There was an interesting presentation today during IMARC Online 2020 from Sundeep Singh, Group Procurement Officer at BHP, titled Developing Resilient Supply Chains in 2021 in which he covered how the company has been working with its key suppliers during the COVID-19 pandemic era.
He stated: “We knew our partnerships were going to be a key differentiator for shared business value, but the way that came to life through COVID-19 was so much more amplified than anything we could have expected…I think resilient supply chains are built with a culture of partnership that will really help us capture competitive advantage and shared business value.”
Singh said supply chains have had to withstand massive market change, rising trade tensions, disruptive technologies, the effects of climate change and nowCOVID-19. “These challenges have really showed us that supply chains not only need to be cost effective and reliable, but truly resilient and sustainable. It showed us the inter-connectedness of the supply chain at its very depth – with impacts on things like people movement that previously had never been under threat. Navigating these complexities to thrive in a new normal requires us to rethink our supply chain, to build a supply chain that can actually adapt and remain agile – all the while remaining safe, removing waste and…pulling cost out!”
Once it was clear COVID-19 would present a significant challenge to its operations, BHP’s first priority was to keep people safe. “We were quick to enforce strict social distancing and hygiene protocols. For the supply chain, we triggered the traditional responses such as seeking alternative sources of supply for things like hygiene products. We managed our inventory levels for critical spares for our mobile and fixed plant, we even stepped up data analytics for supply chain transparency – however, none of this alone gave us our resilience.”
Then Singh addressed its supply chain partners directly: “Over this past year, it is with your support that BHP’s global supply chain adapted quickly to respond to the crisis. The competitive advantage of a resilient and sustainable supply chain comes from the work that we do together – how we innovate, how we improve, how our relationships unlock future value opportunities that are hard to replicate and that others don’t have. Partnering enabled us to react swiftly and confidently in these times. It has allowed our supply chain to rapidly repair with preferential treatment, re-route through joint collaboration and re-invent for new value.”
He then gave some specific examples. BHP’s partnership with Compass, who provide facilities management support for its operations across Australia, was critical during COVID-19. It included everything from hygiene supplies, to the safe movement and accommodation of people. “We could not have done this successfully with a transactional approach. Instead, partnership led Compass through this time, and through this difficult year, to build a facility in Perth, known as…’The Academy.’ The Academy includes a training kitchen, juice and barista training stations, simulation accommodation rooms. The benefit is twofold: our BHP Residents benefit from the higher standards and the skills of the Compass staff to manage this new COVID normal. Compass benefits via improved customer satisfaction, but also the ability to train their people more broadly, for roles outside of BHP. We now have continued safe flow of people and a better experience for our workforce on site.”
On increasing supply chain transparency, BHP developed a ‘Supplier Illumination program’ where it was able to leverage advanced analytics via AI and working with Deloitte. “This helped us to create visibility through multiple tiers of our supply chain. We can now see information on our suppliers’ suppliers and their suppliers. We all know increasing visibility into the network to manage disruption is at the heart of future supply chain management–but what do you do with those insights…you can have all the control towers and data transparency for your supply chain but what are your relationships to repair, reroute, re-invent together? The resilience came from taking those analytics and sharing them with our other partners, which in turn made their supply chains more robust.”
These shared analytics helped BHP explosives provider Dyno Nobel to mitigate disruption in their supply chain. The illumination was also a catalyst for Liebherr to review their stock holdings and identify parts that were better supplied locally. It also helped them identify second tier suppliers requiring monitoring if lockdowns were to persist in Europe. “This meant that parts still flowed and we took actions together where we saw our tier 2 or even tier 3 suppliers being impacted. Through partnerships, we not only got advanced analytics but had the right collaboration to enable our supply chain to adapt quickly and meaningfully – this is real resilience.”