October 15, 2024 • 28 mins
Join us in this episode of Supply Chain Pioneers as we discuss with Patrik Kalmbach, a strategic leader in supply chain and procurement excellence, about transformational change management and supply chain risk management. Discover how Patrik's background in mathematics led him to excel in this field, and gain insights into the challenges of managing complex supply chain systems and the importance of risk management.
Learn about Patrik's experiences in consultancy, operational management, and strategic project implementation within one of the biggest life science healthcare companies.
Whether you're in the field or interested in supply chain innovations, this conversation will leave you with valuable lessons and practical approaches.
00:00 Introduction to Supply Chain Pioneers
00:38 Meet Patrik Kalmbach: A Strategic Leader
01:24 From Mathematics to Supply Chain Management
02:35 The Dual Nature of Supply Chain Management
04:02 Navigating Between Planning and Operations
05:12 Mastering Change Management
09:04 The Importance of Risk Management
14:00 Lessons from Hurricane Harvey
16:29 Operational vs. Strategic Projects
20:23 Advice for Aspiring Supply Chain Professionals
22:24 Practical Approaches to Change Management
25:41 Tennis and Supply Chain Management: A Unique Comparison
27:04 Conclusion and Farewell
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:00):
Welcome to the supply chainpioneers podcast, where we highlight
industry leaders on the forefrontof innovation and technology in
planning, procurement, and logistics.
Hosted by your supplychain pro to know off then.
Supply Chain Pioneers ispowered by EverStream Analytics.
(00:21):
EverStream predictive insights andanalytics to make your supply chain
faster, smarter, safer, and leaner.
Go to everstream.
ai to book your demo today.
Hello everybody.
And welcome to a new episodeof supply chain pioneers.
And with me today, I have PatrikKalmbach, who is a, strategic leader in
(00:43):
supply chain and procurement excellence.
He's great when it comes totransformational change management
and also supply chain risk management.
And he currently works at oneof the biggest life science
healthcare companies in the world.
And with that, I want to welcome Patrik.
Thanks all for having me.
It's an honor to be here.
Yes, it is an honor for us.
(01:03):
So before we really start gettinginto things and why we talk
today, maybe you want to introduceyourself a little bit really quick.
Patrik Kalmbach I'm 42 years old.
I live in Düsseldorf, I'm married.
I have three kids, and as you saidsince almost 14 years, I've working
for life science company in Germany.
By education.
I'm a mathematician.
And I think that's about me.
(01:24):
As you already hinted at, you're,one of the smart guys studying
mathematics, but also getting a PhD.
So how did you actually end upstarting in supply chain management?
Yeah, that's an interesting question.
To me at least, mathematics,I never considered mathematics
as an end in itself.
To me, it was a nice playground to, applyanalytical thinking and uh, to develop the
(01:48):
ability to deconstruct complex problems.
And this is where Ithink my strengths lie.
And, then when I was, thinkingabout, okay, how can I make an
impact in the real world with this?
I thought supply chain management iswhere quantification meets complexity.
this was the perfect playground for me.
(02:09):
And this is why I lookfor a job in this area.
That's pretty interesting.
So once you started in supplychain management, you went
directly into consultancy, right?
So you consulted on supply chaintopics, which is probably very
complex, especially because youdid a lot in supply chain planning.
(02:30):
Why is this a good start to a topic thatis as complex as supply chain management?
To me, supply chain management isabout two fundamental components.
One is the planning part, whichis the flow of information and the
other is the execution of plans.
And I like this dual structure becauseit has a lot of complexity, what I
(02:54):
like, and you've got to find creativesolution and apply analytical thinking.
And you can measure the outcome, right?
And especially the planningpart, I thought was close
to where I came from, right?
How much do we need of what, where,and when this involves forecasting,
(03:15):
demand planning, inventorymanagement, and also how to build.
A resilient and adaptable supply chain.
And the other part is also superinteresting is the execution, namely the.
Organic organizing thereality basically, right?
Where it's more focused onoperational excellence on real time,
(03:36):
problem solving, actual management.
I find this super, superfascinating, this dual nature.
And at least at the beginning, I thoughtthat the planning part appeal more to my
mathematical and problem solving skills.
as it requires this.
Foresight and the ability to navigatethrough complexities And, uncertainties.
(03:59):
And yeah, I never regret that step.
Quick follow up question on that,is it that you think that people
that work in supply chain planningcan always transfer into an
operational role and then vice versa?
Can people that come from anoperational role always transfer
into supply chain planning becauseit needs different skills in a way?
(04:20):
It does need different skills in a way.
It depends on your on your interest.
I would say, for sure, I would neversay you cannot navigate from one to
the other, because at the end of theday, I think it's nothing which you.
Learned by education, you learn the thingson the job therefore I would believe, it
(04:42):
makes sense to, to to be in both worlds,even if you concentrate on one of them.
If you don't know how to organize thereality, you probably will never be a
good planner and vice versa as well.
So I would actually recommend to atleast make a step into both parts.
but why shouldn't it be possibleto navigate from one to the other?
(05:05):
You then worked a lot on continuousimprovement as part of your consulting
career, and that can be a tedious topic.
When you think back about this andhow you had to convince new groups to
change, which I think you're a masterin change management, what was it you
took away from the whole experiencefor your further professional career?
(05:28):
Yeah.
At the beginning I had to learn the hardway that if you have good arguments and a
good business case this does not yet meanthat it's easy to implement the change.
I had to understand the importance ofdiplomacy, and it's not just about.
opportunities and then making themhappen because yeah, what obviously is
(05:50):
important is that no one feels blamedabout the past inefficiency, right?
And everybody needs to at leastfeel part of the success story
if it hopefully becomes a successstory and, how to do this.
I think what you got to do is providegenuine reasons Why improvements are
(06:11):
impossible now and why they have notbeen possible in the past, be it a
new technology, a new methodology,a shift in market dynamics, or just
management attention, just to say,I'm sure you worked on this before
and you tried your best to becomebetter also the past, but now is the
(06:34):
moment when we can do this together.
Together and your communication withthis, addressing different management
levels, varying degrees of seniority, justindividual personalities, the right tone.
I think this is super importantand I had to learn this.
This is super important.
(06:55):
Maybe I can give you an example.
I, Was part of the development of astrategy to reduce inventory of spare
parts and we had data proving that ourconcept works, that we can actually
reduce spare parts, but put yourselfin the shoes of the warehouse manager.
This person is not just necessarilyinterested in the cost of the inventory
(07:19):
of the warehouse or the working capital.
These guys take pride, of situationswhere they were able to locate a
spare part, which maybe was noteven electronically, logged.
And Reducing inventory can be a threatto them because they cannot get this
sense of achievement anymore if you.
(07:42):
the spare parts having the empathy andto take them on board and make them also
be part of the success story is super keybecause you will never be successful if
you just say, Hey, these are the numbers.
And I'm sure you can livewith two parts, less of this.
this was a profound learningexperience for me in that time.
(08:02):
That sounds very interesting,actually very cool.
And then eventually you really justhave to show them, okay, in the new
scenario, what is your worth then?
So super interesting, but then you startedto work on one of my personal favorite
topics, supply chain risk management,and you really spearheaded what I would
call a massive transformational project,which involved an IT implementation.
(08:27):
You had a lot of organizationalchange management.
You had to build up your own expertiseon a topic that was very, not so
known in the market back then.
So what were for you, thebiggest takeaways from that time?
So you then worked on your,on one of my favorite topics,
supply chain risk management.
You spearheaded a really big, massivetransformational project involving
(08:51):
IT implementation, organizationalchange management, while building
up your own expertise on a topicback then, not really known as much.
So what were your three biggesttakeaways from that time?
What I think is important when it comesto supply chain risk management is first
of all to define what is risk management.
And I often see people mixing up riskmanagement from operational management.
(09:17):
To me, risk management, first of all,is the anticipation and mitigation of
things which are unlikely to happen,but carry significant impact, where
as Operational volatility, let's sayis more about things which frequently
happen, but which hopefully thendo not have a significant impact.
(09:39):
Because if you have frequent thingshappening with a significant impact,
your business will be gone soon.andI think it's super important to
differentiate between these two becausewhy actually If you want to mitigate
things or let's put it differently.
If you think you can buildyour supply chain like this.
(10:00):
But you will continously have issues.
Then you rather build it like that.
This is more because of thingsthat you can frequently measure.
whereas with risk management, youcan build your supply chain like
this and you will be fine most of thetime, but once in a while, the bad
thing happened and you should have.
(10:20):
Build it like that.
And this is a huge difference also inconvincing people to invest maybe in
a more resilient supply chain, becausemost of the time you will be fine with
a less resilient supply chain, right?
And this is, I think the numberone distinction make clear this
distinction between risk management andoperational management, let's call it.
(10:42):
The second thing.
Is the commitment of the leadershipand not necessarily the commitment
to risk management, that you haveleaders who generally care about the
longterm wellbeing of the company.
(11:03):
You work with a founder.
They obviously have that.
But if you have an employed manager, theyoften have more short term goals and will
prioritize other things more than thingswhich are not that likely to happen.
I work with leaders telling me,Hey, Patrick you're telling me
(11:23):
something, but this is a black swan.
These things never happen.
And are right on the one hand side,but if you generally care about the
things which rarely happen, but whichhave a huge impact on your company.
Then you protect your company against it.
where as if you are an employed managerand maybe have more short term goals
(11:45):
and will be monitored for your costsand sales, et cetera, even if this bad
things happen, they probably have a goodexcuse saying, Hey, this was unforeseeable
and nobody could see this happening.
So we weren't prepared.
and this is the big importance.
I think if you have people who generallycare about the wellbeing of the company,
(12:07):
they do this investments in riskmanagement as well, even if they are
not going to be blamed if they don't.
And the third thing, and I'm sure youwill like that, but I truly believe
that is creating the transparency andaccountability within your organization.
Risk management is probably, or supplychain risk management is probably even
(12:27):
more complex than supply chain managementas such, and it can be daunting.
If If you tell people maybe inprocurement, maybe in supply
chain, Hey, you gotta monitorthe risk of your suppliers.
Let's say in my case where do they start?
And they have lots of other thingsto do than monitoring the, let's say
(12:49):
financial solvency of their theirsuppliers and getting data about this.
But if you as an organization can make ithappen that you have Clear and accessible
information at hand, providing truetransparency about your supply chain.
you create also a cultureof accountability and say,
Hey, this is part of the job.
(13:09):
You're not just managing the best casethe happy path, but you also need to
be prepared that things can go wrongand the supplier can go bankrupt.
And a hurricane can hit.
The production side and these kind ofthings and be prepared where, at those
spots where it pays off and where thedata says that you should look for
(13:33):
alternatives before sh*t hits the fan.
Very cool.
So obviously it often needs likea few moments in time to really
drive home the story of such amassive transformational project.
Can you maybe share one of thoseinteresting stories that were really
pivotal for the success of your whole,setup and then also maybe how you then
(13:56):
used it to, and communicated around it?
Yeah.
As often this, there was a centralevent and this central event
was not a positive one, right?
I started in that.
Position with the vision toachieve comprehensive end to end
transparency within our supply chain.
And this was ambition and it was not easyto sell this to the organization, right?
(14:21):
We wanted to identify therisks see the dependencies.
identify where we are singlesourced and where should we better
not be single sourced which finalproducts depend on which, suppliers,
convincing the organizationwas truly challenging.
It was not easy to sell thisand to get the buy in to also
(14:42):
put effort in this transparency.
And then the moment was HurricaneHarvey, a hurricane, which struck
one of the most critical chemicalindustrial areas in the world.
And suddenly this conceptbecame Real right.
And we had to answer the question like,okay, which of our suppliers are actually
(15:05):
located in this area and which materialsdo we get from that and which products
do we make out of those materials and.
Do we have alternative suppliers, whichhopefully do not sit in that region?
And it was super chaotic and laborintense and incredibly stressful to
answer that question because backthen we were not there with the
(15:27):
transparency, we were hoping for.
And this was far away from efficient.
And.
Not only I felt that I inparticular, but also the rest of
the organization realized, okay,this is a mess to do this kind of
crisis management in this panic mode.
This truly helped.
Hurricane season was somethingwhich we faced every year.
(15:50):
Everyone understood, okay, ifthe next hurricane season starts,
we need to be better prepared.
And this allowed me to transform theskepticism into support for our vision.
And again, it was a bit learning itthe hard way in case for, not for me,
because I know that this was a good thingto achieve, but in that case for the
(16:13):
organization, that it can be painful ifyou're not prepared in those situations.
Yes, that's a great story.
I can totally see that because obviouslybig chemical manufacturing complex, right?
It's, it was massive for a lot of people.
But then eventually after running avery successful project and supply
chain risk management, you decidedto move on to and manage another
(16:37):
very strategic program within yourcompany, but it was more focused on
one specific product, which also.
Means it's a more operationallyfocused situation where you don't
really manage the transformation,but really implementing a product.
So what were similarities anddifferences between those two, ways
(16:58):
of operating on a project like that?
So the similarities for sure werethe the buy in from the organization,
at least in the end, right?
Then the buy in was therein both parts and everybody.
At least at some point in the operationalexample from the beginning and the
other, at least after the story I justtold you, there was a buy in from from
(17:19):
various levels of the organization.
I think that was a similaritybetween these both things.
And also like the management attachmentgoes, it goes together with that.
But this is which youon the one hand side.
Need to manage, but on the otherobviously can also leverage.
And I think this held true for theseboth initiatives, the difference,
(17:43):
in a pharmaceutical company,you manage an operational topic.
The sense of purposeis very obvious, right?
Because at the end you want to geta medicine to the patient, right?
the sense of pur, purpose is in theoperational case, much more clear than
if you manage a strategic project, abit away from the actual operations and
(18:08):
from the product, obviously it has thereis a relation, but you, it is much more,
immediate than in the strategic part.
and as the timelines in theoperational part, at least the
one I managed were super tight.
The was, and this is the seconddifference and, possibility
(18:30):
to approach some shortcuts.
if you.
IT project, there is never ever aquick path to overcome some, I don't
know, data privacy checks or something.
you have an operational topics, thereare maybe some possibilities to maneuver
around some standard procedure to expeditethe outcome to Not always look for three
(18:56):
offers, but rather taking the first one.
And even if that's not the most costeffective thing and not applying to the
standard procedure, this is possiblein the operational part, which I
enjoyed very much back then, because itallowed us to expedite our timelines.
And I think the third differenceis how to measure success.
(19:18):
If you are in an operational.
Project, this is often more binary, eitheryou deliver, ready to produce at day one?
Or are we not right?
Do you deliver or not inthe strategic projects?
You often have more shades of gray, right?
You have some milestones,which you accomplish.
(19:40):
And measuring success worksdifferent in this area.
And I think these are three differencesbetween these two, two areas.
Now I want to do a very big pivotactually, and come back to my
very first question once again.
So now we have talked about alot of different experiences
you had over the years in supplychain management and procurement.
(20:01):
And you as a studied magician,mathematician, you are not
magician is something different,but it's still the same, right?
We do magic with supply chains.
Yeah.
So as a studied mathematician, youcome from outside of the field, right?
We see more and more people studyingsupply chain management, but our
generation probably not a lot have.
(20:23):
So what would you tell somebody who'sright now very interested in supply chain
management while not having studied itper se, what to watch out for and how to
quickest learn the art of the possible.
I generally think.
People ending up in supply chain,whether they have studied it or not.
They don't think that way anyway,but what I would tell them anyway,
(20:47):
is it's more about your skills.
Not about your expertise.
And this may hold true for differentareas and for some, it may not.
Example, my brother isan anesthesiologist.
And this is a totally differentarea because he gained his
expertise at university andhopefully he stays up to date.
(21:10):
I'm sure he does, but in thoseareas, this does not hold true
in supply chain management.
I think you, you don't learn at universitywhat you need on the job And also when I
dealt with these many smart people in yourarea, I never heard them arguing something
like, according to the theory I learnedat university, we should do it that way.
(21:33):
This does not happen in that area.
So successful people rather learnfrom their professional experience.
And I think this is what they should alsotake the confidence out that they are.
Smart to come to to copewith that complexity.
And of course it helps if you haveheard about the bullwhip effect
(21:55):
or something like this, right?
But if you have not , people who areinterested in some supply chain will soon
learn what, this means and what this has.
You talked about having like base skills.
I really, from the bottom of myheart would say one of your core
base skills is moving peopleinto the right direction, right?
Helping them to change, gettingthem from one place to the other.
(22:18):
You already talked a littlebit about change management and
how you helped others overcomemaybe one of their hurdles.
But are there other practicalapproaches to change management that
you can still share with us today?
I think I also was a bit lucky to behonest, that the changes I managed
we're always about designing andchanging it if the design was done,
(22:42):
it's only about conveying thatmessage, I think it's way harder.
The experience I made were.
Luckily, mostly about, okay,there's at least some room of
flexibility, how to shape this.
And this gives a big opportunityto get the buy in right.
So to to make people feel heard.
(23:02):
The communication neverthelesssomething at the start.
And from the start point whereI've been in it was longer.
Okay guys, it has to be, so forexample, I recently, had to implement.
A new policy and nobody liked it.
And in that case, the communicationwas, Hey, look, the company is in
(23:24):
a bad cash situation in that case.
So therefore it has to be thatwe do something against it.
And this new policy is what it is.
But there was the chance to getactual genuine involvement, help
me shape this, how we do this.
And then, it is about learning to adaptpartially conflicting perspectives, and
(23:48):
also digest these different perspectives.
And having those in mind when youtalk to people where to other people
and without the presence of theseconflicting perspectives, for example
I was told by the upper management.
Please make it difficult to raisean exception to this policy.
(24:11):
On the other hand, there were goodreasons sometimes to make exceptions.
And the more shop floor level toldme, please don't overload me with
administrative burden and havingthese two conflicting things in mind.
plays a huge role when it comes to,okay, how do we, from the IT perspective,
for example, build this, how can wereduce the administrative burden, but
(24:36):
still implement the right hurdles tonot too easily go with the exception
and taking feedback constructively.
While you're designing itis super important, I think.
And most importantly, give credit inthe end to everybody, in particular to
(24:58):
those who invested energy against itand were Fighting with this change.
Because if then you come to an end,also them have gone through a journey
and they have invested a lot of energy.
And therefore I think giving themcredit in the end is super important.
Even if you perceived it often also asexhausting fighting with those people.
(25:23):
Yeah.
So I actually want to, I want topick up directly where you end it.
So sometimes it's about fighting,and making a match and a car,
a conquest of the other side.
And you actually do that in your sparetime with tennis, where you have these one
on one matches where you go at each other.
So I want to know what has supply chainmanagement and tennis, from a similarity
(25:47):
perspective, yeah, with each other.
Sorry, that was a badphrasing, but it is what it is.
I would say what'sspecial about tennis is.
It is not only about how well you playthe game, but I think more than many
other sports, it's more about, can youadapt to the way your opponent plays?
(26:11):
And can you play the game youwanted to play, even though you
don't get the balls from youropponent that you would love to get.
And this is a huge familiarityI would say with supply chain.
It's not only about how you build it,but also how the reality reacts to
how you would like it to be right.
(26:32):
And I think that's, if you want tobuild that bridge, familiarity, but
it's for sure not why I love this sport.
But it's it's a familiarity.
I would say that doesn't work.
Yeah, I think that works just fine.
In the end, the reality is on thefield and the field will always be
different because your opponent willserve you different and you need to
(26:54):
be right time, right place for sure.
Adapt a little bit, but stilltry to force your game on him.
I think that's a perfect.
Perfect way of looking atsupply chain management as well.
This was a perfect endingto a great podcast.
I want to thank you so much,much Patrik for doing this.
Thanks for having me was an honor.
I'm curious whether people willlisten to this, what I did, what
(27:17):
we discussed and whether they willlike it and let us know if not.
I doesn't
Yes.
Please let us know.
Please let us know if you liked it or not.
I know people will listen to itand I'm very thankful for that.
For everybody who listens orwatches the podcast, I want to,
as always, thank you so much forbeing here, for your attention.
(27:39):
Thanks once again, Patrick.
And with that, we want to say bye bye.
Thanks.
This was Supply Chain Pioneers.
Thanks for watching, listening, orhowever you are enjoying this podcast.
You can find Supply Chain Pioneerson Spotify, Apple Podcasts, all other
(28:01):
major podcast players, as well ason YouTube at Ulftalk Supply Chain.
Please don't forget to like,subscribe, and comment.
See you next time.
Welcome to the supply chainpioneers podcast, where we highlight
industry leaders on the forefrontof innovation and technology in
planning, procurement, and logistics.
Hosted by your supplychain pro to know off then.
Supply Chain Pioneers ispowered by EverStream Analytics.
(00:21):
EverStream predictive insights andanalytics to make your supply chain
faster, smarter, safer, and leaner.
Go to everstream.
ai to book your demo today.
Hello everybody.
And welcome to a new episodeof supply chain pioneers.
And with me today, I have PatrikKalmbach, who is a, strategic leader in
(00:43):
supply chain and procurement excellence.
He's great when it comes totransformational change management
and also supply chain risk management.
And he currently works at oneof the biggest life science
healthcare companies in the world.
And with that, I want to welcome Patrik.
Thanks all for having me.
It's an honor to be here.
Yes, it is an honor for us.
(01:03):
So before we really start gettinginto things and why we talk
today, maybe you want to introduceyourself a little bit really quick.
Patrik Kalmbach I'm 42 years old.
I live in Düsseldorf, I'm married.
I have three kids, and as you saidsince almost 14 years, I've working
for life science company in Germany.
By education.
I'm a mathematician.
And I think that's about me.
(01:24):
As you already hinted at, you're,one of the smart guys studying
mathematics, but also getting a PhD.
So how did you actually end upstarting in supply chain management?
Yeah, that's an interesting question.
To me at least, mathematics,I never considered mathematics
as an end in itself.
To me, it was a nice playground to, applyanalytical thinking and uh, to develop the
(01:48):
ability to deconstruct complex problems.
And this is where Ithink my strengths lie.
And, then when I was, thinkingabout, okay, how can I make an
impact in the real world with this?
I thought supply chain management iswhere quantification meets complexity.
this was the perfect playground for me.
(02:09):
And this is why I lookfor a job in this area.
That's pretty interesting.
So once you started in supplychain management, you went
directly into consultancy, right?
So you consulted on supply chaintopics, which is probably very
complex, especially because youdid a lot in supply chain planning.
(02:30):
Why is this a good start to a topic thatis as complex as supply chain management?
To me, supply chain management isabout two fundamental components.
One is the planning part, whichis the flow of information and the
other is the execution of plans.
And I like this dual structure becauseit has a lot of complexity, what I
(02:54):
like, and you've got to find creativesolution and apply analytical thinking.
And you can measure the outcome, right?
And especially the planningpart, I thought was close
to where I came from, right?
How much do we need of what, where,and when this involves forecasting,
(03:15):
demand planning, inventorymanagement, and also how to build.
A resilient and adaptable supply chain.
And the other part is also superinteresting is the execution, namely the.
Organic organizing thereality basically, right?
Where it's more focused onoperational excellence on real time,
(03:36):
problem solving, actual management.
I find this super, superfascinating, this dual nature.
And at least at the beginning, I thoughtthat the planning part appeal more to my
mathematical and problem solving skills.
as it requires this.
Foresight and the ability to navigatethrough complexities And, uncertainties.
(03:59):
And yeah, I never regret that step.
Quick follow up question on that,is it that you think that people
that work in supply chain planningcan always transfer into an
operational role and then vice versa?
Can people that come from anoperational role always transfer
into supply chain planning becauseit needs different skills in a way?
(04:20):
It does need different skills in a way.
It depends on your on your interest.
I would say, for sure, I would neversay you cannot navigate from one to
the other, because at the end of theday, I think it's nothing which you.
Learned by education, you learn the thingson the job therefore I would believe, it
(04:42):
makes sense to, to to be in both worlds,even if you concentrate on one of them.
If you don't know how to organize thereality, you probably will never be a
good planner and vice versa as well.
So I would actually recommend to atleast make a step into both parts.
but why shouldn't it be possibleto navigate from one to the other?
(05:05):
You then worked a lot on continuousimprovement as part of your consulting
career, and that can be a tedious topic.
When you think back about this andhow you had to convince new groups to
change, which I think you're a masterin change management, what was it you
took away from the whole experiencefor your further professional career?
(05:28):
Yeah.
At the beginning I had to learn the hardway that if you have good arguments and a
good business case this does not yet meanthat it's easy to implement the change.
I had to understand the importance ofdiplomacy, and it's not just about.
opportunities and then making themhappen because yeah, what obviously is
(05:50):
important is that no one feels blamedabout the past inefficiency, right?
And everybody needs to at leastfeel part of the success story
if it hopefully becomes a successstory and, how to do this.
I think what you got to do is providegenuine reasons Why improvements are
(06:11):
impossible now and why they have notbeen possible in the past, be it a
new technology, a new methodology,a shift in market dynamics, or just
management attention, just to say,I'm sure you worked on this before
and you tried your best to becomebetter also the past, but now is the
(06:34):
moment when we can do this together.
Together and your communication withthis, addressing different management
levels, varying degrees of seniority, justindividual personalities, the right tone.
I think this is super importantand I had to learn this.
This is super important.
(06:55):
Maybe I can give you an example.
I, Was part of the development of astrategy to reduce inventory of spare
parts and we had data proving that ourconcept works, that we can actually
reduce spare parts, but put yourselfin the shoes of the warehouse manager.
This person is not just necessarilyinterested in the cost of the inventory
(07:19):
of the warehouse or the working capital.
These guys take pride, of situationswhere they were able to locate a
spare part, which maybe was noteven electronically, logged.
And Reducing inventory can be a threatto them because they cannot get this
sense of achievement anymore if you.
(07:42):
the spare parts having the empathy andto take them on board and make them also
be part of the success story is super keybecause you will never be successful if
you just say, Hey, these are the numbers.
And I'm sure you can livewith two parts, less of this.
this was a profound learningexperience for me in that time.
(08:02):
That sounds very interesting,actually very cool.
And then eventually you really justhave to show them, okay, in the new
scenario, what is your worth then?
So super interesting, but then you startedto work on one of my personal favorite
topics, supply chain risk management,and you really spearheaded what I would
call a massive transformational project,which involved an IT implementation.
(08:27):
You had a lot of organizationalchange management.
You had to build up your own expertiseon a topic that was very, not so
known in the market back then.
So what were for you, thebiggest takeaways from that time?
So you then worked on your,on one of my favorite topics,
supply chain risk management.
You spearheaded a really big, massivetransformational project involving
(08:51):
IT implementation, organizationalchange management, while building
up your own expertise on a topicback then, not really known as much.
So what were your three biggesttakeaways from that time?
What I think is important when it comesto supply chain risk management is first
of all to define what is risk management.
And I often see people mixing up riskmanagement from operational management.
(09:17):
To me, risk management, first of all,is the anticipation and mitigation of
things which are unlikely to happen,but carry significant impact, where
as Operational volatility, let's sayis more about things which frequently
happen, but which hopefully thendo not have a significant impact.
(09:39):
Because if you have frequent thingshappening with a significant impact,
your business will be gone soon.andI think it's super important to
differentiate between these two becausewhy actually If you want to mitigate
things or let's put it differently.
If you think you can buildyour supply chain like this.
(10:00):
But you will continously have issues.
Then you rather build it like that.
This is more because of thingsthat you can frequently measure.
whereas with risk management, youcan build your supply chain like
this and you will be fine most of thetime, but once in a while, the bad
thing happened and you should have.
(10:20):
Build it like that.
And this is a huge difference also inconvincing people to invest maybe in
a more resilient supply chain, becausemost of the time you will be fine with
a less resilient supply chain, right?
And this is, I think the numberone distinction make clear this
distinction between risk management andoperational management, let's call it.
(10:42):
The second thing.
Is the commitment of the leadershipand not necessarily the commitment
to risk management, that you haveleaders who generally care about the
longterm wellbeing of the company.
(11:03):
You work with a founder.
They obviously have that.
But if you have an employed manager, theyoften have more short term goals and will
prioritize other things more than thingswhich are not that likely to happen.
I work with leaders telling me,Hey, Patrick you're telling me
(11:23):
something, but this is a black swan.
These things never happen.
And are right on the one hand side,but if you generally care about the
things which rarely happen, but whichhave a huge impact on your company.
Then you protect your company against it.
where as if you are an employed managerand maybe have more short term goals
(11:45):
and will be monitored for your costsand sales, et cetera, even if this bad
things happen, they probably have a goodexcuse saying, Hey, this was unforeseeable
and nobody could see this happening.
So we weren't prepared.
and this is the big importance.
I think if you have people who generallycare about the wellbeing of the company,
(12:07):
they do this investments in riskmanagement as well, even if they are
not going to be blamed if they don't.
And the third thing, and I'm sure youwill like that, but I truly believe
that is creating the transparency andaccountability within your organization.
Risk management is probably, or supplychain risk management is probably even
(12:27):
more complex than supply chain managementas such, and it can be daunting.
If If you tell people maybe inprocurement, maybe in supply
chain, Hey, you gotta monitorthe risk of your suppliers.
Let's say in my case where do they start?
And they have lots of other thingsto do than monitoring the, let's say
(12:49):
financial solvency of their theirsuppliers and getting data about this.
But if you as an organization can make ithappen that you have Clear and accessible
information at hand, providing truetransparency about your supply chain.
you create also a cultureof accountability and say,
Hey, this is part of the job.
(13:09):
You're not just managing the best casethe happy path, but you also need to
be prepared that things can go wrongand the supplier can go bankrupt.
And a hurricane can hit.
The production side and these kind ofthings and be prepared where, at those
spots where it pays off and where thedata says that you should look for
(13:33):
alternatives before sh*t hits the fan.
Very cool.
So obviously it often needs likea few moments in time to really
drive home the story of such amassive transformational project.
Can you maybe share one of thoseinteresting stories that were really
pivotal for the success of your whole,setup and then also maybe how you then
(13:56):
used it to, and communicated around it?
Yeah.
As often this, there was a centralevent and this central event
was not a positive one, right?
I started in that.
Position with the vision toachieve comprehensive end to end
transparency within our supply chain.
And this was ambition and it was not easyto sell this to the organization, right?
(14:21):
We wanted to identify therisks see the dependencies.
identify where we are singlesourced and where should we better
not be single sourced which finalproducts depend on which, suppliers,
convincing the organizationwas truly challenging.
It was not easy to sell thisand to get the buy in to also
(14:42):
put effort in this transparency.
And then the moment was HurricaneHarvey, a hurricane, which struck
one of the most critical chemicalindustrial areas in the world.
And suddenly this conceptbecame Real right.
And we had to answer the question like,okay, which of our suppliers are actually
(15:05):
located in this area and which materialsdo we get from that and which products
do we make out of those materials and.
Do we have alternative suppliers, whichhopefully do not sit in that region?
And it was super chaotic and laborintense and incredibly stressful to
answer that question because backthen we were not there with the
(15:27):
transparency, we were hoping for.
And this was far away from efficient.
And.
Not only I felt that I inparticular, but also the rest of
the organization realized, okay,this is a mess to do this kind of
crisis management in this panic mode.
This truly helped.
Hurricane season was somethingwhich we faced every year.
(15:50):
Everyone understood, okay, ifthe next hurricane season starts,
we need to be better prepared.
And this allowed me to transform theskepticism into support for our vision.
And again, it was a bit learning itthe hard way in case for, not for me,
because I know that this was a good thingto achieve, but in that case for the
(16:13):
organization, that it can be painful ifyou're not prepared in those situations.
Yes, that's a great story.
I can totally see that because obviouslybig chemical manufacturing complex, right?
It's, it was massive for a lot of people.
But then eventually after running avery successful project and supply
chain risk management, you decidedto move on to and manage another
(16:37):
very strategic program within yourcompany, but it was more focused on
one specific product, which also.
Means it's a more operationallyfocused situation where you don't
really manage the transformation,but really implementing a product.
So what were similarities anddifferences between those two, ways
(16:58):
of operating on a project like that?
So the similarities for sure werethe the buy in from the organization,
at least in the end, right?
Then the buy in was therein both parts and everybody.
At least at some point in the operationalexample from the beginning and the
other, at least after the story I justtold you, there was a buy in from from
(17:19):
various levels of the organization.
I think that was a similaritybetween these both things.
And also like the management attachmentgoes, it goes together with that.
But this is which youon the one hand side.
Need to manage, but on the otherobviously can also leverage.
And I think this held true for theseboth initiatives, the difference,
(17:43):
in a pharmaceutical company,you manage an operational topic.
The sense of purposeis very obvious, right?
Because at the end you want to geta medicine to the patient, right?
the sense of pur, purpose is in theoperational case, much more clear than
if you manage a strategic project, abit away from the actual operations and
(18:08):
from the product, obviously it has thereis a relation, but you, it is much more,
immediate than in the strategic part.
and as the timelines in theoperational part, at least the
one I managed were super tight.
The was, and this is the seconddifference and, possibility
(18:30):
to approach some shortcuts.
if you.
IT project, there is never ever aquick path to overcome some, I don't
know, data privacy checks or something.
you have an operational topics, thereare maybe some possibilities to maneuver
around some standard procedure to expeditethe outcome to Not always look for three
(18:56):
offers, but rather taking the first one.
And even if that's not the most costeffective thing and not applying to the
standard procedure, this is possiblein the operational part, which I
enjoyed very much back then, because itallowed us to expedite our timelines.
And I think the third differenceis how to measure success.
(19:18):
If you are in an operational.
Project, this is often more binary, eitheryou deliver, ready to produce at day one?
Or are we not right?
Do you deliver or not inthe strategic projects?
You often have more shades of gray, right?
You have some milestones,which you accomplish.
(19:40):
And measuring success worksdifferent in this area.
And I think these are three differencesbetween these two, two areas.
Now I want to do a very big pivotactually, and come back to my
very first question once again.
So now we have talked about alot of different experiences
you had over the years in supplychain management and procurement.
(20:01):
And you as a studied magician,mathematician, you are not
magician is something different,but it's still the same, right?
We do magic with supply chains.
Yeah.
So as a studied mathematician, youcome from outside of the field, right?
We see more and more people studyingsupply chain management, but our
generation probably not a lot have.
(20:23):
So what would you tell somebody who'sright now very interested in supply chain
management while not having studied itper se, what to watch out for and how to
quickest learn the art of the possible.
I generally think.
People ending up in supply chain,whether they have studied it or not.
They don't think that way anyway,but what I would tell them anyway,
(20:47):
is it's more about your skills.
Not about your expertise.
And this may hold true for differentareas and for some, it may not.
Example, my brother isan anesthesiologist.
And this is a totally differentarea because he gained his
expertise at university andhopefully he stays up to date.
(21:10):
I'm sure he does, but in thoseareas, this does not hold true
in supply chain management.
I think you, you don't learn at universitywhat you need on the job And also when I
dealt with these many smart people in yourarea, I never heard them arguing something
like, according to the theory I learnedat university, we should do it that way.
(21:33):
This does not happen in that area.
So successful people rather learnfrom their professional experience.
And I think this is what they should alsotake the confidence out that they are.
Smart to come to to copewith that complexity.
And of course it helps if you haveheard about the bullwhip effect
(21:55):
or something like this, right?
But if you have not , people who areinterested in some supply chain will soon
learn what, this means and what this has.
You talked about having like base skills.
I really, from the bottom of myheart would say one of your core
base skills is moving peopleinto the right direction, right?
Helping them to change, gettingthem from one place to the other.
(22:18):
You already talked a littlebit about change management and
how you helped others overcomemaybe one of their hurdles.
But are there other practicalapproaches to change management that
you can still share with us today?
I think I also was a bit lucky to behonest, that the changes I managed
we're always about designing andchanging it if the design was done,
(22:42):
it's only about conveying thatmessage, I think it's way harder.
The experience I made were.
Luckily, mostly about, okay,there's at least some room of
flexibility, how to shape this.
And this gives a big opportunityto get the buy in right.
So to to make people feel heard.
(23:02):
The communication neverthelesssomething at the start.
And from the start point whereI've been in it was longer.
Okay guys, it has to be, so forexample, I recently, had to implement.
A new policy and nobody liked it.
And in that case, the communicationwas, Hey, look, the company is in
(23:24):
a bad cash situation in that case.
So therefore it has to be thatwe do something against it.
And this new policy is what it is.
But there was the chance to getactual genuine involvement, help
me shape this, how we do this.
And then, it is about learning to adaptpartially conflicting perspectives, and
(23:48):
also digest these different perspectives.
And having those in mind when youtalk to people where to other people
and without the presence of theseconflicting perspectives, for example
I was told by the upper management.
Please make it difficult to raisean exception to this policy.
(24:11):
On the other hand, there were goodreasons sometimes to make exceptions.
And the more shop floor level toldme, please don't overload me with
administrative burden and havingthese two conflicting things in mind.
plays a huge role when it comes to,okay, how do we, from the IT perspective,
for example, build this, how can wereduce the administrative burden, but
(24:36):
still implement the right hurdles tonot too easily go with the exception
and taking feedback constructively.
While you're designing itis super important, I think.
And most importantly, give credit inthe end to everybody, in particular to
(24:58):
those who invested energy against itand were Fighting with this change.
Because if then you come to an end,also them have gone through a journey
and they have invested a lot of energy.
And therefore I think giving themcredit in the end is super important.
Even if you perceived it often also asexhausting fighting with those people.
(25:23):
Yeah.
So I actually want to, I want topick up directly where you end it.
So sometimes it's about fighting,and making a match and a car,
a conquest of the other side.
And you actually do that in your sparetime with tennis, where you have these one
on one matches where you go at each other.
So I want to know what has supply chainmanagement and tennis, from a similarity
(25:47):
perspective, yeah, with each other.
Sorry, that was a badphrasing, but it is what it is.
I would say what'sspecial about tennis is.
It is not only about how well you playthe game, but I think more than many
other sports, it's more about, can youadapt to the way your opponent plays?
(26:11):
And can you play the game youwanted to play, even though you
don't get the balls from youropponent that you would love to get.
And this is a huge familiarityI would say with supply chain.
It's not only about how you build it,but also how the reality reacts to
how you would like it to be right.
(26:32):
And I think that's, if you want tobuild that bridge, familiarity, but
it's for sure not why I love this sport.
But it's it's a familiarity.
I would say that doesn't work.
Yeah, I think that works just fine.
In the end, the reality is on thefield and the field will always be
different because your opponent willserve you different and you need to
(26:54):
be right time, right place for sure.
Adapt a little bit, but stilltry to force your game on him.
I think that's a perfect.
Perfect way of looking atsupply chain management as well.
This was a perfect endingto a great podcast.
I want to thank you so much,much Patrik for doing this.
Thanks for having me was an honor.
I'm curious whether people willlisten to this, what I did, what
(27:17):
we discussed and whether they willlike it and let us know if not.
I doesn't
Yes.
Please let us know.
Please let us know if you liked it or not.
I know people will listen to itand I'm very thankful for that.
For everybody who listens orwatches the podcast, I want to,
as always, thank you so much forbeing here, for your attention.
(27:39):
Thanks once again, Patrick.
And with that, we want to say bye bye.
Thanks.
This was Supply Chain Pioneers.
Thanks for watching, listening, orhowever you are enjoying this podcast.
You can find Supply Chain Pioneerson Spotify, Apple Podcasts, all other
(28:01):
major podcast players, as well ason YouTube at Ulftalk Supply Chain.
Please don't forget to like,subscribe, and comment.
See you next time.
Popular Podcasts
Stuff You Should Know
If you've ever wanted to know about champagne, satanism, the Stonewall Uprising, chaos theory, LSD, El Nino, true crime and Rosa Parks, then look no further. Josh and Chuck have you covered.
Dateline NBC
Current and classic episodes, featuring compelling true-crime mysteries, powerful documentaries and in-depth investigations. Follow now to get the latest episodes of Dateline NBC completely free, or subscribe to Dateline Premium for ad-free listening and exclusive bonus content: DatelinePremium.com
The Breakfast Club
The World's Most Dangerous Morning Show, The Breakfast Club, With DJ Envy, Jess Hilarious, And Charlamagne Tha God!