“I think if you could summarize what the trend is going to be in the future - It's going to be volatile. That's the trend.” - Tim Richardson, Founder and CEO of Iter Consulting
Complexity. Pressure. Volatility. Supply chain leaders are heading into a future that isn’t certain and seems to be growing more complicated with each passing year. 2025 promises to be no different.
In fact, in this episode of Art of Supply, I spoke with Tim Richardson, Founder and CEO of Iter Consulting, about some of the forward looking supply chain trends that businesses should be prepared to address in the coming year. His biggest concern? Volatility.
Tim has seen decades of ups and downs in the global supply chain, but never a time, until now, when there has been so much attention on a company’s supply chain and on supply chain leaders themselves.
As Tim put it, they’ve been “thrust into the C-suite” in recent years, and, because of that, having a strong grasp of the landscape with all its complexity and being able to communicate simply and effectively with the business (and even to the public) is more important than ever before. This is especially true with all of the volatility and uncertainty still on the horizon.
Speaking the Language of the C-Suite
Understanding all of the complexity in your organization’s supply chain is one thing… communicating that complexity effectively to your stakeholders and executive leadership is quite another.
It’s a bit of a semantic tightrope walk. On the one hand, supply chain leaders need the deep technical and data-driven expertise to understand their domain, but on the other, they have to be savvy communicators who can distill that information into manageable sound bytes and connect it to what the business cares about the most.
“It’s key for supply chain leaders to talk in the language of the C-suite,” said Tim. “Supply chain and operations can be pretty technical subjects, but the C-suite wants to talk about things like costs, working capital, resilience, time to market – the things that really move the needle. That’s the language you’ve got to use.”
Greek mythological figure, Daedalus, a clever inventor and master craftsman, is said to have created a labyrinth so complex and convoluted that even he struggled to find his way out of it. He narrowly escaped being ensnared by his own innovation. Global supply chain leaders might not be trying to trap a minotaur (or pass a 10th grade English test), but they face a similar danger.
“The danger is we can get lost in the complexity of what we’re trying to do,” especially when companies are multi-sourcing. “That’s a much more complex activity and you’ll potentially need more work in progress, but that’s counterbalanced by less logistics and quicker responsiveness to the market.”
Fortunately, there are so many technology solutions that can help supply chain leaders find their way out of the labyrinth, with quality data as the starting point.
“You can no longer rely on individual knowledge because it just doesn’t work in a globalized way,” he said. “Technology has profound implications, but we still have to position the supply chain as how it adds value, not just how it’s a cost to be minimized.”
Economy and Ecology
No one knows yet the extent to which tariffs, inflation, and other macro-economic pressures will reshape the global supply chain in the coming year, but the consequences are significant enough that supply chain leaders have to make strategic, long-term decisions and make scenario modeling a fast priority.
“Wherever tariffs start, there will be retaliations around the world and potentially drive inflation and recessions into economies, so you can’t spin supply chains around on a pinhead,” said Tim.
With so much uncertainty ahead, modeling is even more important for businesses to anticipate, test, and plan for a range of scenarios “to work out what is really going to move the dial in your business,” regardless of what happens.
Working through a range of scenarios that keep in mind the nature of your business and its goals is also an important way for companies to develop resilience when things get rocky.
“When you’re modeling, you have to recognize that you’re either looking to get the lowest cost, accepting the risks you’re taking, or you’re trying to get something that’s resilient and maybe you don’t need the lowest cost,” said Tim. “That’s where we enter a business judgement. You just need to be clear about where your risks are, and modeling helps you understand those risks and helps you work out what the implications are if some of those risks become reality.”
This same kind of forward-thinking modeling and mapping also applies to environmental considerations in the supply chain. According to Tim, getting a handle on the data and setting clear parameters and expectations right from the beginning can go a long way towards enabling a company to achieve their environmental goals.
Tim always challenges his clients to think about these core issues at the outset:
- What data do you have or not have?
- How reliable and clean is it? (and, he said, “it’s never as good as people think”)
- What parameters are you trying to drive?
- What are you trying to achieve?
- What are the scenarios you’re going to consider?
Bringing together all these factors and thinking deeply through their implications can help companies avoid ‘greenwashing’ and give the organization a clear understanding of its environmental impact.
But, he says, this kind of modeling can’t take the place of an all-around well-run business in its capacity to drive impact.
“Businesses that are genuinely well run and have thought through all these things and are addressing them actively, and businesses that are more profitable tend to have higher caliber people working for them and have the space to focus on how the business can be better.”
Forward Looking Trends
“Unfortunately, it feels like we’re in an ever less secure, stable world,” said Tim, which he predicts will cause a reaction that’s likely to be characterized by a pronounced shift back to localization as businesses “pull things closer to home.” He sees a trend where companies retract as a way to regain control and security and to mitigate the after-effects of tariffs that are making an already uncertain landscape even harder to predict.
Will organizations become more protective of their economic interests and goods? If Tim’s right and the answer is ‘yes,’ there could be some significant disruptions to the flow of goods, which would challenge businesses to become even more resilient and adaptable (making that scenario modeling Tim described even more business critical).
“I think we’ve obviously been through this hugely volatile period, and I think we would be naive if we think that volatility isn’t going to continue.”
And, perhaps even more naive not to make a plan for it.
