Talk to anyone in the cleaning industry about the past four years, and one word comes up again and again — disruption. Since the early days of the pandemic, supply chains have faced a rolling series of unprecedented problems, as demand outstripped availability and transport routes collapsed. Four years on, there is still a sense that disruption might be the new normal. Given the uncertain political environment, increasing climate change events, and crises nobody has yet seen coming, it can be difficult for any business to plan for stability.

Australian companies are still facing a variety of supply chain challenges, particularly around shipping and congestion. When a bottleneck develops, priority is often given to global companies who trade in large enough quantities to fill a whole shipping container — and can pay more. Other companies might find themselves waiting months to get an allocation.

Andrew Clark, Managing Director of Logistics Cloud Co, says it’s helpful to look at these challenges from two perspectives: the macro level of global disruption and what can be done on the micro or local level to mitigate supply problems.

“Those macro things are what’s going on in the world,” Clark says. “Maybe the stock market is having the wobbles, or a ship has got stuck in the Suez Canal, doubling the price and adding a couple of weeks to the shipping routes. When things get out of kilter, they become very difficult to correct. And what can you do about that? Well, the short answer is not much — you have to go without.”

Looking to the local

Where businesses might find it easier to plan is by paying close attention to the local market.

“This means knowing what your competitors are doing and the trends in the market that you need to respond to. That’s where market data and information become really important, and you can get into forecasting.”

Some Australian companies have found that switching to a more local focus has helped them deal with the major disruptions resulting from COVID-19. There has been a trend away from relying on China for manufacturing and supply, says Andrew Clark, with many companies looking both closer to home and further afield — to places such as India. Moving forward, varied sources and flexibility may prove key to steady supply.

“People shouldn’t put all their eggs in one basket. Having alternate sources of supply is really critical.”

Christopher Joyce, CEO of Asepsis, adds that taking a local approach to steadying the supply chain isn’t just about finding domestic suppliers; it’s also about being more strategic regarding what your business brings to an uncertain market. Specialisation is the order of the day.

“You’ll go to a trade expo and there will be four suppliers with scrubbers, and the only real difference between them is that one is green, one is red, one is yellow, and one is blue,” Joyce says.

He has noticed a trend towards cleaning companies and supply companies merging to become larger entities capable of focusing on particular industry areas rather than trying to be everything to everyone.

“I think that the change we’ll see in the next two or three years will be a rationalisation of the goods or services being provided. Hopefully, it moves towards a situation where one business says, ‘We’ll look after education, that’s our niche,’ while someone else focuses on the retail market, and a business like ours looks after health and aged care. There are so many focused market segments now.”

I don’t think there’s anything in the world that could have predicted where we would be right here today.

Technology to the rescue?

Many are hoping that developing technologies, including AI, will help businesses spot potential supply problems before they become an issue. However, Tom Culver, founder of the Robot Factory, believes that the kind of catastrophic disruption we’ve seen lately would have been difficult for anyone to plan for.

“I don’t think there’s anything in the world that could have predicted where we would be today,” Culver says. “AI models are a little better than they used to be when it comes to predicting potential supply chain issues, but most AI works off data we already have. If the data is starting to become wildly unpredictable, there’s not really good past data to predict the future. I don’t think catastrophic things can truly be predicted.”

Clark agrees, saying that while lessons can be learned from history, the future isn’t always predictable, even with the best models available.

“AI is great at pattern matching. It might be able to look at wider data sets to try and come up with better forecasts based on what happened historically. But I’m not aware of anyone using AI to model future demand based on something like social media posting.”

Ian Farmer, teacher and technology evangelist at the University of Technology Sydney, adds that we’re only just beginning to see the potential for AI to revolutionise supply chain management. Technological change will happen so quickly over the next five years that it may add to the sense of uncertainty. A key skill for the future will be learning how to deal with that ambiguity.

“People need to get used to rapid change,” Farmer says. “Emotional Intelligence is important. You need to be agile, curious, and able to develop scenarios to manage the future. That’s where technology can help. If you learn to ask the right questions of AI, you can get different scenarios and outcomes, which gives you a sense of certainty within an uncertain world.”

Farmer also notes that technology can help businesses plan for disruptions by creating a “digital twin” of a business that can then be tested under various conditions.

Under various scenarios

Using technology to simulate different scenarios can help businesses identify potential issues before they arise.

“For example, a facilities management company could upload all of their parameters or history into a computer model,” says Ian Farmer. “You can then run scenarios against that model. You might ask, ‘What happens if another COVID hits? What will that do to road traffic? What if there’s a fault on the trains?’ You can model these things and see how the variables interact. That sort of predictive modelling is a key part of the future.”

In the past, predictive technology was prohibitively expensive, but recent advancements in AI have made it more accessible for smaller businesses. Even better, you no longer need to be a data expert to take advantage of it.

“It will get easier and easier for small businesses to create their own algorithms and models to predict their future,” Farmer says. “For example, if you’re in Perth, you don’t need to know about Sydney’s traffic jams. You can overlay data that’s specific to your environment.”

At the end of the day, it’s not about knowing the technical stuff, but about asking the right questions.

Facing the future

Farmer believes the rapid pace of technological change means even free models are becoming as reliable as some of the expensive proprietary systems that previously dominated the market. However, Andrew Clark believes that human judgment still plays a critical role in deciding what the future might hold.

“Even if the technology makes predictions, it ultimately comes down to human judgment,” Clark says. “You’re going to spend millions of dollars based on a judgment call, using the best data you have.”

Tom Culver agrees and adds that traditional communication methods still hold great value.

“With the supply chain, what we do isn’t AI-focused at all,” Culver says. “We stay very close to our suppliers, with almost weekly calls, and keep an eye on what our competitors are doing. We’re all in this together.”

Christopher Joyce also emphasizes the importance of relationship-building in good supply chain management.

“It’s about getting to know people and understanding their needs and requirements,” Joyce says. “You’re not just a salesperson — you’re a valuable partner in their business.”

This kind of close relationship means that a rep from a supply company can track where high demand may arise and relay information about products that are currently in high demand. In short, it’s about creating reliable partnerships between suppliers and customers to mitigate potential supply issues.

Farmer acknowledges that while building strong relationships will always be important, technological innovations should be seen as a tool to check in with far more people than one person could manage alone.

Ultimately, he remains optimistic about the role of technology in creating certainty during uncertain times. While building relationships with local suppliers and considering alternative sources of supply will benefit businesses, the most reliable way forward is to expect the unexpected.

“At the end of the day, it’s not about knowing the technical stuff — it’s about asking the right questions,” Farmer says. “That’s the critical skill you need for the future.”

Photo by CHUTTERSNAP on Unsplash