Over the past few weeks, I have been working on an increasingly large number of Business Acumen training projects involving Supply Chain teams and the success they bring to their companies.
During this time, I’ve had the opportunity to conduct research and interview subject matter experts in the pharmaceuticals, consumer products, semiconductors, automotive, and industrial materials industries.
As I have been compiling the base conditions and writing the “wobblers” for the business simulations, we will use to teach the business acumen skills supply chain audiences need, I have noticed some fascinating patterns in terms of the significant trends impacting supply chain leaders and contributors. It’s my pleasure to share some of the insights with readers of this blog.
Geopolitical Uncertainty and Trade Dynamics
By far, this is the most significant issue being discussed by every client I work with. Changes in trade policies, tariffs, and regional instabilities are prompting leaders to diversify supply sources and rethink global sourcing strategies.
Everyone is trying a little something different, but all seem to be taking significant actions by finding alternative local supplies even if the cost is higher and the quality is lower. As one SME shared with me, “It’s an easier conversation for our salespeople to explain to a customer that we have to raise the price by 10% to cover costs instead of having a difficult conversation about not being able to deliver product for about a month.”
Data-Driven Decision Making
This has been a really strong driver of the need for more business acumen skills. The integration of advanced analytics and real-time data empowers leaders to optimize inventory, forecast demand more accurately, and drive strategic planning.
Most executive-level leaders understand this, but we are seeing too many senior-level and middle-level leaders with almost no business acumen related to these topics. They don’t understand the impact of decision-making on key financials like the balance sheet, cash flow, and drivers of shareholder value.
Digital Transformation and Artificial Intelligence
I will admit that I was surprised that “AI” didn’t top the list, but what I discovered is that the key trends revolve more around the process of digital transformation than just the concept. This means there are cultural issues related to using the tools, which tools to use, and how to interpret outputs to make better business decisions.
Leaders are leveraging AI, the Internet of Things, blockchain, and robotics to drive end-to-end visibility, improve efficiency, and enable real-time decision-making.
Again, however, it seems like only the executive leaders understand the impact and have the business acumen skills to know which levers to pull and which decisions to make to drive financial performance.
A De-emphasis on Sustainability
Nobody actually really came out and said it, but it seemed obvious from the research and interviews that the concepts of sustainability are less of a priority in the new US administration than the previous one.
Issues related to reducing carbon footprints, ethical sourcing, and building circular supply chains to meet regulatory demands and stakeholder expectations persist because they benefit both big business and the planet. Therefore, stronger and smarter business acumen is required to make informed choices with limited budgets that still have significant financial and green impacts.
Risk Management
All of the Supply Chain leaders I spoke with mentioned Risk Management strategies in some way. In an era of pandemics, geopolitical tensions, and cyber threats, robust risk assessment frameworks and agile contingency planning are mandatory tickets to the party.
However, not all levels of risk management are affordable, and supply chain leaders are tasked with doing more with less, which increases their need for strong business acumen to understand the short-term and long-term tradeoffs.
In summary, each trend is reshaping the operational and financial aspects of the supply chain, which requires a dramatic shift in business acumen and leadership skills to navigate today’s complex global environment.