I interviewed Mona Xiao who discussed Sustainable Supply Chain.
It’s great to speak to you today, Mona. And I’m looking forward to hearing your views on the topic of Sustainable Supply Chain. Can you provide a brief background of yourself?
Okay. Actually, I have 20 years’ experience in some of top 500 famous companies, such as Siemens and Motorola. So I also have some theoretical understanding of supply chain from my MBA study. Here now, I have some personal understanding which is different from others to share with your. So I am very glad to accept your interview today.
What is Sustainability in the Supply Chain?
The Sustainable Supply Chains means that the Supply Chain is quite stable and has the ability to prevent unexpected risk can run in a quite long term as market demand goes. This is my understanding.
So I think it is very important for the development of Supply Chains. Supply Chain continuing operations in various environments, which influence supply chain’s performance and processes for every supply chain member, and it will impact the survive of the business. So I would emphasize that sustainability is a critical factor of supply chain.
Can you talk about how it’s done effectively?
For the sustainable supply chain, in my understanding there are several factors. The most important factor is R&D. The normal R&D is excluded in supply chain operation. But I would say that R&D is a critical factor for supply. First of all, the R&D would determine the projects, confirming the function and how friendly to be used, what the costs constructed. R&D design will totally change the marketing and the orientation of the customer experience of the product.
And secondly, the new product BOM constriction will determine the how the product availability contribute to delivery, and profit potential, which is resulted from costs if raw material, production capacity allocation, and also the raw materials SKU performance, procurement, inventory allocation, transportation, and other costs and marketing concerned factors.
And also in some industries, the upgraded product for next product generation is a consideration for the industry sustainable and the continued incoming of business profit. So I would say product upgrading is very important.
The sustainable depends on efficiency and agility and how high they are, and these factor also impact the market share and profit of business. SO far R&D is not involved in supply chain. And it’s not very unreasonable to measure in supply chain performance without consider the R&D. So that’s why a lot of supply chains cannot do a complete precise market planning and with limited information to get an accurate master plan, because supply chain can’t be secluded from R&D.
So the second important factor is the healthy of supply chain. The second factor I would emphasize is transparency and the health of supply chain. A healthy supply chain should have the least avoidable expenses. A lot of factors are influencing the health of supply chain. The transparency is critical to the healthy operation environment. A stable supply chain results to a rational allocation of materials, capacity between supply members leading to a long-term and reliable and a stable cooperation. The transparent information benefit to the upstream and the downstream in the supply chain orchestrated operation to acquire material and location with lowest cost and the logistics prestige, which were the great influence of supply chain operation. Deliver effectiveness is closely depend on operational efficiency and agility.
Supply chain transparency should be indicated for performance control to decrease corruption and moral issues, such as integrity. In all kind of the supply chain operation behavior, the health of supply chain increase the transparency can decrease risk of corruption and immoral issues. So the transparency is more and more important in the health of the supply chain. And with the transparency, there is more in the more in the manual operation can be measured in a very quantitative, very effective way, and very accurate ways.
We understand that the transparency information can also improve the supply chain’s operation in orchestrated efficiency and agility of demand changes, order cancellations definitely reduces the costs for operation from the upstream supplier and the downstream customers. So the transparency is also very important.
Actually, I would like to call the supply chain as a supply cycle rather than the supply chain because each end of rolling cycle from demand planning, production, delivery, procurement, transportation, would be the beginning of the next rolling cycle. And this express our expectation that I are seeing how far the supply will roll its way to future.
And can you talk about where you see some success?
Success. Some success examples.
Okay. Success. Right? It’s the success… Concerning the success, I mean the supply chain can be a very good orientation and have a very simple operation and have a very smooth cooperation, efficiency process, efficient cost control, and inventory effective allocation. Success will be present as a very smooth operation through all the way from the very beginning of design, development to production and delivery. So that the supply chain also have a very orchestrated operation and can get a lot of efficient customer order fulfillment with satisfaction.
So each supply chain can have a very strong control of R&D. And I mentioned that the transparency will also keep a stable supply chain to maintain supply operate in a very healthy, efficient and cost-effective environment, and outcome of high profits for whole business.
Thank you, Mona, for sharing today.
About Mona Xiao
ODM Supply Manager at Motorola Mobility