, became very, very capable. And supply chain decision makers now are faced with the biggest range of solutions that we've ever had, applying right across the supply chain field from planning, sourcing, making, delivering, returning, and enabling as well. And with the, the pressures that we've seen because of inflation and, and just from just basic economics we've seen a lot of reticence to try something for fear of failing and therefore wasting that investment. A good engineer will say that you learn by doing things well. You learn more by doing things and getting them wrong, and you learn the most by making mistakes along the way. And my feeling is that as, as a supply chain group, we're very good at solving problems. That's, that's what supply chain people do on a daily basis, if not more often. However, making that decision to try various things, understanding that not everything will work. That's been a, a difficult balloon to pop. And the organizations that have tried three or four different things to see which ones work, which ones don't, learn the lessons from both of those and then build on that, those are the ones who have really jumped ahead and have, have, have taken the lead in their sectors. And, and you can see that every day as, as you go around businesses. But you saw that during covid with supermarkets changing the way in which they do their, their planning decisions to, to be able to cope with the fact that we were having runs on, on different items, which wasn't a supply chain problem, it was a replenishment issue. But by giving people the skills and more important accountability and responsibility to sort things out at the lowest level possible. That really changed things. But that all started by having that right culture of let's give it a go and see what works.

Tom Raftery: 19:04

There is a, a phrase in tech, which is move fast and break things, which kind of is, is kind of parallel to what you're, what you're talking about, I guess. And, and it's more from kind of the startup space I guess, but in terms of supply chain and people's reticence to do this, is that, do, do you think this reticence is down to maybe organizational size or culture or a mix. Do you think that maybe smaller, more nimble companies are more open to try new things and maybe have it not go according to plan and then try something else as opposed to the larger companies who might have a bit of Yeah. Reticence to, to, to failure.

Len Pannett: 20:23

I don't think there's one answer that fits everything. I think there are so many different contributory factors. The, the current situation we've got economically which is affecting available cash flow, particularly for small businesses is a real big, big issue at the moment. So unless there is a very, very fast, almost guaranteed return on investment, small businesses are very reticent to try something new at the moment because they just haven't got the wherewithal. And ultimately change is risky. Even if you do mitigate it as much as possible, there is always a risk. So it would be a very brave small business leader to, to try something different. If there is a, the op, you know, the, the, the probability of them completely failing and, and that's the game. So the cost of living, the, the inflationary pressures that we are seeing at the moment, I think that's a big part. The I think that the, the lack of understanding of what each technology is and what it can do for that sector, for that entity is another big part. I think we've still got a very big gap between the technologists, the engineers, and the, the supply chain experts and leaders. And being able to translate the needs of one and what the other can provide in equivalent terms is still a big issue. The, the old song from the 1980s of blinding someone with science, that still applies very much now with technology. Even the largest organizations that were feeling this and, and are sort of that culture of reticence is still prevailing. I, I've still been almost dumbfounded that some of the leading companies that I've worked with as clients, actually, when it comes to the maturity of some of their processes they, they're not there. And the, the unaware of technology that is readily available, that has a very fast return on investment. It's just not there. And there's some very good examples of that, I think. Things like robotic process automation, which is using an online sorry, a virtual robot, essentially to carry out the process a human would do on a computer. That's a technology that is very easy to deploy, very scalable very easy to manage. And the benefits of that is it releases people to do things that are much more value adding. So if you think about all of those processes that are very repetitive, not particularly changing, but absolutely must have must be done, things like invoice handling. In fact, all of the processes in the p2p process. Those processes tend to lend themselves very well to rpa, and even the smallest business now can gain the benefits of that in a matter of days, if not weeks. The other element though that I have found, and interestingly this was echoed by the past and current managing director of Siemens Digital is national culture. Different cultures have a different way of embracing innovation and technology. Mm-hmm. And what I found is that others have quite the opposite. The UK currently has a major productivity problem. There was a recent report from one of the, the major institutes that said actually, we've pretty much flatlined productivity for nearly two decades because of a lack of investment, not just at the country level, but at the business level as well. And those two MDs have, have pointed out that the British culture of make and mend is too overused in a lot of organizations, whether small or big as well. Whereas if they go to an equivalent organization in Germany or France, Italy, certainly in the in the far East actually, there's a much more open mind to embracing new innovation and trying new things. Now that might be a controversial thing to say. Mm-hmm. But certainly from, from what I've seen over, over 20 years of working with organizations across the piece, that does match up very, very closely to, to what I've seen. The organizations that are internationally led within the UK tend to be more open to trying things than organizations that are very, very British in the way that they do things. So. It's a combination of factors. I think one of the things that we're going to have to do as a supply chain profession as well is the leaders that we're developing both within our organizations and academically have to be imbued with a mentality of the only thing that is constant is change and technology now is part of that. I would add as well that very quickly, sustainability is now part of that as well. And imbuing those two cultural viewpoints right from the very, very beginning is what's going to make them more successful in their own careers and the organizations they work in over the next few decades.

Tom Raftery: 25:07

Okay. What about, how do I put this nicely? What about. I, I wanna say supply chain professionals being almost too specialized, knowing absolutely everything about their narrow field of supply chain, but not having a kind of a broader overview of the entire flow of a supply chain. Is that, do you think that might be a factor as well in not knowing what other solutions are out there?

Len Pannett: 25:40

Yes, absolutely. And, and this is again, something that, that's been very obvious in the way in which the market for supply chain talent has, has shaped. The days of being a specialist in just procurement or logistics without having any involvement or appreciation of the other functions within supply chain, those have quickly fallen by the wayside. Certainly the the point at which in your supply chain career, you need a much broader understanding of the entire supply chain functional landscape that's been getting younger and younger and, and, and sort of earlier and earlier. And part of that is because organizations and the ecosystem that we exist in are complicated. They are complex. And unless you understand how procurement affects logistics, how the return part of supply chain affects planning and organizing things and, and managing things with that holistic viewpoint. You quickly run into bottlenecks and you quickly run into broken supply chains. The organizations that have ensured that they're continuously developing people's talents to give them that broader perspective are the ones that have succeeded most. And that's not just a, a sort of an educational thing and a training thing that's even operational. I always found it very eyeopening working with organizations that seem a little bit dysfunctional to get everybody involved in the supply chain in the same room at the same time. And everybody explained what their role is in that process. There are several companies available on the market that will run business games that will do this virtually and, and some that will do this using paper and pen in the room. But that exercise of bringing everybody together so that each person can understand where they fit in the chain and what the people upstream of them are doing and why they receive things in the way that they do when they do. And why, what they provide to the next person down the chain and so forth needs their information, their products, their what, their output for that appreciation really does change dynamics. And the, the value that you gain from just doing that simple exercise. You see a transformation in a matter of days afterwards. So that's the operational level. That all comes though from having that, that all round view in the first place. And that's where I think some of our the academic courses now to bring that more rounded education are, are gaining in demand. And I just have to hope that the management education side of things picks up on this as well.

Tom Raftery: 28:15

If only there were some kind of, I don't know. Podcast say that went out twice a week every Monday and Friday with over 320 past episodes covering all aspects of supply chain. Hmm.

Len Pannett: 28:35

It's true. And I, I I, I, I think that nowadays you said ignorance is inexcusable. We have, you know, I mentioned earlier that we've got the biggest range of technology solutions. We have the biggest range of information sources with fantastic podcasts as readily available at our fingertips in the form that we want to digest them in, so there really is no excuse.

Tom Raftery: 28:57

Great. Then we're coming towards the end of the podcast now. Is there any question I haven't asked that you wish I had or any aspect of this we haven't touched on that you think it's important for people to think about?

Len Pannett: 29:09

So I've been to quite a few conferences and seminars over the last few months, and one of the encouraging things that I've seen out of all of those is the hunger for supply chain leaders, but also managers as well to embrace the idea of sustainability in what they're doing. We've been talking about sustainable supply chains for a little while now. What's been encouraging out of this is that looking ahead, we are, no, we, we are not going to be talking about sustainable supply chains for much longer because sustainability is now part of supply chain management. Mm. We are talking about supply chain management. This shouldn't be a surprise. The goals of sustainability, which are to reduce material use, reduce energy, use, reduce wastage. Those are at the heart of good supply chain management. They are the other side of the same coin. So what I, I think what we will be seeing soon is that shift in perspective, that shift in culture and organizations are going to have to embrace that as well in, in everything that they do in their governance and their people, their processes and their tools.

Tom Raftery: 30:16

Yeah. Yeah, yeah, yeah, yeah. I mean, Sustainability to my mind just makes complete sense because if you're making your organization more sustainable, you are de facto engineering waste outta the system, which adds to your bottom line. I mean, it, it makes financial sense as well as everything else. And in fact, long term, I think the items that are more sustainable will be lower cost rather than higher cost than goods that are not.

Len Pannett: 30:43

Absolutely right.

Tom Raftery: 30:44

Any who? Len, that's been really interesting. If people would like to know more about yourself or any of the things we talked about in the podcast today, where would you have me direct them?

Len Pannett: 30:55

They can contact me directly. My email address is len.pannett@supercharged.com and I'll pass you the details to include in the podcast afterwards. And they can also look at my book on additive manufacture in supply chains Supercharged how 3D Printing Will Drive Your Supply Chain available in all good bookshops.

Tom Raftery: 31:15

Phenomenal, phenomenal. Len, that's been great. Thanks a million for coming on the podcast today.

Len Pannett: 31:19

Thank you very much, Tom.

Tom Raftery: 31:21

Okay, we've come to the end of the show. Thanks everyone for listening. If you'd like to know more about digital supply chains, simply drop me an email to TomRaftery@outlook.com If you like the show, please don't forget to click Follow on it in your podcast application of choice to be sure to get new episodes as soon as they're published Also, please don't forget to rate and review the podcast. It really does help new people to find a show. Thanks, catch you all next time.