Narrator [00:00:04]:

Welcome to Supply Chain Now. The voice of global supply chain. Supply Chain Now focuses on the best in the business for our worldwide audience, the people, the technologies, the best practices, and today's critical issues, the challenges and opportunities. Stay tuned to hear from those making global business happen right here on Supply Chain Now.

Scott W. Luton [00:00:32]:

Hey, hey. Good morning, good afternoon, good evening, wherever you may be. Scott Luton here with you, along with our special guest Laura Rainier with you right here on Supply Chain Now. Welcome to today's show. Laura, how are you doing?

Laura Rainier [00:00:45]:

Thank you, Scott. Doing very well. How are you?

Scott W. Luton [00:00:48]:

Wonderful. Great to have you here. Can't wait to get into the conversation. We got teed up, folks, back by popular demand. Y'all know what series this is one of our longest running, most popular series, Supply Chain today and tomorrow with Mike Griswold, with Gartner. But Mike can't join Laura and I today, but he'll be back next month. So his agent tells us we've got an outstanding episode teed up because, Laura, you know, he's a rock and roll star. So they all have agents is what I've heard.

Scott W. Luton [00:01:14]:

But we got a great episode here today. Laura Raniere serves as Senior Director Analyst with Gartner. And on today's episode, we're going to be discussing an interesting recent research report focused on how supply chain organizations can thrive in a resource constrained world. Laura, we're going to be identifying key resources and constraints, discussing several barriers that have been shown to keep supply chain leaders from taking decisive action. And folks are going to be offering up several examples of high performing supply chain organizations that have found ways to succeed and move forward. Laura, should be a great conversation, huh?

Laura Rainier [00:01:51]:

Absolutely. Looking forward to it.

Scott W. Luton [00:01:53]:

We are, too. So, folks, stay tuned for a wonderful, actionable, intriguing conversation here today on Supply Chain Now. So, Laura, let's get to know you a little better. So welcome to the program. Now, as we mentioned, you serve as Senior Director Analyst with Gartner's Supply chain Group. Now there you leverage 20 years of experience across supply chain sustainability, human rights and ESG strategy work into a variety of research and analysis work. Is that right?

Laura Rainier [00:02:23]:

Absolutely. And a lot of that time has been focused in supply chain, supply chain sustainability, engaging suppliers and, yeah, really, really enjoy the research.

Scott W. Luton [00:02:33]:

Well, and global supply chain needs more leadership across all of those areas. I know you've served in a variety of steering committees and done some other really important work as we look to make progress for everybody across global supply chain. Now on a more on a fun note, I guess you're an adjunct professor within the MBA in Sustainability program at Bard College, which is based up in New York state. We've been doing a program here called the now generation for a long time where we interview current students, and it's amazing. I'm not sure if. If time maybe warps my brain and view, but it's amazing just how smart, bright, and impactful current students and generations are already having in global business and life, you name it. So I want to ask you, Laura, as you have led those classes and interacted with those students, members of the now generation, what's a life or a business or maybe a leadership lesson that you've gleaned from those interactions here recently?

Laura Rainier [00:03:31]:

Yeah, I've learned so much. I think I, first of all, just learned so much from the students, probably more than I'd expected in terms of content and what they're reading and learning about in the space of supply chain sustainability. I do teach a sustainable supply web class, but I think what's interesting, probably the biggest takeaway, is being a teacher is a different game, right? And I think that shift, you know, the leadership lesson that I learned was really just kind of how to make space and that you don't always have all the answers, but that having the conversation can help others find their own answers. And I think that that is really important as a leader as well. Right? As a manager, not always necessarily telling others what to do, but providing them the right questions to ask and the right kind of framing to think about those questions.

Scott W. Luton [00:04:21]:

Laura, I love that perspective. I think authenticity and transparency is so important when it comes to business and leadership and being able to be able to admit, hey, that's a great question, and I don't have an answer for you, and then help to encourage together, we go out and find those answers, and then we're all better off. I can imagine. I bet you're having a ton of fun doing it as well, huh? Teaching at Bard College?

Laura Rainier [00:04:48]:

Absolutely. I mean, now I did my own MBA back at Columbia business school, and that was as a student, definitely kind of a different experience, right? A really great time, a lot of great connections. As a adjunct professor, it's absolutely a great opportunity to connect, to get to really know the students better. Um, somehow I feel more the same age, but, um, they don't agree, I think. So, you know, it's funny, like, how in your mind, you're still 25. But anyway, it's, um. It's been a great experience and a whole lot of fun to. To get to know them.

Scott W. Luton [00:05:20]:

I bet. Laura, in my mind, I used to always consider myself to be 25. Now it's more like, uh, 40. And I'm. I can't quite cut it there either. But regardless, appreciate you sharing. And of course, Bard College. To have a true sustainability expert like yourself that's done so many things across global business there.

Scott W. Luton [00:05:39]:

What a great get for their program. So I'd love to interview the students, maybe down the road a bit. Okay. We've got a lot to get into here today. And large, as we had mentioned on the front end, today's conversations really focused on a research report from recent months entitled Supply Chain executive report, thrive in a resource constrained world. Now, as we always do, we do homework on all of our guests. And I came across this great line you had in a recent blog, or maybe social sharing, the recent blog, and you said, quote, the concept of resource constraints is a bit like Pickleball in 2024. Once you become aware of the phenomenon, you begin to see it everywhere, end quote.

Scott W. Luton [00:06:21]:

And that is so true. Pickleball is taking over the world. I wish I had majored in pickleball in college. And, you know, we may be doing this somewhere. It helps. But let's establish, first off, do you play pickleball?

Laura Rainier [00:06:34]:

Not well. I've tried occasionally. I haven't got as deep into it as. I mean, I think it's a lot of fun and I respect most to do it. So I see why it's fun, why it's taking off.

Scott W. Luton [00:06:45]:

The infrastructure being built to support this growing global sport is something else. But anyway, getting to the topic at hand, I want to establish a little bit of background in context for our audience as we dive in deeper on this research piece. What are the key resources and constraints that you and your team identified in this research here?

Laura Rainier [00:07:06]:

Yeah, you know, I think we, we refer really broadly to resource constraints. And so when we refer to resource constraints, we're referring to kind of a broad set of inputs that are required to operate our supply chain. And so this could be anything from raw material inputs I to minerals or agricultural inputs, but also things like labor energy, ocean shipping capacity. And I think what we're seeing, and the reason we wrote this report is that supply chains have always faced constraints. That's just, I think, a feature of being a leader in the supply chain. But now we're seeing this convergence of geopolitical disruption and the impacts of climate change, and these two drivers are contributing to a really constrained environment for supply chain. So I'll give an example of a sort of tangible raw material input resource constraint in cotton. Right? And so, in 2022, Texas farmers lost 74% of their upland cotton crop due to heat and drought.

Laura Rainier [00:08:05]:

Meanwhile, same year, Pakistan lost 50% of their cotton crop due to flooding. And just December 2021, us legislation banned imports of cotton from the Xinjiang region in northwest China due to severe human rights concerns. So this was all kind of this convergence, like I said, of sort of these climate change impacts and then these geopolitical and trade impacts created a really difficult situation for any company relying on cotton, right? So retailers, for example, that were relying on cotton, found their operating margin were significantly impacted, in large part because of this rising input cost. And so one of the things we're starting to kind of really focus on as, as part of this report is that this is impacting growth. Right? Constrained resources do constrain growth. And I shared this example of cotton. I've got similar examples, just like pickleball, you see it everywhere. And so starting to see similar, such examples.

Laura Rainier [00:09:02]:

Of course, the semiconductor crisis comes to mind. Shipping in the Red Sea is another example. So a whole lot of challenges, I think, that are we are framing up as this sort of resource constraint issue.

Scott W. Luton [00:09:16]:

Laura, I love that. And I'll tell you, one of the things you kind of call out in the report that I really thought was valuable is despite all the gains we've made in what I'll call not just visibility, but predictive visibility. Right. Kind of seeing around corners. We're still working on those muscles, but we got a long way to go because as y'all point out, when it comes to geopolitical challenges, you all surveyed supply chain leaders in 2023. I think it was a future supply chain survey. Only 28% of those surveyed said that raw material availability due to geopolitical challenges would be a key challenge in the next one to three years. And, of course, that's really come to fruition in many ways.

Scott W. Luton [00:09:57]:

Your quick comment there, Laura, before I move forward.

Laura Rainier [00:10:00]:

Yeah, you know, we see that supply chain leaders do recognize this challenge. So some of the data that we have said or points to this recognition that this is an issue, right? And so, for example, 66% of supply chains that have invested in mitigating raw material supply chain risks. Right. Or raw material supply risks, rather. And so I think there's some work happening here, there's some investment, but to your point, it's not necessarily sufficient. Right. We're not going far enough. We're not managing this proactively enough, and we're likely not investing enough.

Laura Rainier [00:10:31]:

And that's because we're seeing that supply chain leaders you know, it's a challenge, but they've got a whole lot of different challenges that they're managing. And so as a result, you know, only 28% are saying, hey, raw materials availability is a key challenge and something we're going to focus on in the next one to three years.

Scott W. Luton [00:10:48]:

I'd love to sit down at 28% and get their other maybe predictions for 2030 or something. But as to your point, it's a great segue. There's lots of dynamics that are not only preventing that visibility, but equally as important, not more important, preventing action. And that's where I want to go next. But before I do, I want to share two folks that listen, tune in. Watch. You know, we love our acronyms across global supply chain, and there's a couple here that you may hear us refer to throughout the rest of the conversation. One is Vuca, which many of our audience members know we've used plenty of times.

Scott W. Luton [00:11:25]:

Volatility, complexity, uncertainty, and ambiguity. Right, Vuca. And then secondly, Banny, which, which Laura, my nickname for my oldest daughter is Banny Jones, and I can't see that acronym without see it, you know, hearing her name between my ears. But in this case, Banny refers to brittle, anxious, nonlinear, and incomprehensible. Right. So you might hear us use those acronyms, but back to these, these headwinds or these barriers that keep supply chain leaders from taking action. Research speaks to this a good bit. Walk us through those three key barriers, Laura.

Scott W. Luton [00:12:02]:

Laura?

Laura Rainier [00:12:02]:

Sure. Yeah. I think we started to touch on the first, right. And the first is really just, we have a lot of challenges as supply chain leaders. Right. And so how do we overcome those challenges, or rather prioritize this challenge of resource constraint when we're dealing with so many other areas of focus that need our attention? So that motivation challenge is the first. The second is around managing symptoms, perhaps rather than managing the root cause issue. And so I'll share a little bit about that.

Laura Rainier [00:12:36]:

We see that organizations often view this solution as a sourcing solution, but really we need to go further back and focus on design. And then the last is around, how do we actually change within the organization? How do we change is hard, right. We all know that. But I think in this case, it's often, like the technical case for change meets a whole lot of internal scrutiny and what we call drag. And so those are kind of the three key barriers. I'll kind of dig into each, maybe one at a time. So the first around motivating, right. I think we recognize motivating is a key challenge.

Laura Rainier [00:13:11]:

Right. Motivating the organization to focus on resource constraints. And so we provide some advice here, right. We find that because supply chain leaders have many urgent priorities and we need to get their attention, we actually need to focus on those priorities and focus on what we call current constraints to secure investment. And so the key here, I think, is best sort of displayed through an example. We have a case study in our research from a Pakistan based electrical utility, K Electric. And so k Electric was dealing with some supply disruption due to the global printed circuit board shortage and exacerbated by it had local challenges around currency fluctuations and surging demand. So they're struggling to meet their demand due to a lack of input.

Laura Rainier [00:13:59]:

So that is a urgent challenge. Right. And that is an urgent challenge that they use to motivate action. But what ultimately they did was they were able to develop a meter refurbishment process. So in close partnership with some of their key vendors, they kind of developed a circular closed loop approach where they were recapturing 25% of their scrap meters for refurbishment and recycling. And so this, as I mentioned, was inspired by their real urgent constraints, by those immediate constraints. But then they kind of took this strategic response and designed a solution that ultimately reduced costs, enabled them to reuse some of those parts. Right? So reduced greenhouse gas emissions because they're buying fewer inputs and reduced exposure to supply chucks in the future.

Laura Rainier [00:14:42]:

So K Electric is really focused on kind of scaling this up down the line and driving some progress. So that's sort of the motivate piece, right? How do we kind of motivate leaders by focusing on those most urgent issues to kind of unlock design solutions that we can address, that we can use to address a long term solution.

Scott W. Luton [00:15:00]:

Laura, quick comment before we move on to the second one and shed a little more perspective, is I'm always reminded when I hear kind of the anecdote you shared is the tyranny of the urgent. And I think that's been a book title for lots of publications. In fact, I heard it come up at a Gartner roundtable at the last supply chain symposium I was part of. And I think it's so important. And the example you shared really reflected at K Electric, where leadership didn't just answer the call of meeting that urgent constraint, but they were able to kind of pull themselves away from working in the business, to work on the business and address it strategically. And I think it's so important for not just the potential leaders, but all business leaders to find ways of doing that, because we all have. We all have urgent constraints or urgent demands to business. But if we just firefight day in and day out and wear that cape, I mean, does or is the organization really served by that? Our customers are, but we can do far more, I think, by thinking, as you mentioned, strategically, your quick comment there before you move to the second.

Laura Rainier [00:16:04]:

Yeah, I mean, absolutely agree. I would say maybe it's, you know, we often say, just don't waste a good crisis. Right. So these urgent challenges are also likely opportunities to think a little bit differently and kind of address that, you know, the root cause, as we talked about.

Scott W. Luton [00:16:20]:

Yeah, well said. All right. The second one, I think, is you were talking about kind of the prefacing example is it's not just always a sourcing issue. It could be a design issue. We gotta go deeper. Your thoughts on number two, Laura.

Laura Rainier [00:16:35]:

Yeah, so we did a lot of interview based research for this report, and I think one of the things that we found really interesting was a lot of organizations have this tendency to say, I mean, we're talking to supply chain leaders, right? And so they're going to find the supply chain solution. The challenge is that often by just focusing on that supply chain solution, we're not sufficiently addressing what is causing that issue. Right. And so what we're starting to see is that organizations that take that design approach can really address that root cause. Now, supply chain is not designed. Right. So how does supply chain do this? Supply chain is increasingly engaging very deeply with design. And when I say design, I mean broadly, any design related function.

Laura Rainier [00:17:18]:

Right. So it might be engineering or R and D, but really kind of engaging deeply with our supply and our design function is going to help us kind of address some of these, these challenges and opportunities. And so one of the things that we've seen in our research around our supply chain top 25 in the past year, this was in our 2023 supply chain top 25. We found that 51% of supply chains own and execute the new product introduction process. So really starting to get really more deeply involved in that new product introduction and engaging more deeply with designers kind of that process and more broadly. So, yeah, I think, I think that kind of focus on how do we design out resource constraints rather than managing symptoms and trying to source our way out of the challenge. That is actually the sort of supply chain leader's role, I think, or the most critical part of the supply chain leaders role.

Scott W. Luton [00:18:13]:

Laura, I love that example. And there's so many. We could spend a seven hour show, I think, on this one example, one thing comes to mind is the dangers of the silo mentality, right. Because we got to really bring supply chain together with the engineers and many others that play a part in, especially as an example product design. Right. And then secondly, when it comes to designing specifically our supply chains that can't be a once a year review. It needs to be more dynamic. And I think the last few years have really taught us that in a very painful but hopefully lasting way.

Scott W. Luton [00:18:49]:

Right. As we've taken more action before you move on to this next barrier. I love your examples. You're bacon in here too. So we're big Costco fans here, that Luton household. All of our audience knows that and they recently came out with, and this is going to be a perfect example but they redesigned a bit the famous rotisserie chicken. Right. At Costco.

Scott W. Luton [00:19:09]:

Right. One of the most popular items. They've recently changed the packaging, right. And the design of what you get when you pick one up store from a hard shell to a softer like bag. And in doing so they eliminated 17 million pounds of plastic and a thousand trucks off the road every year because there's less pallets required for those bags versus the plastic shells. And taking those trucks off the road have led to what they're reporting 4000 metric tons that they're eliminating of CO2 annually. And I bet that was done my hunch by not trying to find or source a better plastic shell. But it was about rethinking what exactly is a consumer needed when they pick up a rotisserie chicken to take it home.

Scott W. Luton [00:19:57]:

We don't need a plastic shell that will last for 3000 years. Right, exactly. So I love examples like that. Your quick comment before we move on to our third barrier.

Laura Rainier [00:20:07]:

Again.

Scott W. Luton [00:20:07]:

A little more color commentary there.

Laura Rainier [00:20:09]:

Yeah, I mean I think that focus on design is key. Right. And when we ask the question what is ultimately the use? Right. What are we looking for out of the product or its packaging as opposed to how do we do the thing we've been doing better. Right. And that's easier said than done, arguably. But it is really where we need to go. Right.

Laura Rainier [00:20:30]:

Starting to think about what is the utility of the packaging of the. How do we rethink how we engage with this product?

Scott W. Luton [00:20:36]:

Because as humans, all of us cling. It's just like wired in our DNA to cling to how we've always done things. Right. And those leaders, those professionals that can really call time out and say okay, how do we define success? And then working backwards from there. All right, so anyway, Laura, good stuff. What's this third barrier?

Laura Rainier [00:20:58]:

Yeah, so the third barrier is internal. And the third barrier is what we call drag. Right. So we've got this great solution. We've designed out future resource constraints, but change is difficult. And often from a technical perspective, change is particularly difficult. Right. So as Costco designed that new packaging, there was likely internal leaders who were saying, hold on, is it going to have that same functionality that we have today? Right.

Laura Rainier [00:21:27]:

Are there issues that are coming up that are, we don't know because we haven't tried it, so we don't know that this is going to work. Right. And so you're going to deal with those internal challenges. And so how do we address those? And we have, I think, some interesting advice here, which is around how do we kind of engage the marketplace, engage others within our ecosystem to overcome some of these internal barriers. Right. And so we feature an auto company, for example, that built an innovation marketplace. So they've got access to all these different kind of small organizations and large organizations that are focused on building solutions so that they can kind of, you know, when they run into a problem or a question, they can engage that solution provider to help them overcome that problem. And of course, it's a win win.

Laura Rainier [00:22:10]:

Right, for them as well as for their new partner as they bring that solution to scale. So kind of defining and determining how do we engage partners to bring that expertise into our organization if we don't have it, or often to support us to prove the case so that we can kind of overcome some of that internal drag? The other thing we talk about is just pilot to scale. Right. Which we could certainly dig into as well. Right. How do we actually make sure that when we are piloting, when we are focused on these new solutions, we're able to then take them and really scale them so we don't kind of run into this perpetual pilot challenge that many organizations suffer from.

Scott W. Luton [00:22:48]:

That's right. Very prevalent. As you're sharing your thoughts on that second and third barrier, one of the things came to my mind because, you know, as I've read in this caught back to Costco example, you know, some customers haven't been through with the change. Right? Many have. But it kind of reminds me of, you know, I'm not sure if Henry Ford ever said this or not, but it's a great example. You know, someone reportedly asked Henry Ford, why design a Model T? Well, you know, if we asked the customers, they would just want a faster horse. Right. But, and we all know how all that, you know, how the automotive industry was born.

Scott W. Luton [00:23:26]:

And I think having, you know, really being put your finger on the pulse of, of what your customers need, not just what they say, but what they really need. How they're using the products is so important. And a lot of times that will offer breakthrough industry moments that will create pioneering changes in how we do global supply chain. There's plenty of other barriers that, that prevent us truly optimizing our supply chain performance and making more gains with the, what we like to refer to as the sustainability imperative. Right. That's only going to be growing. So when you think of, and I love the examples you worked in each of those three barriers. Let's get into some more examples, though, because you identify in the report, in the research, some other organizations we haven't mentioned yet that really have been able to navigate this resource constrained environment.

Scott W. Luton [00:24:19]:

And what I think is some innovative ways. Where do you want to start, Laura?

Laura Rainier [00:24:23]:

You know, actually, based on, based on that point, right around Henry Ford. I love that quote. I think it's a great one. I think I'll actually give an example that we feature in the case from Microsoft to start off with, and that is around packaging. And so they really focused on how do we shift from our current disposable packaging to a more reusable packaging model. And in doing this, they focused on design. Right. They looked at how do we redesign our packaging to be reusable and redesign our supply chain to enable that work.

Laura Rainier [00:24:57]:

But in doing so, they identified co benefits. Right. So kind of to your point on, you know, people might ask for a reusable packaging to look just as it does today, but what if instead we say, hey, we can put fewer screws on this packaging so that it can actually go through the distribution center more quickly, or we can design packaging that is actually more resilient or enables the servers inside to be more resilient. So if we can look at some of these design solutions as actually also delivering important benefits for quality, for other important factors, that's where you're, I think, going to really run into some, you know, start to come overcome that internal drag.

Scott W. Luton [00:25:38]:

Yeah, I love that, Laura. And it reminds me, um, you and I have been talking a lot in the last, uh, couple of segments about listening to the customer, the consumer, and getting great innovation ideas there. But, you know, another company I think you're going to bring up and use as an example is Schneider Electric, which, of course, leaning on their customers and driving innovation. One of the things I love that this company is doing is really leaning into their supply base and working with their suppliers to find innovative improvements that help the whole ecosystem and that is a massive opportunity for more companies out there. What are you seeing at Schneider Electric? Laura?

Laura Rainier [00:26:16]:

Yeah, I think Schneider lecture has taken a really interesting approach, and I think they're a great case example of how we can kind of apply some of the good practices that we've outlined in our report. I think to start with, they really get ahead of this kind of overall resource constraint issue by focusing on determining what are the key resource constraints that we are likely to expect in the future. They conduct a critical resource assessment, so they look at business impact and likelihood of scarcity of raw materials and ultimately will determine where are the things that we might see as a risk in the future. So this is kind of part of the regular risk assessment process. The next thing they do that's really interesting and addresses one of these key barriers is they, as part of their strategic planning process. So rather than saying, you know, will we need to transform in, you know, our future strategy, they say what transformation will be required? And so that mindset shift is simple, but it makes a big difference in terms of how they, they're kind of coming in ready for that transformation. And then I think what's particularly interesting and what we feature in our research is around the approach they took around a particular switchgear that presented a risk. And so they found that in their critical resource assessment, they found that there was a risk of SF six, a particular potent greenhouse gas, being legislated in the EU, where they do obviously a good amount of business.

Laura Rainier [00:27:41]:

And so they found that, okay, this represents a risk. Our switch gears that use FFX are subject to regulation. And so rather than, say, lobbying to try to get some special consideration, they said, let's engage our ecosystem and let's engage our designers to determine and define a better solution that can help them to design out this SF six gas in the first place. And they did that. They ultimately developed this better product that wasn't emitting SF six gas. And as a result, they've now developed this sort of new standard within the EU that is leading practice. It will be legislated in the next couple of years, and it's sort of like taking this challenge and making it into a really important business opportunity for them. So, love that when we can look at resource constraints kind of proactively, we can actually really identify opportunities.

Scott W. Luton [00:28:38]:

Yes, and by that question you asked that they're asking themselves at Schneider Electric what transformation will be required. That that alone reflects a mindset that's more open to change, which is important. Right? Not to state the obvious, but folks as all of you all know out there, because we have the smartest audience in all supply chain media. If you don't like the current regulatory environment, you're really going to hate what's coming next because the regulation will continue to get tougher and tougher. And if to your point, Laura, if we're not only planning to, how to better navigate the current regulatory environment, the planning of what's coming next into our overall planning processes, man, we'll certainly have a leg up there. Love that example. Um, speaking of things we love, I think you've got some thoughts around Cisco, which is one of the world's most admired companies. What sticks out there? And by the way, folks, Cisco in this case, were talking about Cisco, not the food behemoth, which is a big Fortune 500 company as well, which is Sysco.

Scott W. Luton [00:29:41]:

Were talking about Cisco. Laura, your thoughts?

Laura Rainier [00:29:44]:

Yeah, I think Cisco is a great example of how do we design out future resource constraints, right? So we touched on that in the case just a minute ago. But what Cisco has done is theyve really focused on, first of all, within their supply chain organization, they've built a function that is focused on engaging with design functions, with product design, with engineering, in order to really assess and kind of have those proactive conversations that we described. And so for every product that they design, they're applying a set of filters first. They're applying a product design or giving feedback on product design. Right. And they apply the circular design evaluation tool. So they'll look at things like, is this modular? Does it use more recycled plastic? Right. And then they'll also look at supply chain design.

Laura Rainier [00:30:36]:

Right. So as you know, they're developing new products. They'll look at the sourcing and risk management approach, and they have a comprehensive set of criteria. So looking at things like country of origin for input materials, they've designed in this collaboration between design and supply chain. And in doing so, they're taking this really proactive approach as they develop any new product to ensure that they're not kind of subject to these constraints.

Scott W. Luton [00:31:01]:

Well, I love it. And there's a reason why study after study, every year, Cisco gathers more accolades. Now, I know they're a big company, but hats off to our friend Jack Allen and the whole organization over Cisco for continuing to charge industry forward. One last example I think we're going to be talking about, Laura, is Kimberly Clark. What do you admire over there?

Laura Rainier [00:31:25]:

Yeah, I think what's interesting about Kimberly Clark is the way that they've motivated the organization. Now, we all struggled, or many of us certainly those of us with operations in the EU struggled with energy as a key constraint. And so Kimberly Clark ran into this back in 2022. And at the time, they found, given the high cost of energy, that that was actually the largest contributor to cost in their products. So energy was a real urgent constraint that they needed to address. And they also found and position. Right. This lack of energy availability, that is, you know, was a challenge in 2022.

Laura Rainier [00:31:59]:

And I think we at Gartner anticipate to be a challenge going forward. In a lot of countries, they say, you know, this is a risk to growth. We need to get a more sustainable energy solution. And so they used that sort of current constraint focus to then design an approach that used, that really reduced their exposure to fossil fuels. They focused on a whole lot of investment in renewable energy, investing in a range of solutions around heating, like on site biogas, and investment in green hydrogen. So looking at how do we then get ourselves or find ourselves a more sustainable approach to this energy constraint that they saw very clearly in 2022, but anticipate to become or to continue to be a challenge in the future. Yeah.

Scott W. Luton [00:32:43]:

Laurie, what you said a minute ago, more and more countries are going to be facing these energy constraints that you kind of pointed out that Kimberly Clark was embracing here in the states. We're located in Georgia, where we just had plant Vogel opened up a third and fourth nuclear reactor that they were working on for a long time. I'm not getting to the budget and overall timeframes, that's a separate show. But a lot of studies, especially as they're looking at regional or even state by state or even local electrical power demand, there's some scary statistics out there of the next five, six, seven years, and the investments in infrastructure we're going to need to meet. So not only can consumers find enough juice to recharge your phones, computers, or EV's or what have you, but we all know manufacturing plants and other industrial sites require a ton. Data centers require a ton of electricity. So we've got some big decisions to make, I think, here globally, but certainly here in the states, we're not immune to that as well. Give you the final thought there before we move to some key takeaways.

Scott W. Luton [00:33:45]:

Laura? Laura.

Laura Rainier [00:33:46]:

Yeah. Just, it's a great point, and it is one that actually, we've got a prediction around, right. We expect that 50% of countries, of G 20 countries will experience energy rationing in the next year. I mean, year and a half at this point, we said by 2026. Right. And so I think your point on data centers, right. Very hungry for energy. So that big increase in demand, but also challenges with supply as well, is an issue.

Laura Rainier [00:34:09]:

And so it's certainly a constraint that we expect to be important going forward.

Scott W. Luton [00:34:13]:

Yes, Laura, that's a great point. And, you know, there's usually always some good news when we go looking for it. And these, these numbers and data, as Lars points out, is opening some great opportunities for different parts. Solar energy. I cannot remember the statistic, Laura, but I believe solar will provide the plurality of new electrical supply, at least in the states, in 2024. That's great. I think we might have some challenges there when, when it comes to sourcing solar components, but we'll get to all of that. But we got to find new renewable ways to close the gap on, uh, what Laura's sharing.

Scott W. Luton [00:34:53]:

And, you know, if you're like Jenny Froome and our. Lots of our friends in South Africa, when it comes to energy rationing, gosh, we interview a lot of folks from, uh, Jenny and our, uh, all of our friends there, and, you know, we'll be in the middle of interview, Laura, and they'll be switching over to their generators. And how can we do better? We got to find a better way to provide not just energy, but even better, bridge the digital divide. We got a lot, a lot of work and heavy lifting in front of us, despite the gains we've made as a global industry, for sure. All right, Laura, I wish we had a couple more hours. I love research like this that's based on folks that are doing it right, folks that are facing these challenges and finding new ways of leading their organizations and their teams forward. So, as part of this conclusion, right. As I was reading the report earlier, I love.

Scott W. Luton [00:35:47]:

There's a lot here that I'd love to call out, but one in particular, I think it's important. You and your team mentioned that when chief supply chain officers really dive into and address the root causes of resource constraints, right, when they open their eyes and see that pickleball everywhere. Talked about earlier that one of the most powerful outcomes beyond bottom line, financial success, which is important, of course, but it's that far greater ability to drive robust gains to better meet the sustainability imperative. So the ecosystem wins the triple bottom line wins, certainly your customers, your suppliers. And we do better for the earth, quite frankly. So that sustainability action outcomes that pays dividends on so many levels. So whether it's that one or a few other key takeaways, what should our audience glean from this research here?

Laura Rainier [00:36:40]:

Yeah, I think I'll pick up on that. I think the first key takeaway I would recommend or suggest is a focus on framing some of these challenges as resource constraints in the first place. Right. Because we've given kind of a step by step process for overcoming some of the challenges in managing those resource constraints. But it's helpful to just kind of take a step back and say, yeah, pickleball is everywhere. Right. Or resource constraints are everywhere. And so how do we actually recognize that this is an issue for our supply chain and then determine how we can strategically address it? So almost like that, admitting there's a challenge here, I think the other key that I would suggest is really the one that you touched on.

Laura Rainier [00:37:19]:

Right. Which we really point to as sustainability strategies. Right. Environmental strategies in particular, are actually not a separate thing that you should be doing alongside your supply chain work, but instead, they're actually the solution to some of your biggest supply chain challenges when it comes to resource constraints. And so some of these circular design challenges, as we saw in the k electric example, provide the solution, right. They enable us to use resources more efficiently and effectively, and in doing so, they sort of can help us to mitigate, or rather to ensure our financial sustainability. Right. So this connection between business viability and environmental sustainability is actually really intimate.

Laura Rainier [00:38:06]:

And I think if we can kind of appreciate that as supply chain leaders, we can take a really concerted approach to addressing these issues that will help us achieve business goals and environmental goals.

Scott W. Luton [00:38:16]:

Trey, love that. Two things come to mind as I was listening to your key takeaways there, that first, hey, we're coming full circle. You're kind of talking about the power of admitting there is a problem.

Laura Rainier [00:38:28]:

Yeah.

Scott W. Luton [00:38:29]:

You know, we were talking earlier about not having all the answers to the questions as a professor, Laura, that's so important. And then secondly, you know, digital twin is a phrase that we've heard and many companies have act on for years. But as I was hearing you say, you know, some folks are doing their sustainability planning and execution alongside the business. We can't afford to have sustainability twins. Right. We've got to make it into the business. So it's truly. It's more successful on a variety of different measures, including financial success, because there's great financial success to be had when it comes to making really big gains on ESG and sustainability progress.

Scott W. Luton [00:39:09]:

Right?

Laura Rainier [00:39:10]:

Definitely.

Scott W. Luton [00:39:11]:

Okay. Wonderful. All right, folks, we are scraping just the tip of the iceberg here today with Laura. So if you want to learn more, Laura, folks want to learn more that they want to connect with you if they want to. I know that you are sharing a blog article which touches on a lot of stuff for the public or y'all's popular podcast over at Gartner. How can folks connect in and engage with the team across those things? More?

Laura Rainier [00:39:37]:

Definitely so, you know, Gartner clients, of course, would love to speak further with you all. And so please, you know, reach out and we can do an inquiry, but I think those that are, or they can access the full report. But we do have some really good publicly available resources are beyond supply, as you mentioned, touches on Pickleball, but mostly focuses on the concepts that we discussed today. We also, yes, we recently released a podcast, our Gartner Supply Chain podcast. And please find me on LinkedIn. I think that's the other place that I'd be happy to connect with you and really focusing on posting more there. So looking forward to engaging with all of you going forward.

Scott W. Luton [00:40:16]:

There's never enough time of the day, is there, Laura? Never enough time in the day. And we didn't even get to your soccer star status with the black Mambas, which is your team name, right? We'll have to tackle that in an upcoming episode along with the really great work that you and Simon Bailey are doing with the Gartner supply chain. Top 25 more to come in the months ahead there. But hey, what an excellent episode. Really enjoyed your perspective and expertise and your research here. Thanks for joining us. Laura Raniere, senior director analyst with Gartner. Thanks for being here, Laura.

Laura Rainier [00:40:53]:

Thank you, Scott. So nice to talk with you.

Scott W. Luton [00:40:55]:

You bet I enjoyed it, folks. Hopefully you enjoyed it. Whether you're tuned in, listening or you're viewing YouTube is easy place to view episodes. Now we're getting more and more comments, so y'all check that out. But most importantly, Laura really laid out some, I think, some compelling research. Y'all check out the blog and the podcast or the report and connect with Laura herself. But most importantly, take one thing that she shared here today, one thing that other supply chain leaders are finding a lot of success with, and put it into action. These not words.

Scott W. Luton [00:41:26]:

Your teams are ready to do business differently. And you know what? They're more capable of handling change than what you may think. So. But with all of that said, big thanks to all of you out there for tuning in. Thanks for all the feedback we get on behalf of the entire supply chain. Now, team Scott Luton, challenging you do good. Give forward and be the change that's needed. And we'll see you next time right back here at Supply Chain Now.

Scott W. Luton [00:41:49]:

Thanks, everybody.

Narrator [00:41:52]:

Thanks for being a part of our Supply Chain Now community. Check out all of our programming at SupplyChainNow.com and make sure you subscribe to Supply Chain Now anywhere you listen to podcasts and follow us on Facebook, LinkedIn, Twitter and Instagram. See you next time. Time on Supply Chain Now.